s gambling reform becomes a key battleground in the NSW election, it is clear how powerful the clubs lobby has become in a country with more poker machines than anywhere else in the world. By Mike Seccombe.
Perrottet, the pokies lobby and the Nazi uniform
There are at least four questions about Dominic Perrottet’s Nazi costume, only one of which as yet has an answer. They are: Where is the photo? Does it even exist? If it does, is someone holding it back hoping to inflict more damage on the New South Wales premier by releasing it closer to the March 25 election? And why, almost 20 years after the 21st birthday party at which Perrottet wore the uniform, have we only recently heard about it?
We know about the uniform because he confessed at a press conference to wearing it and has since made a succession of grovelling apologies, particularly to Jewish groups, for the “terrible, terrible mistake” of his youth.
Although he said he did not know if any picture existed, he clearly was not prepared to bet against the rumours that there was one. So, after holding his guilty secret for all those years, prompted by the fear of exposure, he finally owned up.
But the other questions linger, along with another, bigger one: Whose interests are served by the rumours, the confession, the diminishment of the premier?
In most circumstances when a bucket is dropped on a prominent figure on one side of politics, it is dropped by the other side. But in more than a week since Perrottet’s self-outing, the informed speculation in political circles suggests it was not the case this time. Indeed, Labor has shown considerable restraint in the matter. Opposition Leader Chris Minns, after two days’ silence, said he thought Perrottet’s apology was sincere, adding “and I don’t think it will affect the election”.
The only prominent Labor figure to go in really hard on Perrottet was former NSW premier Bob Carr, who fired off a couple of tweets last Thursday, insisting that he only discussed it with Minns afterwards. “Verdict: he is now unelectable.”
Listen to 7am The source of the Nazi uniform story is thought to be one of Perrottet’s own party or someone connected to the state’s powerful poker machine lobby, which has been angered by the premier’s plan to introduce mandatory cashless gaming cards in pubs and clubs. Or both.
The rumour mill has been fuelled by circumstantial evidence. It was one of Perrottet’s frontbench, David Elliott, who told him on Tuesday last week that “someone” was planning to use the alleged photo against him.
This is curious, for relations between the two are not good.
Elliott is leaving politics at the election, having lost a preselection battle involving Perrottet’s faction.
Only a matter of days before he spoke to the premier about the alleged picture, it was revealed he had been forced to exclude himself from cabinet discussions on gaming reform due to potential conflicts of interest.
Reportedly – and The Saturday Paper has not confirmed this, because he is now on compassionate leave following the death of his mother – Elliott believed Perrottet had told the media that Elliott’s son worked for the global poker machine manufacturer Aristocrat Leisure.
“If you’re in a bikie gang, you’re obviously not going to use the machine which only takes a card, you’re going to pick a venue that’s not participating in this trial. And you’re going to pick a machine that’s not participating in the trial.” Only a couple of weeks before that, Elliott, a former deputy chief executive of the NSW branch of the Australian Hotels Association and a director of Castle Hill RSL Club, attacked Perrottet’s planned reforms, saying they risked “demonising one sort of gambling”.
He claimed that cashless gaming would cost jobs, would not help problem gamblers and would simply see people move to other forms of gambling.
So it seems passing strange that the outgoing minister, having been pointedly unhelpful to the premier’s bold, signature election policy, should helpfully phone to warn him.
Perrottet has said there was nothing threatening about the phone call, but the result was obviously very damaging in that it served to distract from the political debate about poker machine reform, in which the Labor opposition had to that point been struggling.
This week Labor released its own policy on pokies reform, widely viewed by gambling experts as inadequate in that it proposes only a limited trial of cashless gaming.
The issue is significant. NSW is the most pokie-addicted jurisdiction in the most pokie-addicted nation on Earth.
Australia has only about one-third of 1 per cent of the world’s population, yet it has 21 per cent of the world’s “high intensity” electronic gaming machines or EGMs. Of the roughly 200,000 EGMs in the country, some 86,000 are in NSW.
“They are the main reason that Australia has the greatest gambling losses per head of any country – 40 per cent higher than the nation that comes second, Singapore,” says Tim Costello, spokesman for the Alliance for Gambling Reform, citing two studies by the federal Productivity Commission.
In most of the world, he says, EGMs are limited to casinos. “Here, they’re accessible on every second street corner.”
The machines suck phenomenal amounts of money out of the less than 20 per cent of people who play them – disproportionately from problem gamblers, who are in turn disproportionately young, male, less-educated, unemployed or on low incomes, lonely and troubled.
In the six months to May 1, 2022, registered clubs turned a profit of $2.217 billion from more than 64,000 pokies in NSW, according to Liquor & Gaming NSW. Pubs profited to the tune of $1.632 billion, from almost 22,500 machines.
And pubs and clubs paid a little over a billion dollars in taxes.
In NSW alone, EGM turnover in hotels and clubs was about $95 billion in 2020-21, much of it dirty money, according to a report from the state’s crime commission released last October.
“The lack of traceable data collected by EGMs means the exact scale of this criminal activity is impossible to determine,” said Crime Commissioner Michael Barnes, “but it is clear from our investigations it involves many billions of dollars every year.”
Barnes said poker machines offered criminals one of the last remaining safe havens where cash from criminal enterprises could be “cleaned”. The report called for the introduction of a mandatory cashless gaming card and enhanced data collection measures.
“These basic reforms will help exclude vast sums of dirty cash that are primarily the proceeds of drug dealing,” Barnes said. “I’m sure venues won’t argue they should keep receiving that.”
Of course, that is not what venues are arguing. They and their advocates instead claim that Perrottet’s promised reforms will cost jobs and impinge on personal freedom. They also seek to cast doubt on the other likely benefit of cashless gaming, which is that it will help address problem gambling.
Consider one of Elliott’s recent arguments. “We can’t say to Nanna, ‘You can’t put $20 into the pokie machine after bowls,’ ” he said, “because she’s just going to put that $20 on scratchies and lottery tickets in the newsagent on her way home.”
It is a dishonest argument in a couple of ways. First, the proposed reforms would not stop Nanna from having a modest flutter on the pokies. It would only ensure she did not use cash.
Second, his suggestion that stricter controls on pokies would simply lead people to other forms of gambling does not hold up.
It does not follow, says Professor Sally Gainsbury, an expert in gambling psychology and director of the gambling treatment and research clinic at the University of Sydney, “that if one form of gambling is restricted or changing one way, the customers will automatically swap to another”.
“We saw from the Covid-19 pandemic shutdown of gambling venues that when this particular form of gambling wasn’t available, there was not a huge migration,” she says. “So there weren’t more people buying scratchie tickets or lottery tickets online.”