The Gallop Government in Western Australia has left the door open for poker machines to be introduced in the State at Burswood Ltd’s Perth casino, in a move which could reward Mr Kerry Packer’s timely investment in Burswood.
Despite strong lobbying from hotel and licensed club representatives in Western Australia, the Racing and Gaming Minister Mr Nick Griffiths confirmed last week there was no prospect that Labor would alter its policy and legalise poker machines in pubs and clubs – a decision which could cost the Government an estimated $200 million in forgone tax revenue.
However, Mr Griffiths later confirmed to The Australian Financial Review that there remained a chance the Statewide ban on traditional poker machines could be lifted to accommodate the Burswood casino.
“The Government’s policy is that there will be no electronic gaming machines into pubs and clubs,” Mr Griffiths said. “Burswood is a casino and different from pubs and clubs. The Government wants to make sure the casino operates properly in a very competitive market.”
Despite some media reports, Burswood does not already have traditional poker machines and, like the pubs and clubs, has been lobbying successive governments for changes to WA’s anti-pokies legislation.
Poker machines differ from the existing electronic games operated by Burswood in that they operate on pure chance, allowing no input – or “skill” – from the gambler.
The contentious issue of poker machines is high on the agenda for discussions scheduled to take place on July 26 between Mr Griffiths and the managing director of Burswood, Mr John Schaap. Those discussions are deemed critical to Burswood’s medium-term earnings outlook.
The importance of poker machines to Burswood is highlighted in research conducted by CIBC World Markets analyst Mr Robert Gee, who estimates their introduction to the Perth casino would bolster Burswood’s annual revenue by more than $33 million. Mr Gee said that would equate to a post-tax profit boost of $16.7 million – more than half Burswood’s 2000-2001 profit forecast.
Those extra poker machine profits would create a bigger tax take for a State Government under intense pressure to deliver on a pre-election promise of a Budget surplus.
Apart from Semua Situs Slot Mpo poker machines, Mr Schaap will also push Burswood’s case for lower tax rates for its international commission (high-roller) business when he meets Mr Griffiths, along with an extension to the casino’s exclusive gaming licence, a lifting of its 10 per cent shareholder cap and approval for online gambling initiatives.
Mr Packer stands to benefit from any concessions Mr Schaap negotiates after recently building a stake in Burswood, albeit below the 5 per cent disclosure threshold.
Mr Griffiths said his talks with Burswood would proceed on the basis that the Government was not interested “in any decisions that increase problem gambling and social misery”.
With the Burswood complex undergoing a major redevelopment which would create broader tourism benefits for the State, Mr Schaap said he believed the company was getting the message across to the Government that “we’re not just sitting here on our hands running a casino without putting anything back into the community”.
Mr Schaap said he did not expect that a decision allowing Burswood to have poker machines would outrage those opposing the social effects of gambling.