Victorian councils demand cut of AFL pokies cash

[Kwality]

Clubs income from poker machines is under question, rorting the system is the allegation:
Leading AFL clubs have come under attack from Victorian councils for allegedly exploiting loopholes in state gambling laws to claw back millions of pokies dollars earmarked for community support programs and charities.

Carlton Football Club is at the centre of the storm after the Hobsons Bay City Council in Melbourne’s western suburbs stepped up its campaign to force AFL clubs to hand over a share of their pokies takings to local communities.
Carlton operates two pokies venues in the Hobsons Bay municipality – The Vic Inn and Club Laverton – that harvested combined gaming revenue of $8.3 million in 2015.

The club did not fund gambling support programs in the local area, electing instead to meet the community benefits test mostly by upgrading amenities such as spas, air conditioners, toilets and stands at its home ground, Ikon Park, located outside the municipality.

Carlton is ‘double dipping’ on pokies profits, according to a Victorian local mayor. Photo: AAP

Documents filed to the Victorian gambling regulator show that Carlton met the community benefits test by spending around $600,000 on capital upgrades to its ground and social club amenities and only $100,000 for “philanthropic and benevolent purposes”.

All Victorian sports clubs with pokies licences must show that at least 8.33 per cent of the net gaming machine revenue is used to deliver “community benefits”.

Collingwood raked in more than $10.6 million in gaming machine revenue from two venues in 2015 and was able to meet the community service test by having more than $1 million spent on electricity, wages and rent at its pokies establishments recognised as “community benefits”.
...Collingwood .. coming under pressure from Melton Shire councillors to stump up cash for gambling support programs in Melbourne’s outer western suburb of Caroline Springs where the club operates a lucrative pokies venue.

Hawthorn, which hauled in $11.1 million from its lucrative ‘Vegas’ gambling establishment in the outer Melbourne suburb of Mulgrave, also helped fulfil its obligation by having $751,000 of costs incurred at the venue as community benefits.

http://thenewdaily.com.au/sport/2016/06/06/vic-councils-demand-cut-afl-pokies-cash/

There has been ongoing agitation in this space lead by Monash Uni academics & IF the Councils have a win here most of that money will come straight off the bottom line - the morality of the issue is one for the hand ringing set, & the ABC are already into it (774 Melbourne).

 

[Garlic muncher]

Why doesn't the council just operate it's own poker machines ?.

 

[bombersfan4000]

Why doesn't the council just operate it's own poker machines ?.

Its called paying rates

 

[Ned_Flanders]

Why doesn't the council just operate it's own poker machines ?.

The issue is taxation

If you or I operate a pokies venue, we are taxed at a particular rate

However if you are a community organization, you get taxed at a reduced rate because people believed rsl's and the like give back to the community, so their operations should be given an advantage

The rort is 100% a rort, and its occurring from two angles

The first is per the article. Clubs claiming a new ice bath is a "community benefit" rather than a program or venue that actually provides something back yo the community

Clubs argue that being able to cheer on a successful membership based club is a community benefit, but that's a crock and we all know it

The second is the trick the likes of woolies and matheson have done

They should be taxed at the full rate. They however have leased out their pokies to footy clubs, who get a fee for their use. The key is the fee is less than the tax difference between the commercial and community org tax rate. So the club gets money for nothing, but the commercial owner of the machines gets to avoid paying some tax to the govt


This is easily fixed

1) community orgs must own their own machines outright, no leasing

2) the community benefit program must be spent in the local council where the pokies are based, AND it must be a genuine community benefit, not related to the pokies operation or the football organization

 

[Kwality]

The Victorian Commission for Gambling & Liquor Regulation should be upfront on this issue:
VCGLR inspectors are responsible for conducting inspections of licensed gambling and liquor venues throughout Victoria to ensure licensees and venue operators are aware of and comply with their legislative obligations. They also perform system audits of major licencees to ensure approved procedures and controls are in place. VCGLR inspectors are intended to work collaboratively with other VCGLR divisions and coregulators and stakeholders, including Victoria Police and local municipal authorities, in order to uphold the culture and integrity of harm minimisation in the gambling and liquor industries.
http://www.vcglr.vic.gov.au/utility/about+us/about+the+vcglr/annual+reports

Begs the question are Woolies et al & the footy clubs being treated in the same way under this application of the Regulations?

 

[Ned_Flanders]

The Victorian Commission for Gambling & Liquor Regulation should be upfront on this issue:
VCGLR inspectors are responsible for conducting inspections of licensed gambling and liquor venues throughout Victoria to ensure licensees and venue operators are aware of and comply with their legislative obligations. They also perform system audits of major licencees to ensure approved procedures and controls are in place. VCGLR inspectors are intended to work collaboratively with other VCGLR divisions and coregulators and stakeholders, including Victoria Police and local municipal authorities, in order to uphold the culture and integrity of harm minimisation in the gambling and liquor industries.
http://www.vcglr.vic.gov.au/utility/about+us/about+the+vcglr/annual+reports

Begs the question are Woolies et al & the footy clubs being treated in the same way under this application of the Regulations?

They would be, just a guess but I'd be surprised if the issue your flagging is covered by an audit.

Audits need to be impartial, and making calls on what is and isn't community benefit is highly subjective

Personally I suspect it would have been kicked up the food chain at some stage, but no one wants to touch it because declaring war on afl clubs in Melbourne is political suicide

 

[manicmagpie]

The misuse of the 'community benefit' loophole has been going on for years and is pretty ordinary behaviour.

IIRC Hawthorn once claimed the purchase of its own training footballs counted towards this.

 

[Ned_Flanders]

The misuse of the 'community benefit' loophole has been going on for years and is pretty ordinary behaviour.

IIRC Hawthorn once claimed the purchase of its own training footballs counted towards this.

I actually thought the clubs were told to reign it in back then, but I'm not surprised it hasn't changed

 

[Kwality]

They would be, just a guess but I'd be surprised if the issue your flagging is covered by an audit.

Audits need to be impartial, and making calls on what is and isn't community benefit is highly subjective

Personally I suspect it would have been kicked up the food chain at some stage, but no one wants to touch it because declaring war on afl clubs in Melbourne is political suicide

Not exactly impartial is our Commission chair:
http://www.heraldsun.com.au/sport/afl/more-news/afl-chief-gillon-mclachlan-meets-with-pokies-crusaders-tim-costello-and-nick-xenophon/news-story/5aaf814033928e92939d2553f3699226

As for an audit, a compliance audit would fit the bill IMHO but would /should uncover exactly what is happening, IF AFL clubs are being treated differently to any other pokies licence holder.

You hit the spot with political suicide Tiger

 

[Ned_Flanders]

Not exactly impartial is our Commission chair:
http://www.heraldsun.com.au/sport/afl/more-news/afl-chief-gillon-mclachlan-meets-with-pokies-crusaders-tim-costello-and-nick-xenophon/news-story/5aaf814033928e92939d2553f3699226

As for an audit, a compliance audit would fit the bill IMHO but would /should uncover exactly what is happening, IF AFL clubs being treated differently to any other pokies licence holder.

Just to clarify, because it's an important point

For any form of compliance audit, an auditor is given a guidance on how they are to interpret things, and what is acceptable and what is not. They are not to go beyond this, it's actually really strict in this trade, The issue is if you learn this criteria, you can learn to work around it.

For example, and this is just me making up s**t - not from the code, a perfectly acceptable use of funds for community benefit in most people's minds would be contributing to the local footy team.

When it was drafted, it could be as simple as no one considered the idea of afl clubs getting involved, so there was no line separating the seaford Tigers from the Richmond tigers.

Or it could be complexity. How do you separate afl clubs from local ones? You cannot say not for profit clubs only, because that includes all Melbourne based clubs. You can't say only non professional clubs, because most local clubs pay their players.

Problem is then once you identify the loophole, who have to have the political will to update the code to close it. Putting millions of afl club revenue at risk, that is a big call politically in melbourne

 

[Gigantor]

To add to that, it seem crazy that a club could satisfy the community obligations in relation to pokie revenue earned in one council by spending it in another council - that's doesn't just sound like a loophole - that just sounds like one council getting dudded, and I'd be very surprised if the letter of the law allowed it.

 

[telsor]

To add to that, it seem crazy that a club could satisfy the community obligations in relation to pokie revenue earned in one council by spending it in another council - that's doesn't just sound like a loophole - that just sounds like one council getting dudded, and I'd be very surprised if the letter of the law allowed it.

I'd be shocked if the letter of the law covered it in nearly that level of detail. This has been happening pretty much from when pokies were first brought in, so the lawyers doubtless looked at it, saw the massive loophole in the 'community benefit' area and drove a truck through it.

BTW. It's not just the AFL clubs...If memory serves, places like the RSL consider their 'community benefit' to be things like cheap meals and other 'features' (like kids playgrounds) that draw punters into their venues in order to push up their take.


Doubtless the result of this and other recent agitation will be a few feel good statements, a couple of cosmetic changes and nothing of substance.

 

[Ned_Flanders]

To add to that, it seem crazy that a club could satisfy the community obligations in relation to pokie revenue earned in one council by spending it in another council - that's doesn't just sound like a loophole - that just sounds like one council getting dudded, and I'd be very surprised if the letter of the law allowed it.

It's as per telsors post, this was brought in thinking it would be rsl's and social clubs being community orgs. They wrongly assumed they would be owned and operated locally

 

[Kwality]

Same as the transfer pricing practised by multi nationals thru Singapore telsor? Poorly drafted legislation.

 

[Aussie in exile]

Didn't the Fat Man say that when he ran the game that he wanted the clubs to reduce their dependency on pokies?

 

[telsor]

Same as the transfer pricing practised by multi nationals thru Singapore telsor? Poorly drafted legislation.

Nah, I'm cynical enough to think it was drafted for pretty much this effect.

When pokies were brought in, the pollies got the PR benefits from turning debate to focus on the community benefits for/from community groups and sporting clubs, while all the vested interests (especially the government) still got to ensure their slice.

 

[telsor]

Didn't the Fat Man say that when he ran the game that he wanted the clubs to reduce their dependency on pokies?

Yeah, empty words and feelgood statements....Did he actually DO anything to promote or move towards that?

 

[Aussie in exile]

Yeah, empty words and feelgood statements....Did he actually DO anything to promote or move towards that?

Yes on reflection just more empty words and another feelgood statement from Fat Andy who i can't remember doing anything to back up his words.
In his time running the game he did come out with words that he considered would show him in a favourable light.
Empty words on reflection.

 

[telsor]

Local councils don't have the power to stop pokies, but it seems Melbourne city council has come up with a sideways way of doing so.

http://www.heraldsun.com.au/news/vi...e/news-story/b88c049613eaf24d7860bd335833b705

Mind you, it wont remove any pokies from their area, so it seems a bit of a matter of looking good so long as it doesn't cost them any rates revenue.

Could also be an 'interesting' legal point as to if a body that can't (dis)approve of such things can do so in this way, especially in other council's areas.