One family company has held the monopoly on poker machine licences in Australia's poorest state for 25 years. This is how it happened.
Wrest Point in Hobart, credited as being Australia's oldest casino, is owned by the Federal Group.
Within six months Farrell was able to put those concerns to one side. Federals had by then been given the licence to run all gaming machines in pubs, clubs and casinos in Tasmania for free, without any tendering process. In the end Farrell and his four siblings would make hundreds of millions of dollars out of the licence.
In return for the licence, Federals agreed to undertake up to $25 million in investment in new developments. Treasury secretary Don Challen later admitted that the agreement was so lacking in clarity that Federals could have "spent nothing and fully complied". Much of the family's wealth has been generated from some of the poorest parts of Tasmania. Anglicare has calculated that the working class community of Glenorchy, north of Hobart, has the highest level of poker machines losses in the state.
The pub with the highest poker machine losses in the state is the Federals-owned Elwick Hotel in Glenorchy. Its poker machine room is open from 8:00am until 4:00am. Bacon and his deputy Paul Lennon had been regular visitors to Wrest Point casino over the years. The premier had met his second wife Honey when she worked as a croupier there, Lennon was the Minister for Gaming for four years and later became a lobbyist for Federals after leaving politics. When Federals told the government their bankers wanted more long-term certainty on the licence, Labor was happy to oblige.
As part of the deal, there was a cap placed on machines and Federals agreed to invest at least $25 million in a resort it had already announced it would build near Coles Bay. The poker machine licence was meant to be for 15 years, but in reality it was for even longer. A rolling clause in the Act allowed for an extension to 20 years. The licence would be in the hands of Federals until 2023.
Walsh hoped that a boutique casino, which had the proposed motto "no pokies, and no porkies", could help subsidise the growth of MONA. The then-treasurer Peter Gutwein suggested he meet with Greg Farrell and ask if the Federals boss would give up his exclusive deal to run casinos in Tasmania under certain conditions. Farrell and Walsh ended up speaking over the phone.
Federal Group founder Greg Farrell and Will Hodgman were seated together at a corporate function at MONA in 2015. "The processes that led to the development of the earlier Deeds caused concern in the community and cast a shadow over the appropriateness of structural arrangements. The government does not want a repeat of this outcome," he said.
As the committee gathered for its final day of hearings at Parliament House in Hobart, a surprise submission landed in the committee's inbox. The Federal Group knew its days of being granted a monopoly were over, but it was pushing back against the Hodgman government's plan for a tender process. It knew that if the licence was put out to market for the first time, it could lose in one of two ways. If it won the bid, the licence could cost hundreds of millions of dollars. If it lost, the rivers of gold would start flowing somewhere else.
The following month the Hodgman government had its own shock in store. It announced it would adopt a poker machine policy that was virtually a carbon copy of the Federals/THA proposal, with a small fee per machine added, well below market price. Losing Streak author James Boyce has estimated that thanks to Tasmania's weak electoral laws less than 20 per cent of the $4 million-plus donated to the Liberal Party in that election year was disclosed. He says 80 per cent of the donations that were traceable came from the gambling industry.
Eventually 34 documents were identified, but the Department of Treasury refused to release any of the documents. Twenty months after the first request went in, ABC Investigations is still waiting for the Office of the Ombudsman to finalise its appeal.Peter Gutwein speaks to media during the election campaign, April 2021.
When asked about it at a press conference last month, Gutwein said it was legitimate to withhold the information from the electorate because it hadn't been passed by cabinet. "If the proposed arrangements were applied to gaming activity that took place in the 2018-19 financial year, Federal Group would have been $20 million worse off in that year. This is after taking into consideration any of the increases Federal Group pubs would receive in the proposed model."
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
How a company controlled by one of Singapore's richest families legally pocketed JobKeeperA private company controlled by one of Singapore's richest families — construction machinery and equipment supplier Tutt Bryant — legally pocketed $5.4 million of JobKeeper while it increased its revenue and profits.
Read more »
Qld gov backflips on sick babyQueensland health officials have backflipped and granted an exemption to the family of a sick baby to allow them to quarantine together when they return from NSW.
Read more »
Ruthless Melbourne obliterate Geelong, reach first grand final since 2000A relentless Max Gawn-led Melbourne have stormed into their first grand final in two decades after obliterating a bewildered Geelong. agerealfooty sam_mcclure
Read more »
Cricket Australia demands Taliban let women play sportAustralia’s cricket body has threatened to cancel the historic first test match between Australia and Afghanistan in Hobart later in the year if the Taliban does not allow women to play sport.
Read more »
Tasmania to make masks mandatory at events of 1,000 people or moreMasks will be mandatory in Tasmania at large events both indoors and outdoors from next Saturday, Premier Peter Gutwein says.
Read more »