Perrottet’s poker machine revolution passes snap meeting of cabinet

All poker machines in NSW will be cashless within five years after Premier Dominic Perrottet’s long-promised gambling reforms passed a snap meeting of cabinet.

After months of contentious public debate, and tension within the Coalition, the most significant overhaul to gambling since poker machines were legalised in the state in 1956 will include a range of financial support measures for clubs and pubs to introduce the new technology, as well as a specific regional transition fund.

NSW Premier Dominic Perrottet, pictured in 2021, has secured cabinet support for his gambling reforms. Credit: Dominic Lorrimer

There will also be no-interest loans for small and medium venues to buy new machines with cashless technology and one-off $50,000 grants to pubs and clubs to help fund new income streams such as live music and food to reduce their reliance on gambling revenue.

The proposal was presented to a specially convened cabinet meeting on Sunday night after Perrottet promised to release a detailed plan ahead of next month’s state election.

An independent implementation team would be appointed in April to devise a technology road map to remove cash from all machines in a five-year window between the start of 2024 and the end of 2028.

The team would be headed by Department of NSW Premier and Cabinet secretary Michael Coutts-Trotter and will include Treasury officials, the NSW Privacy Commissioner, harm minimisation experts, pubs and clubs representatives and NSW Police.

Perrottet would present legislation for the 2028 deadline in the first sitting of parliament should he win the March 25 state election.

Punters will have self-imposed spending limits, which can be altered only once a week, but the implementation team will consider further daily limits. No personal data will be collected or retained by the government or pubs and clubs.

A key sticking point for the Nationals in the debate over a cashless gaming card was the viability of small regional pubs and clubs, but a regulation will be written into the legislation to give a struggling venue an extension on the condition an independent expert, the implementation team and the responsible cabinet minister agree it cannot meet the deadline.

The government will also buy back 2000 poker machines from clubs over the five-year implementation period, according to senior government sources aware of the cabinet meeting but unable to speak publicly.

Perrottet is expected to reveal the details of his long-touted reforms on Monday, and will say his proposal is more ambitious than Labor’s and can achieve significant change much earlier. His office did not respond to requests for comment on Sunday evening.

The premier’s decision to pursue a cashless gaming card comes after a damning report from the powerful NSW Crime Commission found billions of dollars of dirty money was cycling through poker machines each year. The commission’s report recommended a cashless gaming card.

Perrottet’s position has been backed by Unions NSW secretary Mark Morey, Police Commissioner Karen Webb, former prime minister John Howard, former federal Nationals leader John Anderson, the NSW branches of the Health Services Union and the United Workers Union, churches and leading charities.

After being reluctant to back a cashless gaming card, Opposition Leader Chris Minns last month announced a Labor government would introduce a mandatory trial for at least 500 poker machines if it won the March election – a policy key crossbench MPs and gambling reform advocates described as too weak.

The 500 pokies included in the trial would represent less than 1 per cent of the state’s 90,000 machines.

The Labor policy would also ban political donations from clubs that house poker machines, reduce the cash feed-in limits in new machines from $5000 to $500 and ban pokie advertising outside all venues.

Labor would also reduce the number of poker machines by increasing the forfeit rate clubs and pubs must adhere to, and by subsequently lowering the overall statewide cap each year for the number of pokies.

Under the current system, pubs and clubs wishing to add extra poker machines can trade with other venues, but they must agree to forfeit one machine for every three additional ones.

Chris Minns says Labor would introduce a mandatory trial for at least 500 poker machines if it won the March election.Credit: James Alcock

The Labor plan would increase the forfeit rate to one poker machine for every two purchased, while the Coalition’s plan would allow it to buy back 2000 poker machines.

Sources with knowledge of the Coalition’s proposal said the buyback plan would reduce the overall number of machines more quickly than Labor’s scheme.

The Coalition’s poker machine package represents a fundamental shift for the industry, but details such as the timeframe and support measures for regional areas could prompt criticism from gambling reform advocates that it does not go far enough, fast enough.

One of the fiercest critics of mandatory cashless gaming, the powerful lobby group ClubsNSW, is scrambling to revamp its campaign against the reform following the sacking last week of its chief executive Josh Landis. The six-person board fired Landis after he told the Herald Perrottet was acting out of his “conservative Catholic gut” rather than through evidence.

As ClubsNSW regroups, several industry sources have told the Herald that the NSW Australian Hotels Association is prepared to call on its substantial cash reserves to fund third-party election campaigning to thwart the Coalition’s poker machine proposals.

The AHA did not respond to questions but $10 million has been widely discussed within the industry and political circles as the amount the pubs lobby could spend.

ClubsNSW has begun a targeted campaign against independent Murray MP Helen Dalton, one of several independents who back a cashless gaming card. Life-size posters of Dalton have been erected in clubs in her electorate.

New data published by the Herald last week found gamblers lost more than $2.1 billion on poker machines in fewer than 100 days last year – the highest losses in NSW history.

Profits for pubs and clubs from poker machines hit $23 million a day, as punters’ losses rose 11 per cent last year, according to the figures compiled by Liquor and Gaming NSW.

Machines in pubs now account for 44 per cent of losses, despite housing only 26 per cent of the state’s poker machines.

Across the 86,568 poker machines in NSW clubs and pubs, the highest profits were generated by machines in western Sydney, Liquor and Gaming NSW figures show.

Gaming machines in Canterbury-Bankstown made $182 million in the third quarter of 2022, those in Fairfield made $174 million and those in Cumberland made $124 million.

Blacktown’s poker machines took in $100 million and machines in the City of Sydney local government area made a profit of $96 million. In Penrith, machines captured profits of $64 million.

Machines in regional NSW also claimed multimillion-dollar profits, including $85 million at pokies on the Central Coast, $53 million in Wollongong and $51 million in Newcastle between July and September.

An analysis of the figures by Wesley Mission found the average poker machine in NSW now claims almost $100,000 a year in losses. It is estimated between 900,000 and 1.7 million people in NSW are harmed by problem gambling.

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