Federal Group: State government didn’t give enough notice for end to gaming monopoly
Federal Group wants the state government to extend its monopoly on the gaming industry, saying it didn’t give enough notice before announcing an end to the arrangement. LATEST >>
Tasmania
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Gaming giant Federal Group says the state government did not give it sufficient notice before announcing it would end the company’s monopoly on the industry – and it’s calling for the current arrangement to be extended for a further three years.
The Gutwein government intends to introduce legislation to parliament later this year that would bring an end to the monopoly on July 1, 2023, transferring control of poker machines to pubs and clubs, with individual licences to be issued to venues.
The government has said Federal Group would be close to $25 million worse off under the new arrangement, which includes a 3 per cent increase to the Community Support Levy, reaping the state an additional $3 million, while pokies in pubs will be taxed an additional 8.3 per cent, and those in clubs an extra 7.3 per cent.
The tax on casino pokies, however, would fall by nearly 12 per cent.
Federal Group executive general manager corporate and regulatory affairs Daniel Hanna said that according to the 2003 monopoly deed, the company’s exclusive licence was now in a Rolling Term, meaning that the earliest date new gaming arrangements could begin without creating a sovereign risk event was July 1, 2026.
“(The 2003 deed) gives Federal Group the certainty of future operations it needs to continue to invest in its properties and equipment (including electronic gaming machines) and software (including EGM games),” Dr Hanna wrote in the company’s submission to the consultation process for the bill.
“This required certainty is not only for the period of the licence, but also for the conditions attached to the licence – both of which are fundamental to the viability of Federal Group’s gaming operations.”
Citing legal advice, Dr Hanna said Federal Group had not received the required notice, adding that “no Tasmanian government has previously behaved in this way”.
“Sophisticated, advanced governments resist this temptation because to legislatively override contracts, willingly entered, completely erodes the confidence of other parties to contract with government and creates damaging precedents which go far beyond the circumstances of the contract overridden,” he wrote.
Federal Group has also implored the government to scrap a proposed amendment which it says would remove the capacity for “a party to the 2003 Deed” to be paid compensation for “any loss or damage suffered”
A government spokesperson said Federal Group had been “a good corporate citizen and managed their responsibilities well”, but its monopoly would end in 2023.
“(The legislation) implements the government’s policy which was clear that the new arrangements would start in 2023 and Federal Group supported this policy at the 2018 election,” the spokesperson said.
Greens leader Cassy O’Connor said the company’s “shameless greed” was “breathtaking”.
“It’s a bit rich, but completely unsurprising, for the Farrell family to cry poor,” she said.
“They’ve known this date was coming for twenty years.”
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