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Woolworths: The Fast Cash People?

Written by:
Greg Tingle
Published on:
Nov/20/2010
Woolworths

Gambling and especially potential harm re "problem gambling" continues to get a strong news run in Australia. Today we explore the business relationship that retailer Woolworths (slogan - 'The Fast Food People') aka 'The Fast Cash People' (satire) enjoys in the Australian gaming and gambling industry. Media Man http://www.mediamanint.com and Gambling911 take a ride on the shopping trolley jackpot with this special report...

Woolworths on Thursday found itself defending its significant business involvement in Australian pokies, as the echoes that they are causing social harm continues.

What's the one armed bandit link we hear you ask.  Woolworths, via its majority holding in the ALH Group venture with Melbourne businessman and Aussie pokies king Bruce Mathieson, is Australia's largest poker machine operator and is likely to face more negative press and noise over "problem gambling" due to the anti-pokies stance of some key federal Independent MPs and senators. It's mainly a small but vocal minority, but it gives they a platform to get noticed.

A Media Man insider said 'For some MP's the pokies thing is gold. Some of them see pokies as the new thing to jump upon. Rather like pokies is the new porn to jump up an down about. For the past few years in Australia porn and also the environment were big issues for polies, then mining, not pokies gets a lot of heat. Next year it will be something else".

Woolies Chief executive Michael Luscombe, speaking after the company's annual shareholder meeting in Brisbane said it had no plans at all to exit the poker machines business.

Luscombe advised the firm was planning to introduce a policy to help reduce problem gambling, but he could not or would not immediately name the specific nature.

A communications assistant type then went on to describe the voluntary precommitment policy, under which punters can choose to set limits for wager amounts.

Stephen Maybe, political and media commentator, and anti pokies activist quizzed if Woolworths had decided to pursue court action to prevent councils from such a move or had agreed to a deal with the Victorian Labor Party to use legislation to prevent council action if the Brumby Government was re-elected. Luscombe said he was not aware of any agreement with Labor.

Mayne also said nationwide more than $10 billion was lost on pokies each year. He said Manningham council was investigating the possibility of increasing the rate bill of Woolworths' gaming venues from $100,000 to $400,000.

Woolworths' hotels business enjoyed about $176.7 million in fiscal 2010 pretax earnings and added 6 properties, taking its total number of hotels and clubs to 284.

Woolworths issued a special report on its social, environmental and governance policies, however the report's one-page summary of key 2010 challenges did not mention action to address "problem gambling".

The company noted it adhered to gambling-related laws and planned voluntary measures.

Woolworths also came under fire over its approach to executive pay, with the Australian Shareholders Association citing concern over lack of transparency as the reason for rejecting the remuneration report.

The outfit had good news on its latest trading, with Luscombe stating there had been no direct impact on its business from the latest official rate rise. He expected Christmas trading this year would be "reasonably good".

The company continued to expect 8-11% growth in fiscal 2011 net profit.

He said the company was likely to open more than the 150 home-improvement stores targeted. It has secured 90 sites and planned to open the first stores in Victoria from about July..

Chairman James Strong said the company was keeping its eye out for takeover opportunities.

"The board remains open and alert to a wide range of possibilities that could add value for our shareholders," he said.

Woolies shares rose 24 cents to $27.74 yesterday.

By all accounts Woolworths is making a killing with its current links to the Australian pokies business, and shows no sign of slowing down.

Christmas jackpots are on the way, as the pokies lovers vs pokies haters war down under continues.

Wrap Up...

Readers... er, punters, how did you like our report? What do you think about Woolworths being involved in gambling? Tell us in the forum. 

If you have a bet, please bet with your head, not over it, and for God's sake, have fun.

*Greg Tingle is a special contributor for Gambling911

*Media Man http://www.mediamanint.com is primarily a media, publicity and internet portal development company. They cover a dozen industry sectors including gaming and offer political commentary and analysis.

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