Poker machines venues in Victoria spent $184m of gambling profits on themselves last financial year, justifying it as a “community benefit” to get a tax cut.
The same clubs only spent $23,000 of gambling losses on harm reduction measures – designed to protect those who funded their venue upgrades – beyond what was required by law.
The figures, contained in the state gaming regulator’s annual report, are the latest example of a legal tax minimisation scheme that has enraged some councils, public health experts, social service groups and anti-gambling advocates.
In Victoria, clubs that reinvest 8.33% of gambling revenue into community initiatives are eligible for a tax cut. But the scheme allows them to claim renovations and operating costs – which keep gambling venues open – along with Foxtel subscriptions.
The Hume city council has argued the scheme has “egregious loopholes” and criticised the state government for not overhauling it despite being urged to. The council’s mayor, Joseph Haweil, has alleged it was being “rorted” by some clubs.
The latest figures show clubs spent only $13m of gambling revenue on donations, gifts and sponsorships to the community. About $171m was funnelled back into clubs to pay off operating costs.
Analysis by the group No Pokies at Essendon, which is campaigning for the AFL club to divest its poker machines assets, found that all Victorian venues had spent $3bn on their own operating costs – while claiming a community benefit tax cut – since 2009.
The scheme allowed poker machine venues owned by AFL clubs to spend $8.6m on operating costs last year to help reach the 8.33% threshold.
A similar scheme operating in New South Wales, known as ClubGrants, has also been criticised as a “shameless rort” by the anti-gambling campaigner Tim Costello and will soon be formally reviewed by the state government.
The NSW gaming minister, David Harris, recently told a parliamentary inquiry that he had listened to strong criticism of the scheme and would act.
“We want to make sure that the system, if it continues to operate, operates in a fair way,” Harris said. “This scheme has been operating for a long time. In a sense, it was getting tired and some people were pushing the parameters.”
The Victorian government has not announced a similar review of its scheme, but has restricted access to poker machines and flagged further changes.
On Tuesday, the state’s upper house passed the gambling legislation amendment bill, which will force all gaming machine areas in all venues, except Crown Casino, to shut between 4am and 10am from mid-2024.
The government has also committed to introduce new laws to force all Victorian gamblers to set binding limits on daily poker machine losses, but there is no timeline for this reform.
This could include the introduction of a mandatory pre-commitment system for all of Victoria’s pokies machines, which will force all players to use a card to sign in and set loss limits.
At the time the changes were announced, the then-premier, Daniel Andrews, described it as the strongest gambling and anti-money laundering measures in Australia.
Guardian Australia understands there was a significant push within the Labor party caucus for the reform, with several MPs from outer suburban areas concerned about soaring losses among their constituents.
Victorians lost $7.4bn to gambling last financial year, although that figure does not include the booming online wagering industry. About $3bn of that money was lost to poker machines.
The Victorian minister for gaming, Melissa Horne, has been approached for comment.
