A group of councils is demanding the Victorian government overhaul a tax minimisation scheme for poker machine venues, arguing it has allowed them to significantly overstate their benefit to the community.
The collection of mayors warn some venues have not paid a share of gambling profits to charities as promised, while using sponsorships of local sporting teams to advertise their venues and attract local residents to gambling hubs.
The group was also concerned about venues promising extra payments to communities when applying for more poker machines, arguing these initiatives did not offset the damage caused by gambling harm.
Their complaints focus on a scheme that gives Victorian clubs a tax break if they return 8.33% of gambling revenue to community initiatives.
Overwhelmingly, this money is reinvested into the clubs’ own operating costs and upgrades rather than charities and is listed as a “community benefit”.
The mayor of Brimbank council, Ranka Rasic, said her council raised concerns with the government about the scheme and called for reforms in 2021. The mayor of Hume city council has made similar calls.
“This has been a long-running issue,” Rasic told Guardian Australia.
“I don’t even know how to begin – it’s frustrating and disappointing. The people of Brimbank experience more gambling harm than [at] any other government area. We have a real problem here.
“The state government needs to acknowledge its own addiction and its reliance on gambling venues as income. I think when they do that, that’s when the problem will be resolved.”
Last month, every council in Victoria supported a motion calling on the government to urgently review the scheme to “ensure that the losses from gambling are directly invested back into community and community-led initiatives”.
In May, the councils called for the definition of a “community benefit” to be changed to ensure that gambling profits were shared with “genuine philanthropic organisations or charities”, rather than the clubs’ own upgrades.
The gaming minister, Melissa Horne, was contacted for comment.
While a majority of councils want change, the push for reform was being spearheaded by a handful of mayors who were worried about the harm poker machines were causing to socioeconomically disadvantaged communities, where losses were higher.
The Greater Dandenong city council, on Melbourne’s south-eastern fringe, is one the most culturally diverse in Australia and among the most disadvantaged. It loses an average of $801 per adult to gambling each year. That rate is almost nine times higher than the $94 lost per person in Boroondara, one of the state’s more advantaged areas.
The council told an ongoing parliamentary inquiry earlier this year that “concern has been voiced by local governments and others about instances where applicants have promised to fund community activities”.
In 2021, the state regulator called out a venue for not paying about $280,000 in promised community contributions over a decade, despite still applying for more poker machines. The regulator called out a separate venue last year for seeking an extra 10 machines despite only paying less than 2% of the community contributions it was obliged to pay.
Monash council in Melbourne’s eastern suburbs told the inquiry that some sponsorship arrangements were allegedly designed to get more people into the venues rather than solely supporting the community.
“Monash council has received many reports from local sporting clubs that their existing sponsorship arrangements include the requirement to advertise the ‘venue’ such as venue logo placement [and the] distribution of electronic gaming machine venue ‘loyalty cards’,” the council said in a submission to the inquiry.
The council also claimed sponsorship arrangements required function to be held at the gaming venue and for social media posts to encourage people to “support our sponsor”.
“These sponsorship arrangements force local community clubs to endorse gambling environments and actively encourage their members to attend electronic gaming venues.”
• In Australia, Gambling Help Online is available on 1800 858 858. The National Debt Helpline is at 1800 007 007. In the UK, support for problem gambling can be found via the NHS National Problem Gambling Clinic on 020 7381 7722, or GamCare on 0808 8020 133. In the US, call the National Council on Problem Gambling at 800-GAMBLER or text 800GAM.
