A Labor-led parliamentary inquiry in Victoria is expected to call for an overhaul of a tax minimisation scheme for poker-machine venues that has been widely criticised by local councils, public health experts and anti-gambling groups.
Guardian Australia understands a report by the public accounts and estimates committee, to be tabled in parliament’s next sitting week, will recommend changes to the so-called “community benefit” scheme for pokies venues.
The scheme allows gaming machine revenue to be taxed at a lower rate, provided 8.33% of gambling revenue was invested back into the community. To claim the subsidy, venues are required to lodge a statement that shows how they are benefiting the community, either directly or indirectly.
But the statements show the money has largely been reinvested into the clubs’ own operating costs and upgrades, rather than going to charities.
Foxtel subscriptions, cleaning products, gardening and laundry services, free soft drink promotions for children and member promotions have all been claimed as “indirect community benefits”.
One club, in the Bendigo East electorate of premier Jacinta Allan, claimed $45,234 on direct benefits, such as donations, gifts and sponsorships, and $202,487 on indirect community benefits in the 2022-23 financial year.
These indirect benefits included $31,346 on electricity, $26,625 on security costs, $15,736 on repairs and maintenance, $23,075 on cleaning and rubbish removal, $5,207 on PayTV and $2,149 on pest control, among others.
In the seat of Werribee, held by the treasurer, Tim Pallas, a club claimed $251,980 on donations, as well as $1.2m on operating costs including $742,986 on wages and superannuation, and $73,800 on discounted meals for members and seniors.
The scheme has enraged public health experts, social service groups, anti-gambling advocates and local councils. Last month, all Victorian councils voted to support 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”.
David Clark, president of the Municipal Association of Victoria, said councils wanted to work with the government to reform the community benefits scheme.
“Councils across the state are calling for gambling venues to invest in genuine philanthropic organisation or grassroot organisations and charities instead a claiming community benefit for sponsorships or operations which only benefit the venue,” Clark said.
Tim Costello, the chief advocate of the Alliance for Gambling Reform, described it as the “longest-running rort in Victorian public life”.
“It’s been abused from the start. Both sides of politics looked away,” Costello said.
“These groups have been able to window-dress themselves as wonderful community citizens and buy immunity from any pokies reform. They give a small bit of money to the community netball team, to the local football club … but most of the money goes to themselves.”
Costello appeared before the public accounts and estimates committee, which has been investigating gambling harm.
When it approached relevant stakeholders, the committee asked a series of questions, including whether “further action” was required by the Victorian government to “optimise gambling and liquor licensing regulation and compliance, including payment of community benefit fund contributions”.
While the purpose of the inquiry was to determine how the recommendations of two auditor general reports have addressed gambling harm, the report is expected to be far-ranging.
Members of the committee, belonging to both major parties, said recommendations concerning political donations, gambling advertising, daily loss limits and further restrictions on operating hours were also expected to be made.
Earlier this month, parliament passed laws to force gaming machine areas in all venues, except Crown Casino, to shut between 4am and 10am from mid-2024.
The government also committed to force gamblers to set binding limits on daily poker machine losses, but there is no timeline for this reform.
There has been a significant push within the Labor party caucus for further reform, with several MPs from outer suburban areas concerned about soaring losses among their constituents.
Costello said he was glad to see Labor MPs had “woken up” to gambling harm in their electorates.
A Victorian government spokesperson said the government was “aware of concerns around gaming machine taxation and [is] considering them”.
“It’s important that clubs invest back into the communities they’re hosted by, to ensure more people can benefit from the revenue they bring in,” the spokesperson said.
“We will respond to the parliamentary inquiry’s report in due course.”
• 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.
