‘Ruthless and dangerous’: How Australia’s most powerful lobby group sways votes and swings seats

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Independent MP Andrew Wilkie has had the gambling industry in his sights for more than a decade. But then, the industry has also had its sights set on him.

The former soldier-turned-spy — who first came head-to-head with the government in 2003 when he blew the whistle on the flawed intelligence case for the Iraq War — is no stranger to conflict. But, he admits, when he took on the gambling industry in 2010, he wasn’t prepared for the bloodbath that followed.

“I underestimated the power of the poker machine lobby,” Wilkie says.

“At the end of the day, even at the highest level, [Australia’s major parties] were running a protection racket for the gambling industry.”

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In 2010, when Wilkie secured then-prime minister Julia Gillard’s backing to rein in the pokies, the gambling lobby — led by peak industry groups the Australian Hotels Association (AHA) and ClubsNSW — declared war.

By 2012, Gillard had backflipped on her deal with Wilkie, legislating a far weaker set of reforms. In 2013, the Labor government was ousted by the Coalition, which axed those modest changes.

Wilkie chalks up the gambling lobby’s thumping victory to its powerful political base, deep political connections and even deeper pockets.

The Australian Hotels Association and ClubsNSW, together, disclosed roughly $16 million in political contributions between 1998-99 and 2019-20, an ABC investigation has revealed.

This equates to more than one third of political donations disclosed by the gambling industry.

Generous donations are the backbone of a “tremendous lobbying exercise” that has allowed the industry to amass enormous power, says former Court of Appeals judge Anthony Whealy, now chair of the Centre for Public Integrity.

“They know that they’ll get a return call when they make a phone call. They know they’ll get an audience when they want one,” he says.

“And they know that politicians fear being left on the outer by the enormous community that uses hotels and clubs for their social enjoyment.”

It is not illegal to donate to political parties, nor to finance a political campaign, as long as the transactions are made and reported in accordance with Australia’s donations laws.

However, Australia’s federal disclosure laws are some of the weakest in the developed world, experts say.

Each of these circles represents a political donation or expense disclosed by a gambling-related organisation, business or individual between 1998–99 and 2019–20.

This is a subset of a larger dataset of disclosures by both donors and recipients that encompasses more than $80 million in political payments over 22 years from more than 370 gambling-related donors.

The data is based on annual disclosures to the Australian Electoral Commission’s Transparency Register, a public database of the financial dealings of political parties, donors and others involved in the federal electoral process.

Donor-disclosed payments are only a portion of all payments traced to gambling-related entities. However, they include key details not available from disclosures made by recipients, revealing clues about the pattern, timing and purpose of payments.

Over the past 22 years, hundreds of gambling-related donors disclosed a combined $40 million in political donations or direct expenditure.

On average, the total contribution per donor over those 22 years was $203,822.

The top-four donors disclosed more than $3 million each.

Tabcorp Holdings Limited

The fourth-largest donor — at $3.02 million in donations over 22 years — is lottery giant Tabcorp, which merged with rival Tattersalls in 2017 “to create a behemoth”, says Monash University associate professor and gambling researcher Charles Livingstone.

Livingstone and co-author Maggie Johnson shared data from an extensive analysis of gambling industry political donations with the ABC for this story.

“It is slightly amazing that this merger was allowed, since it created a veritable 500-kilogram gorilla in the gambling business,” Livingstone says.

Formed when the Victorian government privatised gaming and wagering in the state in 1994, Tabcorp now operates lotteries in all states and territories except Western Australia, under brands including TattsLotto, Powerball, Oz Lotto, Set for Life, Lucky Lotteries and Instant Scratch-Its. It also has a hand in sports and race betting, Keno and gaming machines.

Before spinning off its casino division in 2011, Tabcorp owned Star City in Sydney (now The Star), Jupiters on the Gold Coast, Jupiters Townsville and Treasury in Brisbane.

“Tabcorp is in a class of its own … They operated half the pokies in Victoria’s clubs and pubs until 2012,” Livingstone says.

Tabcorp’s political contributions policy adopts a bi-partisan approach. It has been a frequent donor to both Labor and the Coalition.

Over the 22 years, it has tipped in $1.55m to Coalition parties and $1.39 million to Labor. (These amounts exclude donations made by TAB Limited, Tattersall’s and Tatts Group, all of which have now merged with Tabcorp.)

However, Tabcorp strayed dramatically from its bi-partisan strategy in 1998-99, and again in 2007-09, when its businesses interests were at stake.

In 1998 and 1999, it donated $130,000 to the governing Liberal Party and just $25,000 to the opposition Labor Party.

The payments coincided with the Productivity Commission’s public hearings into the economic and social impacts of Australia’s gambling industries.

After the release of the final report in December 1999, the Coalition government announced Commonwealth support for a national approach to problem gambling and, in July 2001, passed legislation restricting online gambling services.

In October that year, roughly a month before the federal election, Tabcorp made its largest-ever payments to each of the federal Labor and Liberal parties.

However, its biggest donations on record were in 2007-09, when it gave nearly five times as much to the governing NSW Labor Party than to the NSW Coalition.

Those payments to NSW Labor dwarf Tabcorp’s donations to any other party in any other jurisdiction before or since.

The sudden show of favour coincided with the expiration of all NSW Lotteries gaming licences in July 2007, and subsequent moves to privatise the state company. While Tabcorp was considered a frontrunner, rival group Tatts won the contract in 2009.

In an email statement to the ABC, Tabcorp said it disclosed all payments made under its annual political engagement program, regardless of whether they were required to be disclosed.

“As an ASX-listed company operating in a highly regulated environment … Tabcorp has a responsibility to its shareholders and stakeholders to participate in the process of public policy development,” the statement reads.

Crown Resorts

Crown Resorts and individuals associated with Crown, together, represent the industry’s third-biggest donor group. Its donations escalated over time: Just under $3.8 million of the $4.4 million disclosed over 22 years was donated from 2010 onwards.

The embattled casino giant has faced inquiries in NSW and Victoria that have uncovered money laundering and links to organised crime at its Melbourne operation, while a third inquiry in Western Australia is still underway.

Much has been written about Crown’s numerous political connections and the generous regulatory concessions it has enjoyed. It has a monopoly on the Victorian and West Australian casino markets.

In Western Australia, it is the only venue permitted to have electronic gaming machines.

In Victoria, Crown pays the government $1 a year to lease its Southbank site and is the only venue permitted to trade 24 hours a day. Its gaming machines have a maximum bet of $10, double the limit for all other Victorian venues, and a load-up limit nearly 10 times the $1,000 limit elsewhere.

It’s difficult to prove a donation has led to a decision but there’s little doubt money opens doors, according to Whealy.

“Before the Bergin inquiry [in NSW], I think it’s fair to say that Crown got its own way every time,” he says.

“And it’s very likely that one of the factors involved was the amount of donations that were being paid through the political parties.”

Crown has been a frequent donor in the states where it holds casino licences.

Excluding donations from individuals linked to the casino, Crown’s donations have slightly favoured the Coalition parties ($1.11m) over Labor ($883,973).

However, the largest Crown-linked donations have come from Roslyn Packer, mother of Crown casino’s largest shareholder, James Packer.

Mrs Packer disclosed donations totalling $1.34 million over 22 years, all to the Liberal Party.

Of this, $1.18 million was given between 2012 and 2016, the same period that the governing NSW Liberal Party was pushing for approval for Crown’s Sydney casino.

The key events are outlined in the findings of the NSW inquiry into Crown, known as the Bergin report.

Among them are an August 10 meeting between then-NSW premier Barry O’Farrell and James Packer to discuss the casino proposal. During the meeting, O’Farrell pointed Packer towards a government policy designed for unsolicited infrastructure projects.

This occurred two days after Roslyn Packer made a $10,000 donation to the Liberal Party, her second-ever political donation.

A week later, the rules for unsolicited proposals were changed to allow the deal to go ahead without a competitive public tender.

By the end of October, Cabinet had signed off on the first stage of the project.

Less than one month later, Mrs Packer made her largest donation on record, again to the Liberal Party.

In July 2014, Crown was granted approval to operate a restricted gaming licence at the NSW casino from 2019.

Then, in August, in Victoria, the Coalition government announced an agreement granting Crown Melbourne multiple concessions, including the right to claim compensation of up to $200 million if the government made regulatory changes that adversely impacted the casino.

In November 2014, Mrs Packer donated $100,000 to the federal Liberal Party.

A year-and-a-half later, on June 28, 2016, the NSW Planning Assessment Commission gave Crown’s $2-billion Sydney complex the green light.

Mrs Packer made her second-largest donation on record five months later.

In 2018-19, Mrs Packer made her last political donations: four payments to the NSW Liberal Party totalling more than $150,000. The final payment was made in April 2019.

In July that year, the Nine network aired explosive allegations of links to organised crime syndicates and suspected money laundering at Crown.

Two weeks later, the NSW gaming regulator, the Independent Liquor and Gaming Authority, announced that former supreme court judge Patricia Bergin would chair an inquiry into Crown’s operations.

Roslyn Packer did not respond to the ABC’s questions about whether her donations had any link to the Packers’ business interests.

However, a spokesperson for Mrs Packer confirmed that she has been a supporter of the Liberal Party for most of her life, adding: ”All her donations are publicly declared and in accordance with campaign laws.”

Crown would not answer questions about the reasons for its political donations. In an email statement, a Crown spokeswoman said: “On 16 March 2021, Crown Resorts announced that effective immediately, Crown and its associated entities would cease monetary or in-kind political donations.”

ClubsNSW

Not-for-profit peak body ClubsNSW and its branches — also known collectively as Clubs Australia — are the industry’s second-biggest donor, contributing $5.38 million over 22 years.

In NSW alone, clubs operate more than 65,000 electronic gaming machines, generating annual net profits of roughly $4.26 billion. 

“In 2010, ‘12 and ‘13, they worked out very easily how to intimidate politicians … and how to make sure they’ve got the best political connections in the country,” Livingstone says.

“Dollar for dollar, they’re the most persuasive political operators in the country.”

ClubsNSW even sent its executives to Washington DC to learn from the National Rifle Association — the peak body of the powerful US gun lobby — how to use its large membership base to force political outcomes.

“They can swing seats and swing elections, particularly in NSW, where the clubs in Western Sydney are like casinos — between them they have millions of members,” Wilkie says.

ClubsNSW are the most active in NSW, where poker machines in clubs generate twice as much revenue as those in pubs.

Before 2010, ClubsNSW donated equally to the state’s Coalition and Labor branches.

Since 2010, it has donated nearly three times as much to the Coalition as to Labor in NSW.

ClubsNSW has signed three memoranda of understanding with the NSW Coalition.

The first MOU provided a raft of benefits for clubs — including a $300 million tax break and an extension to the ClubsNSW license for Keno from 2022 to 2050 — if then-opposition leader Barry O’Farrell won the March 2011 election. 

The 2014 agreement with premier Mike Baird and the 2018 agreement with premier Gladys Berejiklian extended the benefits in the event the Coalition government was re-elected.

ClubsNSW’s donations in NSW peaked at the end of 2010, largely due to payments to the Liberals totalling $170,000, and a $50,000 payment to the Nationals.

These were made within days of the Coalition vowing to fight any federal reforms that would reduce state poker machine revenue.

ClubsNSW donations over the years have identified the three premiers involved in these agreements, as well as the Nationals’ George Souris, who later became minister for racing and gaming.

These MOUs are ”very unusual”, Livingstone says.

Signed in “a blaze of publicity” at an annual general meeting of the Clubs Association, it was “as though they were … [demonstrating] how much power they’ve got over the government.”

However, ClubsNSW’s largest payments were not to any party. They were expenses for the political campaign it waged against the federal government’s proposed poker machine reforms.

“They played it out perfectly,” Livingstone says.

“They took money from everywhere, including from the casinos and from the AHA [Australian Hotels Association], and they provided the public face because they were able to portray themselves as community organisations.”

Livingstone says the industry campaign was a show of force no one saw coming.

“They really demonstrated very adroitly just how good they are at this business,” he says, ”and I think that’s probably a lesson that no one’s forgotten.”

In 2010-11, ClubsNSW disclosed expenses totalling just under $950,000 for distribution and broadcast of “political matter”, and federal election opinion polling for its April 2011 “It’s un-Australian” campaign attacking the proposed reforms.

Just over $216,000 came from the AHA.

ClubsNSW trebled its war chest for the second phase of the campaign, disclosing nearly $3.5 million in direct political expenditure in its 2011-12 returns.

More than two-thirds came from the AHA, the Australian Casino Association and the Gaming Technologies Association.

Launched in September 2011, the “Won’t Work Will Hurt” campaign targeted marginal Labor-held seats with direct mail, community rallies and large billboards naming the local MP and asking: “Why don’t you stand up for our community?”

The Gaming Technologies Association disclosed a further $780,592 in direct political expenditure. Its members include poker machine manufacturers Ainsworth Game Technology, Aristocrat, Aruze Gaming Australia, IGT (Australia), Interblock Asia Pacific, Konami Australia, Scientific Games and gambling empire Tabcorp Holdings Ltd.

However, the association did not respond to questions about what it had spent the money on, telling the ABC that the disclosures were made “almost 10 years ago” and “in full compliance” with Commonwealth transparency requirements.

In the lead-up to the federal election in September 2013, ClubsNSW donated three times as much to the Coalition ($460,470) as to Labor ($131,950).

While the largest payments went to the federal branches of both parties, a further 20 donations targeted federal campaigns in NSW — often in marginal seats — with donations as low as $1,200.

The industry’s strategy was classic carrot-and-stick, Livingstone says. “If you’re with us, we’ll look after you. If you oppose us, we will go after you with no remorse.”

ClubsNSW did not answer questions about whether it had used political donations to intimidate or pressure politicians.

“All political donations made by ClubsNSW are declared, made transparent through the relevant authorities and comply with the law,” a ClubsNSW spokesperson told the ABC.

“Politicians and political parties [that] support not-for-profit clubs deserve to be supported.”

Australian Hotels Association

By far, the largest gambling industry donor are the Australian Hotels Association (AHA) state and national branches, which made payments of at least $10.67 million over the 22 years, roughly twice ClubsNSW’s contribution.

The AHA represents more than 5,000 hotels and pubs across the country, ranging from country pubs to five-star resorts.

“As a young lawyer, I was one of the leading barristers dealing with the hotel and gaming industry,” says the Centre for Public Integrity’s Whealy.

“I’ve learned a lot about the way it operates and came to know a lot of people in the industry.”

A long-time campaigner on integrity issues, the former judge is perhaps best known for his role in the corruption inquiry that led to the jailing of disgraced NSW Labor powerbroker Eddie Obeid in 2014.

“During my visits to Canberra, in Parliament House, I’d look out into the yard and see people I knew very well from the Australian Hotels Association or ClubsNSW, who were clearly there lobbying the politicians fiercely,” Whealy says.

“[That level of access has] always worried me greatly … They know they have the ear of government and they use it very successfully.”

The AHA has not shied away from favouring one side of politics over the other, in both state and federal elections, when the political spotlight falls on its gambling interests.

Its donations have ramped up over time, with nearly 77 per cent made since 2010.

Like ClubsNSW, the AHA’s contributions spiked in 2010-13, during the war against Gillard and Wilkie’s poker machine reforms.

During this time, the AHA’s largesse facilitated golf days, auctions, catering and room hire.

It also tipped funds into more than a dozen election campaigns, mostly NSW Liberals.

The biggest beneficiary was then-NSW opposition leader Barry O’Farrell, who was identified in connection with payments totalling $234,500 that year. His largest donations came after he declared his opposition to federal pokies reforms. 

O’Farrell won government in March 2011.

The following year, the AHA used a similar strategy in the Northern Territory.

Two weeks ahead of the August 2012 territory election, the AHA donated $150,000 each to NT Labor and the Country Liberal Party.

The payments were the largest on record for NT Labor and the CLP’s largest donation from an unlinked entity.

In November 2012, the NT CLP government opposed the Commonwealth’s National Gambling Reform Bill.

In the lead-up to the September 2013 federal election, the AHA donations strategy mirrored ClubsNSW’s, favouring the Coalition overall while targeting a select group of Labor MPs.

That year, it donated eight times as much to the Coalition as to Labor.

Labor MPs targeted for donations included then-federal treasurer Chris Bowen ($10,000), then-chief government whip Joel Fitzgibbon ($10,000), and then-deputy PM Anthony Albanese ($10,253).

Liberal candidates targeted for donations included pub baron Craig Laundy ($59,376), then-shadow finance minister Andrew Robb ($7,500), senator Eric Abetz, later named employment minister ($7,256), current PM Scott Morrison ($5,000) and Kevin Andrews ($5,000), who oversaw development of Coalition’s gambling policy ahead of the September 2013 election.

“At the time that [pokies] legislation was being considered, there was a huge ramp-up in donations from the sector to the Coalition. When that legislation was shelved, donations fell away,” the Grattan Institute’s Danielle Wood says.

“It’s difficult to interpret that ramping-up, at that crucial time for the sector, as anything other than an attempt to try [to] influence the debate and, potentially, intimidate the government.”

The AHA has also flexed its financial muscle ahead of state elections.

It has consistently taken a keen interest in South Australia, home state of former independent senator Nick Xenophon, whose political rise was founded on an anti-pokies platform.

Over the 22 years, the AHA has spent more in SA ($1.76 million), with its 630 hotels, than in NSW ($1.42 million), where it represents 1,800 licensed premises.

In Wilkie’s home state of Tasmania, the AHA has given nearly 60 times as much to the Liberals ($329,043) as to Labor ($6,000). 

Much of this occurred in 2018, when Labor promised to remove pokies from hotels and clubs when the existing license expired in 2022.

Under that licence, the Federal Group — which owns 12 hotels plus the state’s two casinos — has a monopoly on poker machines licences.

The backlash against Labor was fierce.

“We saw a 10-fold increase in donations from pro-gambling groups in that election compared to previous ones,” Wood says.

“More than 90 per cent of the Coalition’s declared donations came from gambling interests in that election.”

Of the $254,350 the AHA disclosed in contributions to Tasmanian parties in 2017 and 2018, all but $1,000 went to the Liberal party.

Other gambling businesses followed suit.

The Federal Group — which in the previous four state elections had donated roughly equal amounts to Labor and Liberal — this time donated $50,000 exclusively to the Liberals.

Three other Tasmanian hotel and pub groups made their only donations that year: The Goodstone Group ($80,000), which spans nine hotels; Kalis Hospitality ($70,000), which owns the Buffalo Hotel, Beachfront Bicheno and Mornington Inn pubs; and EBC Leisure ($44,000), which sold its three pubs in 2019.

The Liberals won the election.

After the Tasmanian election in March, the industry set its sights on the Victorian election in November. It tipped more than $1 million into the coffers of the major parties, double its contribution in any previous year.

Premier Daniel Andrews’ election campaign was backed by more than $816,000 from gambling interests, including $714,000 donated by the AHA ahead of the election.

The Coalition picked up more than $478,000 from gambling groups, including $311,600 from the AHA.

In Victoria the aim was to deny the balance of power to the Greens, which had campaigned on a strong anti-pokies platform, Livingstone says.

That year, the AHA imposed “a special one-off levy” on pokies in pubs to help bankroll its political donations ahead of the state election in November. 

About two-thirds of poker machine revenue in Victoria is generated through machines in pubs, with only a third coming from machines in clubs.

“So the AHA has a very strong vested interest in maintaining that revenue stream,” Livingstone says.

In Tasmania’s 2018 election, Livingstone says, the industry’s influence was profound.

“Every pub that I saw, when I visited Tassie during that campaign, had a big banner supporting the Liberal Party and attacking Labor and the Greens,” Livingstone says.

“It’s possible that they swung the election.”

Earlier this year, Tasmanian Labor signed a deal with the Tasmanian Hospitality Association, pledging support for poker machines, Keno and other gambling to continue in pubs and clubs.

The AHA did not respond to requests for comment.

Wilkie had no political experience when he was elected as an independent, clutching the balance of power in 2010. He says Gillard’s betrayal in 2012 destroyed any faith he may once had in Australia’s major political parties.

“Gillard looked me in the eye. We negotiated a deal. We shook hands. We signed an agreement,” he says.

“And I learned, particularly by the time Julia Gillard reneged on the deal with me, that I would have to drag [both major parties] kicking and screaming.”

But if the numbers are anything to go by, Wilkie’s popularity has only increased since that resounding defeat.

From a margin of just 1 per cent in 2010, Wilkie will contest the upcoming federal election with a 22 per cent margin under his belt, making his seat one of the safest in the House of Representatives.

Both Wilkie and the Greens are campaigning through separate bills to strengthen Australia’s disclosure system, among other reforms, by:

  • banning political donations from particular industries, including gambling
  • lowering the disclosure threshold to $1,000
  • capping donations and electoral spending
  • requiring real-time disclosure of donations.

And this time Wilkie knows what he’s up against.

“[The gambling lobby] will fight tooth and nail to maintain its income … They are ruthless and dangerous people,” he says.

“But I’ve dealt with bigger challenges than these clowns in my life. The more they try to bully me … the more pissed off I am, and hardened in my resolve.”

A ClubsNSW spokesperson told the ABC: ”Andrew Wilkie is an avowed anti-gambling prohibitionist and anything he says about the industry should be read in that light.”

Federal Group executive general manager Daniel Hanna said the group had consistently donated to a range of parties and individuals across local, state and federal elections for many years.

“All donations have been appropriately reported,” he said.

The ABC approached the Liberal Party, the ALP, Julia Gillard and Barry O’Farrell for comment but did not receive a response.

This is the second part of an ABC investigation into political payments from the gambling industry. The first part uncovered over $80 million in political payments from more than 370 organisations and individuals with an interest in gambling. The next part will examine state and territory data on political donations.

Credits

Reporting: Inga Ting
Development: Katia ShatobaNathanael Scott
Design: Alex Palmer
Research: Michael Workman, Anna Freeland, Stephen Hutcheon

Notes about this story

  • This project was supported by $20,000 funding from the Google News Initiative as part of the Australian International Documentary Conference’s Raw Data, Real Stories data journalism pitching initiative.
  • Datasets shared with the ABC by The Greens’ Democracy For Sale project and Monash University researchers Charles Livingstone and Maggie Johnson formed the starting point for this analysis.
  • This analysis examined annual returns and election returns lodged by donors, political campaigners and third parties. Political campaigners and third parties spend money above a certain threshold to influence the electoral process. Detailed definitions are available via the Australian Electoral Commission.
  • This analysis includes information found in the PDF records that are available for download on the Transparency Register but not found in its digital records or downloadable data.
  • Unless otherwise specified, donors with multiple branches (for example, state or territory divisions) have been grouped for the purpose of reporting total amounts contributed or received.
  • The ABC has corrected a small number of errors found in the Transparency Register data. In some disclosures, both the donor and AEC have assigned a politician to the wrong party. In these instances, ABC News has assigned this payment to the correct party.
  • Payments earmarked for a federal politician but assigned (either by the donor or the AEC) to a state branch of the same party have been left unchanged. For example, a donation earmarked for Joe Hockey was assigned to the state Liberal Party rather than the federal Liberal Party. ABC News has not amended this.
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