Costello noted that Woolworth’s announcement will see the Mathieson family’s influence significantly reduced, saying: “It is good to see Woolworths regularise the corporate structure of its pokies empire, diluting the power currently held by billionaire joint venture partner Bruce Mathieson, who owns 25 per cent of the current ALH joint venture but has management control through his son, ALH CEO Bruce Mathieson Junior. Woolworths is set to cut and run from its poker machine business, announcing plans to combine its drinks and gambling arms into a separate venture which it will offload.
Claims that Woolworths encourages its pub staff to spy on pokie players..
Claims that Woolworths encourages its pub staff to spy on pokie players
An interview with a Woolworths whistleblower released by MP Andrew Wilkie.Source:Supplied
WOOLWORTHS has been accused of “spying” on poker machine players at hotel venues and keeping a secret database of their personal information to assist staff in encouraging increased gambling.
Tasmanian MP Andrew Wilkie has released screenshots of internal Google Drive documents, viewable to staff across Australian Leisure and Hospitality Group’s 400 venues — which collectively run more than 12,000 pokies — along with an interview with an ALH whistleblower.
On one shared document titled “Gaming Daily Briefing Sheet”, bold letters read, “We have a massive weekly target to beat last year. We need to be out on the floor really pushing drinks. It’s tax time so people will have more money to spend. Hand out drink cards, be out there as much as possible. Do whatever you have to do to keep people in the room!”
Underneath, handover notes from morning shift staff read, “A few faces (not regulars) came back today that were in yesterday for Sunday Funday, pushing drinks and sandwiches/cakes to keep them coming back!”
They later note a regular gambler “came in at midday”. “1:50pm: We’ve had a few big hitters in the room for about an hour now! Young couple betting $3 and $4, as well as [the regular] hitting his usual $5! Could be a great hour!”
The notes go on to say the room took in $18,700 in the hour. “Smashing out drinks to keep everyone in the room,” it said. “Another great hour for 2pm, $18,000 again.”
On a separate sheet, staff are reminded of incentives available, including a $20 gift card “when you beat your shift target”, and a $50 gift card for every staff member that beats their target that week “if we exceed the turnover target of $1.7 million”.
“Slow start to the day in gaming,” morning handover notes read. “Extremely busy in restaurant. Gaming drink/coffee rounds consistently offered throughout the day with only small punters in the room. Only one hot platter supplied during the day. A lot of elderly people in however not a lot of T/O [turnover].”
Evening shift staff then added, “Started slow, picked after nine, coffees, drink shouts and toasties trying to keep them in, a lot of promo tickets going out.”
Staff at ALH share notes on pokies players.Source:Supplied
“They just think that you are having a general chitchat.”Source:Supplied
In the interview released by Mr Wilkie’s office, the whistleblower said a lot of people in the industry felt uncomfortable with the “predatory tactics”.
“It’s unethical, and essentially you are looking over people’s shoulders, and documenting what people are doing and they don’t know that you are doing that,” he said. “They just think that you are having a general chitchat with them but you’re actually profiling it.
“It used to be an unwritten thing, you’d talk to patrons in a genuine sense. But now those genuine interactions aren’t what they used to be. We’re actually writing it down so that we can get people to stay for as long as possible to put as much money into the machines as possible.
“You know the ins and outs of their life. You’re writing down what they do, what time they normally come in, the teams they barrack for, and then you can go and have a conversation with them very, very easily because you’ve got that background information. The longer people stay there, the more they lose, that’s how pokies work.”
He said the more people bet, the more attention staff would pay to them.
“If you’re betting $5, the company is going to look after you because you’re going to lose the most amount,” he said. “So we’ll spend more looking after you to keep you there longer because you’re important.”
The whistleblower added, “Over the years I’ve seen people crying at their machines or urinating on their chairs because they have been playing for so long, they’ll stay all day and even sometimes wet themselves. It’s not right, how can that be right?”
In a speech to Parliament on Wednesday morning, Mr Wilkie slammed the behaviour as “immoral” and “possibly illegal”. “In all these venues, there are some staff who record personal information about poker machine players, without their knowledge, and share it electronically with the other venues,” he said.
“This isn’t just basic information — we’re talking things like jobs, times people come in, favourite drinks, favourite football teams, whether they have a partner and what their preferred bet level is.”
Mr Wilkie said in Tasmania alone, Woolworths owned five poker machine venues at which Tasmanians lost $10 million every year, including $4 million in his electorate.
“This makes a complete and utter mockery of the ridiculous claims being made by the poker machine industry in Tasmania as part of the ‘Love Your Local’ campaign, because these revelations show that these aren’t loveable local pubs but rather very big business that shares its customers’ most private details,” he said.
“And not only are they big business, they’re also a part of a co-ordinated campaign to spy on unknowing patrons so they can fleece even more money out of their pockets, including the gambling addicts who make up 15 per cent of people who play weekly.”
Mr Wilkie said the revelations “demonstrate just how low the poker machine industry stoops to create addicts”. “We already know this is an industry that is prepared to lie to the community, whether it’s about jobs or the rates of gambling addiction,” he said.
“And now we know the industry is prepared to abuse the trust of their customers to make money. This is disgraceful behaviour and they should be called out.”
In a statement, ALH head of regulatory and corporate affairs David Curry said the company “takes its obligations for the Responsible Service of Gaming and the Responsible Service of Alcohol in all its venues extremely seriously”.
“Our industry and operations are robustly regulated by independent authorities in each state and our compliance with all laws and regulations is not negotiable,” he said.
“ALH must put its customers’ interests first. There is a line which must be respected between legitimate customer service and loyalty initiatives that are part and parcel of every hospitality business and the requirements of the RSG and RSA codes.
“If there are instances where that line has been crossed ALH is committed to taking the necessary steps to rectify any breach and address any non-compliant behaviour.
“To this end we have notified the independent regulator in Queensland where the matters canvassed today originated in mid-2017 and stand ready to provide any assistance or further information if the regulator requires.”
In a statement, Woolworths Group chairman Gordon Cairns said the company was “concerned” about the allegations. “We and ALH take our responsibilities in gaming and the service of alcohol very seriously,” he said.
“At Woolworths, our priorities and values must always match those of our customers and communities we operate in and this includes taking important steps to ensure we, through ALH, are a responsible gaming operator.
“At its last Annual General Meeting, Woolworths reaffirmed its commitment to being the leader in responsible gaming which is conducted through its joint venture with ALH.
“In late 2017 ALH engaged Canada’s Responsible Gambling Council, an independent non-profit organisation dedicated to problem gambling prevention, to conduct an independent review of ALH’s gaming operations.
“ALH will expand RGC’s review to include the allegations raised by the former ALH employees and Mr Andrew Wilkie. We would encourage them, Mr Wilkie and any others with relevant information to be part of the independent review.”
ALH has been contacted for comment.
Supermarket giant Woolworths is combining its liquor and hospitality businesses ahead of a divestment next year but insists it is not trying to distance itself from the gambling industry.
Woolies is currently Australia's biggest pokies machine owner through its majority stake in ALH Group, but will merge the hotels, pubs and gaming company with its Endeavour Drinks business by the end of 2019.
It will then separate the new standalone Endeavour Group, which would include the Dan Murphy's and BWS liquor chains, by the end of 2020 through a demerger or other value-accretive alternative.
Shares in Woolworths rose by as much as 3.7 per cent after Wednesday's announcement to a more than five-week high of $34.17, and were still 3.22 per cent higher at $33.99 at 1440 AEST.
Woolworths did not say whether it plans to sell or list the new business, although it does expect to retain a minority shareholding whichever route it takes.
Wesfarmers pursued the latter option last year when it divested supermarket chain Coles, retaining a 15 per cent stake as Woolworths' fierce rival listed on the ASX.
Woolworths has already offloaded its petrol business and said the next separation will simplify its structure and help it focus on its core food and everyday needs markets.
'The board believes that a merger of Endeavour Drinks and ALH followed by a separation, is in shareholders' best interests and will benefit customers and team members of both groups,' Woolworths chairman Gordon Cairns said.
Chief executive Brad Banducci told analysts the sale was not to distance Woolworths from gambling activities, despite the company facing pressure from activists to do so.
'It's not about gaming, it's about helping both businesses unlock their full potential,' Mr Banducci said.
Woolworths Pokies Revenue
Independent Federal MP Andrew Wilkie was among those to welcome Woolworths' planned exit from Australia's largest poker machine operator.
'Poker machines are a toxic product and any responsible business should have nothing to do with them,' Mr Wilkie said.
'Poker machine money is blood money and it was always unconscionable for one of the country's biggest supermarkets, and most well-known brands, to profit from human misery for so long.'
Ratings agency S&P Global said, while the separation may reduce Woolworth's scale and diversity, the reduced exposure to hotels and gaming 'removed significant regulatory risks and improves the group's perceived social license to operate'.
'In our view, the group's Australian and New Zealand food business remains strong,' S&P said.
Endeavour Drinks and ALH together were responsible for more than 30 per cent of Woolworths' earnings in the 2018 financial year, with Endeavour Drinks the group's second-largest contributor after Australian supermarkets in terms of both sales and earnings.
The integrated Endeavour Group will include more than 1,500 BWS and Dan Murphy's retail drinks outlets and 327 ALH hotels and neighbourhood pubs.
Other businesses to be included in the merger include Endeavour Drinks' own and exclusive brands business, Pinnacle Drinks; Langton's, a fine wine auction and retail business; Cellarmasters, a wine subscription business; and an 8.7 per cent stake in ALE Property Group.
The separation will leave Woolworths owning Australia's No.1 supermarket chain, New Zealand's Countdown supermarkets, and the Big W department stores.
Bruce Mathieson Group, the junior partner in the ALH joint venture that includes hotels and pokies, will swap its 25 per cent stake for a 14.6 per cent interest in the new Endeavour Group.
Woolworths Owns Pokies
Woolworths chief financial officer David Marr will switch to a chief operating officer role to oversee the project, with Stephen Harrison taking over as CFO on August 1.