Best Government Money Can Buy

Melbourne Herald Sun - Michael Warner - November 15, 2006

A SECRET document reveals how pokies bosses were told by a Labor Party powerbroker that the Bracks Government would favour a sweetheart deal to extend their control of Victoria's gaming industry.

The explosive document seen by the Herald Sun reveals how former Kirner government minister David White told Tatts it would be given preferential treatment by the Government when tendering for new lucrative gaming licences.

"David said that the Government is happy to have Tattersall's and Tabcorp continue in the duopoly," the document says.

"And he feels that the process would be that both companies submit a tender when the time presents, and if the tenders are acceptable to the Government, as to new terms post-2012, the others would not be asked to tender against the two of us.

"The Government has only one interest, and that is to protect the state's revenue base, and that the surplus in the Budget regularly comes from the gaming industry.

"This is not going to change and that is why the Government will always be keen for the likes of Tabcorp and Tattersall's to continue."

The leaked Tatts notes appear to suggest a reason behind the gaming giant's shock decision to float on the sharemarket last year. The Victorian gaming industry is worth $2.5 billion a year.

"David thinks going public may be a condition of the extension of the licence, perhaps as the time draws near and Tattersall's should initiate such a move," it states.

The document is a record of a meeting between Tatts chiefs and Mr White at the company's St Kilda Rd headquarters in November 2003.

It casts serious doubts over the Government's review of pokies licences just 10 days out from the state election.

The Herald Sun has independently confirmed its accuracy.

Mr White is the head of the ALP's policy agenda committee.

He is also working as a consultant to Tatts through his job at lobby group Hawker Britton to assist in the company's bid to renew its pokies licence after current contracts expire in 2012.

When asked by the Herald Sun how he become aware of the government's thinking on poker machines, Mr White said: "You just know from talking to public servants, what the intention of the Government, you know what the Government's policy might be."

But Mr White denied ever saying what was reported in the document.

"No . . . none of it is true," Mr White said.

Mr White did not deny attending the meeting, but said he had been unaware of the document's existence until contacted by the Herald Sun.

"It's not consistent with what is likely to be the tender process or what anyone would expect to be the tender process," he said.

When the Herald Sun approached the Bracks Government for comment, a spokesman for Gaming Minister John Pandazopoulos said he believed Mr White had already made a denial.

"I understand he's already denied saying those things," the spokesman said, in a comment suggesting Mr White had tipped off the government that he had been approached by the Herald Sun.

"(But) any comment by a consultant to a client is a matter for them and cannot be taken as the view of Government," the spokesman said.

A Tattersall's spokesman said the company's newly appointed chief executive officer Dick McIllwain had not seen the document.

"He's not here to re-engineer the past but to influence the future," spokesman Michael Mangos said.

Hundreds of politically sensitive documents have been obtained from Tatts in recent months as part of a bitter $100 million court battle between a group of beneficiaries of Tatts founder George Adams and four former company trustees.

Lawyers have inspected thousands of financial reports, minutes and briefing papers dating back to the late 1980s hoping to find evidence that the trustees breached their duty of trust.

Many of the documents detail dealings and meetings between the Bracks Government and Tattersall's bosses.

A decision on whether they will be released publicly will not be made until after the November 25 poll.

Mr White was the gaming minister in the former Kirner government and is regarded as the father of the Victoria's pokies industry because of his role in that government's decision to introduce gaming machines in 1992.

A Bracks Government panel is now reviewing whether the Tatts and Tabcorp poker machine duopoly - in place since the early 1990s - should survive beyond its expiry date or be replaced with an owner-operator model.

Its recommendations are due early next year.

Under questioning in Parliament last month, Mr Bracks was asked if he had ever personally met officials from Tattersall's to discuss poker machine licences.

"The answer is no," Mr Bracks said.

Tatts and Tabcorp are licensed to operate a half share of the state's 27,500 suburban poker machines until 2012.

They each reap about one third of the massive $2.5 billion lost by Victorians on poker machines each year.

The Government's own annual pokies tax take has surged beyond $1 billion.

Gaming industry analysts predict the Government could demand new 20-year upfront pokies licence fees from Tatts and Tabcorp of up to $5.8 billion.