Tabcorp’s welfare payment from RSL veterans fund keeps pokie losses ticking

Jacqui Lambie with young vets at pokies-free Hawthorn RSL. Photo by Hawthorn member Michael Currie.

The RSL in Victoria is captured by the pokies lobby and Tabcorp. As we remember the fallen on Remembrance Day, don’t forget the dubious deals and scandals besetting the RSL, writes journalist and anti-gaming campaigner Stephen Mayne.

As RSL volunteers sell poppies nationally to raise funds for veteran welfare ahead of tomorrow’s Remembrance Day commemorations, the shoddy governance of the national federation is coming under increasing scrutiny.

Inside RSL Victoria, a group of younger veterans is shaking up the old guard and there’s been a raft of resignations from the ranks of the board and senior management in recent weeks as various governance SNAFU’s (situation normal – all f#*ked up) and pokies-related scandals have emerged internally.

Most of them will become public in the weeks ahead but here’s just one to whet your appetite:

The East Malvern RSL sub-branch in Peter Costello’s old seat of Higgins had a badly run sub-scale pokies operation in an affluent part of town which was losing money for veterans but delivering handy profits for Tabcorp, the outsourced manager of most of RSL Victoria’s 2,800 pokies spread across 50 gambling dens.

The Tabcorp deal sees it paid $28 per day, per machine, regardless of performance, so with 25 machines the East Malvern RSL sub branch was paying Tabcorp $255,500 a year.

The bad business practice is obvious when you consider these pathetically low gambler loss figures reported by the Tabcorp-advised East Malvern RSL to the Victorian Government’s gambling regulator:

  • 2013-14: gamblers lost only $779,528 on 33 machines
  • 2014-15: gamblers lost only $667,307 on 25 machines
  • 2015-16: gamblers lost only $607,682 on 25 machines
  • 2016-17: gamblers lost only $567,437 on 25 machines
  • 2017-18: gamblers lost only $522,571 on 25 machines
  • 2018-19: gamblers lost only $121,118 on 25 machines

That’s before Tabcorp was finally told to take them away in late 2018.

In other words, over the past five years, Tabcorp has been paid more than $1 million by the East Malvern RSL as the RSL has slowly gone broke. That sort of machine revenue of about $24,000 a year is just pathetic, especially when compared with Crown Melbourne which does about $160,000 a year on each of its 2,800 machines.

If a Tabcorp-operated East Malvern RSL poker machine is only 15% as productive as a Crown Melbourne poker machine, why wasn’t action taken earlier? It’s always been bad business.

Dodgy dealings

When the pokies were finally taken away, there was still an outstanding debt to Tabcorp of almost $200,000 and this is where the pokies-captured RSL Victoria head office came up with a sleight-of-hand that should be investigated.

Courtesy of some earlier land sales of other failed RSL pokie dens, the East Malvern RSL had a tasty $4 million-plus sitting in its Patriotic Funds account. However, under Victorian law, these funds are ring-fenced for veteran welfare spending, similar to the funds raised in the annual poppy appeal.

So what did the gambling-captured RSL cronies do?

Well, with the blessing of head office, the East Malvern RSL made a $500,000 donation to the pokies-dominated Rye RSL sub-branch out of its Patriotic Funds account and then the Rye RSL donated it straight back to East Malvern’s commercial operations.

Hey presto, the Tabcorp pokies debt was paid off and they managed to keep the doors open.

Welfare for Tabcorp

The Rye RSL even had the temerity to claim its $500,000 return donation as “welfare” spending. Welfare for the $9.7 billion company Tabcorp that is, which has a dubious history with the Victorian RSL as The Age’s investigative unit explained on page 1 a few months back.

As Tim Costello has recently argued, there really ought to be a Royal Commission into the gambling industry. A good few days of it could be spent looking at how the gambling industry has exploited the once good name of the RSL, whether by the actions of the Dee Why RSL in Sydney, Tabcorp’s stacking and exploitation of the Victorian RSL or even the way Foxtel expropriates excessive subscription fees from RSL pokie dens across Australia.

Dee Why RSL: pokies, prodigious profits and personal tragedy

This website understands that the East Malvern RSL transactions have caused serious consternation and debate inside the RSL Victoria board room, amongst a variety of other issues which will soon be publicly disclosed.

The Victorian Government is also believed to be seriously concerned about RSL Victoria governance and may be open to legislate for some improvements as has occurred in both NSW and Queensland in recent years.

And speaking of NSW, there is still white-hot anger amongst younger veterans after Malcolm Turnbull’s son-in-law, James Brown, was passed over for the CEO role at RSL NSW, despite doing an excellent job cleaning up old guard corruption as the volunteer President over the previous two years.

Not coming to grips with veteran suicide

Brown is all over the emerging younger veteran suicide issue and tweeted last week that the National President of the RSL, old guard nominee Greg Melick, was “an absolute disgrace” for opposing a Royal Commission into veteran suicide rates.

Younger veterans will be gathering in front of various Parliaments across Australia tomorrow at 11am to observe a minute’s silence on Remembrance Day and re-affirm their support for a Royal Commission into veteran suicide.

It is certainly the disturbing veteran suicide rate which is motivating younger veterans in Victoria to mobilise for a new board to be appointed to RSL Victoria which would be less captured by the pokies lobby, particularly Tabcorp, and more focused on issues such as re-opening the dedicated psychiatric ward for veterans at the Repatriation Hospital in Melbourne.

Licked and loaded: how much are clubs pushing free grog on pokies players?

And why isn’t the Victorian RSL screaming blue murder at the Victorian Government over this issue? Because they are too focused on being Victoria’s second biggest suburban pokies operator after Woolworths, locked in a ruthless joint venture focused on poorer suburbs which amounts to nothing less than state-sponsored abuse.

The younger Victorian veterans have done a forensic analysis of the accounts of the pokies sub-branches and concluded that the only way they have stayed in business has been by selling 20 failed Victorian RSL pokies dens over the past decade and then donating those funds to prop up the 50 remaining RSL pokie dens.

If you’re a small rural RSL with no pokies, don’t expect head office to give you a leg up from pokies-induced asset sales.

Once this ruse was exposed and it become toxic to keep selling off strategic property holdings, the overall RSL Victorian business model started showing signs of extreme financial stress.

For instance, RSL Victoria President Rob Webster has issued instructions for RSL Vasey Care, a 50-50 joint venture with the War Widows Guild, to sell their extensive Victorian veteran accommodation assets.

The intention is believed to be to raise enough funds so that RSL Victoria can come up with the $68 million pokies licence fee payment which the Andrews Labor Government in Victoria is demanding the RSL pay in August 2022.

There was white hot anger amongst Victorian veterans after the reform team exposed this veteran accommodation sell-off plan in September. It has never been denied by the RSL Victoria brass who are now living on borrowed time.

As was outlined in this Crikey story, RSL Victoria ran an appallingly undemocratic AGM in July where the reform team had their first public crack at the old guard.

The 2020 AGM is likely to be the place where significant and long overdue constitutional reform and board changes will be approved by the membership. Watch this space and don’t expect any compromises. There is a firm belief that reform will be best achieved with a complete regime change, not compromise.

Remember this article, when all this comes to pass.

Pokies: the Rise of the Machines

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