Federal Group, the oldest family-run land-based casino in Australia, is highly dissatisfied with the Tasmanian government’s new plans to end its exclusive licence to operate pokie machines in the region.
The new gambling legislation aims to end the Federal Group’s monopoly by 2023. However, the casino business pushes back because, allegedly, the state hasn’t properly notified them about the changes.
Federal Group opened the country’s first fully legal casino in 1973 at Wrest Point in Sandy Bay’s Hobart suburb. Within a decade, the company launched the Country Club Casino and Resort near Launceston.
For more than half a century, Federal Group has held an exclusive licence to run and operate electronic gaming machines in Tasmania through an agreement with the Crown. However, if the government has its way, the monopoly will likely end on July 1, 2023. At the same time, clubs and pubs will get a chance to obtain licences and operate their own pokie machines.
Should that happen, Federal Group will face a huge loss amounting to $25 million per year.
The Tasmanian Hospitality Association, which has supported the family-owned gambling business for a long time, has welcomed the potential changes with open arms, stating that it would be fair towards other hospitality operators.
On the other hand, the Federal Group has expressed concerns regarding the government’s proposal.
Federal Group Has Its Say Over the New Legislation Draft
The exclusive general manager of the Federal Group, Daniel Hanna, has written the submission to the legislation, which identifies six issues of concern, focusing on when the new policy comes to power.
In the draft, Dr Hanna stated that the government’s proposal is an egregious use of the parliament’s legislative power. According to the company, their 2003 agreement with the Crown includes a Rolling Term, stating that Federal Group must have at least four years’ notice of any changes to the deal.
The Minister can only annul the Rolling Term by providing a formal written notice. However, according to the Federal Group, the government has yet to do so. Therefore, if the new gambling legislation takes place on July 1, 2023, they should have notified the company of the changes by June 30, 2019.
Dr Hanna further states that, since no such notice has arrived, the new end date can be set after June 30, 2026. Furthermore, the draft says that the government has informally indicated the end of the Federal Group’s exclusive licence through public correspondence.
On the other hand, the Tasmanian Government has released a statement saying that, even though the company has been a good corporate citizen, the changes will be implemented by the end of June 2023.
It also states that the Federal Group supported the policy in the election in 2018, which clearly specified that the government would implement the changes by 2023.