No one really knows how the deal happened, and it has never been officially investigated. Former Tasmanian Liberal opposition leader Bob Cheek smelled a rat. He believes that, behind closed doors, Groom caved into a threat made by Farrell to downsize his operations if he wasn’t granted the monopoly licence.23 Others believe that it was just one of those terrible Tasmanian stories involving crony capitalism.24 For his part, Groom might have seen the advantage of getting the Federal Group onside politically, and the government believed that it had prised from Farrell an agreement to undertake $25 million of investment in the state. However, this part of the agreement was so lacking in detail that Federal could have spent nothing and still complied.25

  The Farrell family had for decades proved adept at managing the politics of Tasmania’s sleazy political system, but it now had a huge incentive to protect its rivers of gold and the opulent lifestyle its members enjoyed.

  The world’s pokies capital

  When Labor’s Bob Carr became premier of New South Wales in April 1995, poker machines were restricted to clubs – 70 000 of them spread throughout the state. Carr, a former journalist with a broad, progressive interest in a range of policies, along with an acute ear for the public mood, took the decision in 1997 to release 30 000 additional poker machines into pubs and hotels, earning his state the shocking reputation of having more poker machines per capita than anywhere else in the world.26 It seemed a strange decision for a politician known for being a wonk – someone capable of seeing the consequences of his policies.

  Carr later described his decision as ‘a bargain with the devil’; he said he was ‘not an enthusiast’ for it, even though he expressed no regrets.27 So why did he approve the rollout of tens of thousands of additional poker machines? Nearly all of them went into the lower-socioeconomic suburbs of Sydney and regional areas of New South Wales, which were already saturated with the devices in clubs.

  Carr justified the decision as a way of reviving the hotel sector; before pokies came along, he said, 400 hotels were going broke. After the availability of pokies, ‘we now have a vibrant hotel sector’.28 But this sounds more like rationalisation than explanation. Where was the review into the hotel sector? Or a study of the likely impacts of releasing a tsunami of poker machines into local communities?

  The rise of the clubs movement, on the back of poker machine money, had left New South Wales pubs at a financial disadvantage. And clearly they wanted a piece of the action. As hotel broker Greg Smith explained in banal understatement, the simple economics of the industry meant that ‘hotels with poker machines have got a better bottom line’.

  In the early to mid 1990s, the state Labor Party forged a tight relationship with the Australian Hotels Association (AHA). On parliamentary sitting days, CEO Brian Ross and president John Thorpe visited parliament privately, schmoozing with ministers and senior staffers. The organisation kept Labor MPs’ offices topped up with all manner of booze and ferried supplies to party fundraising events.29

  Carr maintained close relations with the hotel industry. As Ben English observed in Sydney’s Daily Telegraph:

  Almost every week the Premier can be seen rubbing shoulders with prominent publicans at one ALP fundraiser or another. According to the AHA’s John Thorpe, the NSW branch of the ALP pushes publicans to support its cause either by supplying grog for functions or through straight cash donations.

  According to English, it was hard for the Carr government to ignore the potential revenue that would flow if it extended pokies into pubs and hotels. For that reason, he had ‘overseen and participated in a deepening union between publicans, the ALP and, by extension, his Government’.30 Kevin Bissett, writing in the Daily Telegraph, was clear about what happened. Hotel owners won Carr over ‘after arguably the most canny lobbying effort in Australian history’.31

  John Thrope admitted in the press that it had been vital to ‘swing the pollies around’ and that ‘democracy isn’t cheap’. He justified lobbying the government because the industry was a significant employer, and he claimed that many hoteliers had hit hard times.32

  Journalist and shareholder activist Stephen Mayne noticed the intensification of a trend in politics around the time Carr made his decision on pokies: that New South Wales Labor’s fundraising machine ‘pumps things like the gambling industry for every party dollar it can get’, such that ‘the flow of money and power in this state is one of the unwritten stories’.33

  Carr’s pokies deal was widely criticised. Lobbying and political donations were becoming an entrenched part of the political system, resulting in decision-making across all levels of government becoming increasingly opaque. Nevertheless, Labor’s association with the hotel industry paid off handsomely for NSW Labor. The hotel industry became a generous financial benefactor to the party: in 2003, it received $1.6 million in donations from the sector, five times the amount it donated to the Liberals.34 Sydney’s top 25 hotels were making $220 000 per poker machine per year. That information only emerged because it was leaked to the press.35

  When the Goss Labor government had introduced poker machines into Queensland in 1990, it overturned the stern opposition to the devices taken by a succession of National Party leaders. Goss represented generational and political change in the deeply conservative state. But the new premier found himself walking a tightrope during his first term about the extent of reform he was prepared to undertake. As Andrew Stewart from The Canberra Times noted, the government wanted to be seen as reforming but not on controversial issues such as homosexuality or abortion. ‘It would prefer to establish the image of reform as introducing poker machines and making the railways run on time,’ he observed.36 Pokies legalisation in Queensland was simply part of a political strategy. And the government dampened any outcry by committing to divert millions of dollars from pokies tax revenue to sporting groups.

  Western Australia continued to be the holdout state. There, pokies were confined to the Burswood Casino; as a consequence, the social harm caused by the machines was said to be about one-third of that in the other states.37

  Changes wrought by expanding poker machines

  Along the mostly affluent coastal towns of south-east Queensland, surf lifesaving clubs stand as a testimony to the spirit and benefits of volunteerism. Beaches are kept safe and young children – known in the sport as ‘nippers’ – are trained in water safety. But there’s a parallel story to the wholesome image of surf lifesaving: the clubs are packed with poker machines. According to one local critic, a powerful assemblage of property developers and hotel and gambling business owners with high-level lobbying power on both sides of politics has delivered over 1000 poker machines to surf clubs, where they have caused ‘untold damage’.38 Quite apart from damaging the positive image of surf lifesaving, the machines normalise problem gambling for the many kids who are present at the clubs.

  The saturation of pokies in surf clubs was an exception to the general rule that it was the most disadvantaged communities that had the highest density of gambling machines. People with the least to spend were more regularly enticed to spend money they didn’t have. This amounted to ‘socio-economic banditry’, according to gambling researcher James Doughney.39

  He explained that no equality of risk lay behind such a massive expansion of poker machines in low-income areas: the companies owning the machines were guaranteed high profits and governments would receive a guaranteed tax take, whereas the taxes were regressive, hitting those less well off the hardest.40 And it was Labor state governments that were at the forefront of this exploitation of the working-class voters it supposedly represented.

  Despite the devastating effects, the number of players kept rising. Distinct markets emerged. Pubs produced a new breed of gambler, identified as a young, blue-collar tradie ‘whose local watering hole has been transformed into a mini gambling palace’. Such young men would traditionally knock off and head to their local pub for a beer and, perhaps, to put a bet on at the TAB. Now that also included a bet on the poker machines. According to hotel consultant Graeme Campbell, pubs and hotels became another segment of the gambling market because of the easy access poker machines provided. It was a ‘total revolution’ for the business model of hotels because young tradies ‘go into the public bar, they see the machines and all of a sudden there’s $50 or $100 dollars gone into the machines’, he said.41

  Len Ainsworth, the billionaire owner of Aristocrat Leisure, understood the appeal of pokies in pubs. Young tradies could walk in off the street in their work gear and enjoy an informal atmosphere while also having a bet. And pubs were everywhere.42

  Another factor was the increasing intensity of the way the machines operated. Len Ainsworth continued to develop more attractive and, according to critics, more addictive games. In 2001 the 78-year-old unveiled the Ambassador, which he called the ‘next generation’ of poker machine. The product of two years’ work, the machine featured a double-sized screen, 3D graphics and an electronic scoreboard. The Ambassador hosted multiple games that could be accessed with the switch of a computer chip. In addition, a larger number of lines could be played simultaneously, heightening both visual stimulation and the addictive nature of the machines, resulting in potentially larger losses amid the occasional win.

  Aristocrat Leisure reportedly employed more than a dozen psychologists, whose jobs were to design machines that would entice people to play and keep playing, while making as much money as possible for the owners.43 New electronic gaming machines had to conform with legislated technical standards, but in Australia this process was outsourced to licensed private agencies, which simply certified the games as compliant. As Charles Livingstone has written, the next-generation games ‘far exceed the revenue performance, and addictive harm-inducing potential, of older, mechanical poker machines’.44

  But there was no doubting that Ainsworth was the king of the pokies, and his new whiz-bang poker machine upheld Australia’s reputation as a world leader in gambling technology.45 An industry commentator, writing in industry magazine Casino International, observed that Aristocrat’s machines were ‘as sophisticated as slot machines get’.46

  Yet even as its profits continued to rise, Aristocrat continued to deny the addictive nature of its machines.

  The lure of pokies

  Governments had known for some time that there was a link between lower socioeconomic status and gambling. A report to the New South Wales government in 1998 found:

  Some of the more common reasons or objectives for participating in gambling include: a way of passing time in a pleasant social environment; a form of entertainment or an escape from reality; the chance of achieving the dream of financial security. Money lost in gaming is usually justified as the price paid for attempting to meet the objectives.47

  As we have seen, this didn’t stop governments allowing poorer suburbs to be flooded with pokies. By 2022, the total amount gambled on pokies in New South Wales reached $7 billion, up from $5 billion in 2011.48 Charles Livingstone estimates that one-third of people who play pokies once a week will develop a gambling problem.49

  Problem gambling in western Sydney has been described as ‘a silent epidemic.’50 In 2014, Fairfield City Council told a federal parliamentary inquiry into the impact of gambling advertising of the damage pokies were causing to its residents. At the time, Fairfield was the fourth-most disadvantaged local government area in New South Wales. It experienced high levels of disadvantage, poverty, disability, unemployment, housing stress and poor health outcomes. It also had high numbers of refugees.

  Fairfield residents had access to nearly 4000 poker machines – one for every 54 people51 – which generated a yearly net profit of nearly $400 million. As the council said in its submission: ‘Vulnerabilities to problem gambling include lack of familiarisation with gaming, torture and trauma, boredom, immersion in a culture that views gambling as “normal”, and the need for money (chasing the dream).’52 One former Fairfield resident told the press that the area was ‘ground zero’ of ‘predatory gambling’ in New South Wales.53

  In Victoria, Greater Dandenong bore the brunt of the inequities over poker machines. In 2010–11, the average weekly income in the area was $426, while annual pokies losses were $1110 per adult. In wealthier Boroondara, where the average weekly income was $836 per week, average annual pokies losses were $153 per adult.54 In Dandenong, there’s one poker machine for every 112 adults.55

  In Tasmania’s lower-income suburbs, social damage from poker machines was rife. Jeff Milkins, captain of the Salvation Army in the Hobart suburb of Glenorchy – where there was one poker machine for every 128 adults56 – sums up the injustice around poker machines: ‘It’s in the poorer areas where people need hope, and the lure of winning sucks them in [to poker machines].’ Glenorchy housed the ‘golden mile’ of poker machine hotels, with six in close proximity – almost as if a version of Las Vegas had been plonked into the middle of a town of ordinary working people.

  A 2017 parliamentary inquiry into gambling in Tasmania concurred with Milkins’ assessment. The committee heard evidence of the strong opposition to the proliferation of poker machines in lower socio-economic suburbs.57 Anglicare Social Action and Research Centre manager Meg Webb told the committee that residents wanted fewer poker machines, ‘or they want them removed entirely’.58

  Children often suffer when they live with a problem gambler parent or parents. The harms can range from child abuse, family breakdown, psychological and emotional stress, safety issues from being left unattended, and disruptions to education. One woman in her 30s recalled of her childhood:

  And [my father] knew that I had that money somewhere in the house. And he came back from evidently being at the pub one day. And I remember him threatening to punch my head in if I didn’t give him the money for that, so then he could then go and put it into a poker machine.

  Another adult woman recalled:

  My parents were massive gamblers and often away every night. They’d leave us home with our elder sister, I would have been about six when that realization come in. That would have been my earliest memory of being home alone, or there’d be times where Mum and Dad would drop us off at the local pool, which wasn’t far from [the gambling venue]. We’d be there for hours after the pool shut waiting for Mum and Dad to come and pick us up.59

  Not surprisingly, Federal Hotels saw the impact of poker machines differently. ‘Federal Group’, the company stated to the Tasmanian parliamentary inquiry, ‘has helped to deliver a well-managed gaming industry with high levels of compliance and player protection’. It was almost as if the company existed on another planet.

  No doubt most poker machine players kept their gambling in check. Nevertheless, flooding pubs and hotels with pokies while knowing about their addictive capacities does, indeed, look like socioeconomic banditry – especially given the obscene profits that have been handed over to the wealthy.

  The unstoppable wealth machine

  The opportunities for wealth creation through pokies have been simply enormous. Each year Australians slide $13 billion into the slots of poker machines.60 Billionaires have been created, with the money transferred ‘from the pay packets of the working class to the bank accounts of the super rich’, as two researchers noted in 2014.61 And there was no bigger beneficiary than pokies mogul Len Ainsworth.

  After dodging the gelignite attack on his factory in 1954, Ainsworth built a $3-billion national and international pokies empire, which he controlled with an iron fist.62 As poker machines were rolling out in suburban Australia in the 1990s, Ainsworth would chalk up the manufacture of 400 000 machines, which he exported to over 100 countries.63 By the end of the decade, he was listed in the top ten wealthiest Australian businessmen. And as the rollout of pokies in Australia continued, he become even richer.

  But Ainsworth remained an enigma. A workaholic, he didn’t seem to be especially indulgent about the enormous personal fortune he had accumulated, apart from his passion for expensive cars. And his life was a roller-coaster, with much of the ups and downs self-inflicted.

  He’d spent much of the 1980s and ’90s consumed in a bitter legal battle with New South Wales police. In 1981 police had charged Ainsworth with conspiring to gain a monopoly of the pokies industry by dishonest means. Police alleged that he had funded an organisation called the Australian Club Development Association, which had made disguised payments to politicians and political organisations across Australia. Behind the charges were claims of kickbacks and criminal links.64 Notably, police alleged that Ainsworth had business dealings with an American named Lou Wilner, who was also in the pokies business but had a conviction for illegal gambling and was generally considered a person of ill-repute.

  Ainsworth rejected both charges. He insisted that the payments to politicians were legitimate lobbying and that his connections to Wilner were minor and a mistake. Police eventually dropped the charges, but Ainsworth didn’t let the matter rest there: he commenced a blizzard of defamation litigation that ran for 15 years and cost an estimated $20 million.65 Along the way, he achieved undisclosed settlements against three police officers, but he continued his actions against US authorities and a private detective.

  In 2001 the New South Wales Licensing Court found Ainsworth a fit and proper person to hold a poker machine licence, dismissing the police case against him. In retrospect, it all seemed like a case of wealth and power run amok.

  However, behind the Ainsworth family’s vast wealth lay the uncomfortable reality about the damage Aristocrat Leisure’s poker machines have caused. The family, along with the company’s directors and shareholders, had insulated themselves from this reality. Since its public listing in 1996, Aristocrat’s annual general meetings had been quiet affairs, and no one had ever turned up to argue about problem gambling. That changed in 2020.