Wilkie’s whistleblower was deeply affected by what he had observed of ALH’s behaviour. In a statement to Wilkie, he said: ‘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 sometimes wet themselves. It’s not right, how can that be right?’

  Patrons at ALH venues had been tricked into thinking that when staff were engaging them in general chitchat they were simply being friendly, when in fact they were profiling them with a view to exploiting them. Wilkie slammed the behaviour as immoral and possibly illegal.99

  Both Woolworths’ chairman, Gordon Cairns, and AHL’s chairman, Roger Corbett, expressed outrage at the revelations. They knew nothing about these practices, they said.100

  As for urinating while playing poker machines, this is a recognised phenomenon, referred to by gambling researchers as ‘extreme unawareness’.101 A woman calling herself ‘Rachel’ told ABC News in 2020 that when she started working as a poker machine room attendant, she didn’t realise she’d be mopping up urine as part of her job.

  There’s one woman who comes into the club and sits on one machine all day. She will have a couple of drinks and she won’t give up the machine. I’ve seen her wee herself all over the chair instead of giving up that machine and going to the toilet. When it happens, the twenty-something worker put on some gloves, grabbed some wipes and a mop and bucket and got to work.

  But no action was taken to help such people. ‘No one at work will ever approach anyone about problem gambling. We are told not to,’ Rachel said.102

  The situation became even worse for Woolworths and ALH. On the back of Wilkie’s revelations, the New South Wales gambling regulator, Liquor and Gaming NSW, investigated ALH for potential malpractice. And another whistleblower came forward. Emma Pearson, a former gaming room attendant at an ALH-owned hotel, told the investigation that, in contravention of the law, hotel management issued instructions to hand out free drinks to people playing poker machines to keep them gambling longer. ‘They’d tell the staff to do the same, and that was right up the line – manager and staff, supervisors, everyone,’ she said. The malpractice was occurring across 50 of the company’s hotels.

  Pearson claimed that staff at a western Sydney ALH hotel she worked at were taught to cover up the practice of providing free drinks to gamblers by putting them through the till at the main bar rather than in the gaming room: ‘We were told don’t put that through the gaming computer so if we get audited or get checked, it won’t come up on that till.’103

  On the back of its scandals over poker machines, Woolworths faced an activist campaign – led by GetUp, the high-profile online group – to force it to divest its gambling interests. Twisting the company’s promo as ‘the Fresh Food People’, GetUp renamed Woolies ‘the Pokies People’.

  As Woolworths faced the blowtorch of public anger, in March 2019 Coles decided to throw in the towel on pokies. Andrew Wilkie issued a press release congratulating Coles and called on its competitor to do the same. Using evocative language, Wilkie called on Woolworths to ‘give up its blood money’.104

  Coles divested itself of pokies because, although it was knee-deep in the industry, it had been more troubled by its association with the devices. It earned less than $200 million a year from pokies. In 2016 Richard Goyder wanted to a pursue harm-prevention modifications to poker machines. Coles asked five pokies manufacturers, including Aristocrat Leisure, for help in trying out games with a maximum bet of $1. The move caused a fierce backlash from within the gambling industry. Aristocrat and the other manufacturers flatly refused to manufacture $1 bet games. Woolworths rejected the move outright, while ClubsNSW – the ‘peak organisation for gambling and hospitality venues in the state’ – lobbied hard against the any proposed change. Goyder threatened to split from the gambling industry altogether if Coles didn’t get its way.105

  What was motivating Coles to break with Big Gambling? In mid 2014 Goyder had met with Tim Costello at a private dinner and had promised to tackle problem gambling. But Costello discovered that the Coles chief had encountered, to his frustration, the political power of Big Gambling to stymie any reforms. Hence, Goyder pushed for the gambling industry to endorse $1 games but found no support.106 However principled Goyder’s aim was, it was directed at harm minimisation, and not, at this point, at divestment from poker machines.

  Coles had inadvertently sparked a debate on corporate responsibility versus shareholder returns, especially when poker machines were involved. It took a further two years for Coles to exit the pokies business altogether.

  Banking on profits

  The big supermarket chains might have been called out over their involvement in poker machines, but they were not the only ‘socially responsible’ corporations under scrutiny. The ‘Big Four’ banks – Commonwealth, ANZ, Westpac and NAB – funded the hotel empires of the pokies barons to the tune of $4 billion. The banks had unrestricted access through ATMs to gambling venues, and until the early 2000s they had permitted the use of their credit cards to facilitate gambling. The banks had simply abandoned due diligence in the process – as the 2001 case of Simon Famularo showed.

  When he discovered he could get cash on his credit card at his local hotel, Famularo withdrew $2250 and blew the lot on poker machines and the pub TAB. Over the next eight months, he lost $67 000 in cash advances he obtained on his American Express Gold Card and $91 000 in EFTPOS withdrawals, gambling in the Las Vegas Lounge at O’Malley’s Hotel in Kings Cross, Sydney.107

  In 2023 state and territory governments banned banks from allowing their customers to use their credit cards for direct gambling debits, although a loophole was left with online gambling, which the banks continued to exploit. And even after the ban, banks still offered known problem gamblers multiple credit cards and/or extensions to their credit limits.

  This is what happened to David Harris, a 30-year-old roofer who started gambling with funds from his credit card in early 2015 and quickly reached his $10 000 limit, before he was given a second and then a third credit card by the Commonwealth Bank. It boosted his credit card limit by thousands of dollars, adding to his existing debt of more than $27 000, just days after he told the bank he had a problem gambling habit.

  Harris took his case to the 2018 Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, telling Commissioner Haynes: ‘I explained that clearly I am a gambler, I have a gambling problem. I can’t understand why they kept offering me more money.’ He kept using more credit, Harris said, because he was panicking and ‘the only way out’ he could see was to win enough by gambling to pay the debt off.108

  Harris wasn’t to know the extent of the collapse of ethical standards across the Australian banking sector, which had led a reluctant Liberal federal government to establish the inquiry on the back of public outrage over the banks’ behaviour.

  Commissioner Haynes found that the Commonwealth Bank was neither working on nor planned to work on its lack of systems, which had failed to protect Harris, even though, under the Banking Code of Conduct, they were required to act with due diligence when offering credit cards to customers. The bank could tell from Harris’s transactions where he was spending his money. As Haynes wrote in his Interim Report:

  Mr Harris gave evidence that ‘two of the hardest things you can do when you are suffering from an addiction is, one, admit you have a problem and, two, reach out for help, and in the phone call with Commonwealth, I tried to do both … I tried to reach out for help and I didn’t get any. I got the opposite.’ CBA’s systems and processes, as they stood at the time of the hearings, were not equipped to adequately deal with people in situations such as Mr Harris’s, even when they explicitly sought assistance from CBA.109

  Haynes used Harris’s story as a test case about the banking industry’s involvement in gambling. As in so many other areas of its treatment of customers, the banks didn’t care – profits came first.

  Superannuation funds – even those that claimed to be ethically managed – also fuelled the gambling industry and especially the poker machines sector. Aristocrat Leisure was a darling of the stock exchange. The superannuation fund HESTA, which promotes itself as ‘investing in and for people who make our world better’, holds more than $351 million in gambling equities. By 2022 the funds had a combined $4.2 billion of workers’ funds invested in the industry.110

  And the reason, of course, that corporate Australia continued to exploit the opportunities presented by Australia’s massive gambling industry is the failure of governments to rein in the industry and curb its obscene profits.

  We must now step back and see how the first concerted effort to reform Australia’s gambling industry fell apart.

  7 THE DEATH OF GAMBLING REFORM

  Disappointment was etched onto Prime Minister Julia Gillard’s face as she and her partner, Tim Mathieson, departed the stage after an election night event on 21 August 2010. Gillard, who had controversially replaced Kevin Rudd as prime minister in a ‘bloodless coup’ eight weeks earlier, had failed to secure a majority of seats to form government. Labor’s campaign had been dogged by infighting and leaks against her.

  On election night, Gillard appeared to carry the weight of the party’s recent dysfunctional culture on her shoulders. Labor had been traumatised and deeply divided over the leadership struggle between her and Rudd.1 Leaving the function as a caretaker prime minister, Gillard offered only a hesitant wave and a stifled smile to the party faithful. Uncertainty reigned over the following days as she appealed to the four elected independents and the first Greens member of the House of Representatives to support her to form a government.

  Even as Gillard began these negotiations, the clouds of a political storm were gathering. While three of the independents dragged their feet in deciding whether to support the government, one seized his chance. On 2 September, Andrew Wilkie, a former army officer, intelligence analyst and whistleblower on the Iraq War, and the newly elected independent member for the Tasmanian seat of Denison (later renamed Clark), announced that he’d done a deal with Gillard.

  The prime minister had rung Wilkie to congratulate him on his victory at 9 pm on the night of the election, establishing a connection. Two days later he was on a plane to Canberra for talks. They came to an agreement: he would give her government support in return for gambling reform, the central feature of which was mandatory precommitment – known as MPC – for poker machine players. This would allow them to set limits on their losses before beginning to gamble, and so had the potential to be a groundbreaking reform. Gillard agreed.

  Gambling reform advocates were cock-a-hoop at the unexpected emergence of the issue, but the deal incensed the gambling industry. It had been given no notice and now went on the warpath to destroy the introduction of MPC. This shouldn’t have surprised anyone: vast profits were threatened and powerful players were aggrieved.

  Sixteen months later, MPC lay dead in the water like a duck shot out of the sky. Critics decried Gillard for betraying her deal with Wilkie. She said it just couldn’t be delivered – politics was about having the numbers, and this reform didn’t. In the ashes of the broken deal, Wilkie and Gillard were equally critical of each other. Where the truth lay became lost in the fog of recriminations and the media’s fixation on Gillard’s fragile hold on power.

  The debate over gambling reform during Gillard’s stormy term in office says much about the state of Australian democracy. Norms were being eroded. Powerful vested interests were exerting ever more influence over the political system, fraying the public interest. A troubling question emerged: was it even possible to reign in Big Gambling?

  Wilkie’s reform agenda

  What attracted Andrew Wilkie to championing the issue of problem gambling? He describes his interest as an evolving process. Initially it was intellectual: he’d studied the data on gambling, which told him that a significant policy area causing great harm was being ignored by governments. But as soon as he began speaking on the issue, he became a lightning rod for people to tell him their stories of the harm gambling was doing to them and/or their families. ‘As I looked these people in the eye and heard their stories,’ he explains, ‘I became emotionally involved. I was shocked by the personal toll on people.’2

  Poker machine reform became a front-and-centre issue in Wilkie’s campaign for Denison. He came up with an ingenious way to promote the issue: a two-metre-long, rectangular electronic counter, fixed to the roof of his van, which continuously tabulated the eye-watering poker machine losses in Tasmania. The device ‘became the talking point around town’, Wilkie explains. All of a sudden his identity in the public mind as a national security expert evaporated. He became simply ‘the pokies guy’. Both the issue and the device were instrumental in his victory.3

  Having negotiated the deal with Gillard, Wilkie was thrust to the forefront of the public debate over gambling. In February 2011 he was appointed as the chair of a Joint Parliamentary Select Committee on Gambling Reform, following a motion from Senator Nick Xenophon to establish the inquiry. Over the next two years, the select committee produced three reports covering the design and implementation of an MPC system; interactive and online gambling and gambling advertising; and prevention and treatment of problem gambling. Wilkie had made the issue his own. It was an extraordinary example of the opportunities provided to independents when governments don’t have control over the numbers in parliament.

  Initially, Wilkie had taken two proposals to Gillard: mandatory pre-commitment and maximum $1 bets for poker machine players. Both had been endorsed by the federal government’s Productivity Commission in reports in 1999 and 2010. However, in an early indicator of the power he was up against, Gillard’s office quickly told Wilkie that the $1 bet option was off the table. Charles Livingstone suspects that the clubs industry’s twin peak bodies – Clubs Australia and ClubsNSW – got straight into the prime minister’s ear. ‘One-dollar bets would have been much harder to knock off and much simpler to introduce,’ said Livingstone. ‘Most people understand it. Whereas pre-commitment already had a hundred moving parts.’4

  But there was an even more powerful voice at work. Years later, Wilkie happened to be in conversation with James Packer, who related the following account: Gillard had rung him to gauge his views on the two proposals. Packer told the prime minister that $1 maximum bets was ‘the worst-case scenario for him’. It was immediately taken off the table,5 although Gillard may have had her own reasons for doing so. Wilkie then went with MPC as the key plank of his deal with the prime minister.

  MPC and problem gambling

  By the time Wilkie signed his deal with Gillard, problem gambling had become endemic and poker machines were fuelling addiction in local communities. Wilkie’s committee found that 600 000 Australians played weekly, and that 15 per cent of this group were problem gamblers who generated $5 billion a year in loses, up from an estimated $3.5 billion in 1999.6 In some areas there was a poker machine venue almost on every street corner.

  We have already explored how Aristocrat Leisure’s poker machines were the most sophisticated and innovative in the world. Over time, the company had had a few smaller Australian-based competitors that came and went, but Ainsworth ended up competing against the company he founded. In 1994, following a cancer scare, he stepped aside and handed his stake in Aristocrat Leisure to his seven sons, and the following year he established a separate company, Ainsworth Game Technology.

  The two companies manufactured the riskiest machines, known as ‘high-intensity poker machines’ as they were programmed for large bets, fast games and the lure of big jackpots. This meant players could lose a lot of money in a short space of time – over $1200 per hour in some cases.7 In comparable countries like Britain, players tended to lose only $30 or $40 per hour.8 In Australia it was not unusual for a problem gambler to lose $400 in ten minutes.9 And the lure of big jackpots was a mirage. Jackpots on low-intensity machines – that is, machines that require less money to bet – are paid out more frequently but in smaller amounts. The reverse is the case for high-intensity machines: big jackpots are rare. Overall, industry critics claim, less than 1 per cent of winnings are paid out in jackpots.10 As Wilkie’s committee declared, Australia’s high-intensity pokies ‘are no longer a harmless recreation’.

  Pokies players knew as much, and dozens gave confronting evidence to Wilkie’s committee. ‘Gabriela’ explained just how mysterious the descent into addiction could be, and how torturous the path out. Fighting addiction for four years, she’d sought professional help from counsellors, psychotherapists and hypnotherapists as she strove to understand the origins of her addiction. Gabriela had relived her childhood experiences, analysed her feelings towards her parents and discovered hidden self-esteem problems. Although none of that stopped her gambling habit, she said, ‘I was able to collect a few excuses as to why I couldn’t’. She started attending Gambling Anonymous meetings. ‘I’ve met a lot of people who, on a sliding scale of misery, surpassed me by miles … While I was desperate to find a solution, I still managed to push our family savings through a slot, I almost lost my marriage, two jobs and more than once I contemplated suicide.’11

  Not surprisingly, the gambling industry remained in wilful denial about problem gambling. One industry leader posed his own question and answer to the Productivity Commission’s 1999 hearings: ‘Do problem gamblers exist? I am yet to be convinced of this; however, I fully acknowledge that there are people with problems who gamble.’12 His condescension was a slap in the face to people like Gabriela. And the gambling industry never backed away from the misinformation it peddled that problem gambling represented ‘a very small minority of people’.13