The first phase of the anti-MPC campaign was designed to communicate directly with the millions of club members and employees, to advise them of the potential impact of the measure.44 In other words, the clubs were trying to rouse members to engage with the campaign. Clubs Australia and ClubsNSW modelled their grassroots approach on the success of the tactics used by the National Rifle Association (NRA) in the United States, which was famed for its ability to mobilise its membership. In fact, in January 2012 ClubsNSW sent Anthony Ball and another executive, Josh Landis, to the US to attend an NRA seminar on how to use large memberships to bolster grassroots campaigns.45

  At the same time, Clubs Australia and the AHA ramped up their political donations to both major political parties.46 Australian Electoral Commission data shows that in 2010–11 ClubsNSW cited ‘political expenditure’ of $948 000, which jumped to nearly $3.5 million the following year. Similarly, the AHA increased its political expenditure from $216 000 in 2010–11 to $644 000 the following year. In 2011 the Australian Casino Association donated nearly $1 million to political parties, while the Gaming Technologies Association was not far behind with $877 000.47 The gambling industry was demonstrating its ability to erect a wall of money to protect its interests.

  The AHA was already on the warpath in New South Wales over the government’s enforcement of early closing times in hotels in Newcastle in an effort to stop drunken street violence. On its board were several influential political figures. Its CEO in New South Wales, Sally Fielke, was organising one-on-one meetings with senior media representatives in an effort to get them onside.

  At the peak of its powers, the AHA represented 1800 licensed venues. But Harald Muller, owner of the East Sydney Hotel, was not one of them. Having turned his back on the introduction of poker machines, he now dropped his AHA membership. He said that the organisation had become a ‘pokies addict’. ‘It should be called the Australian Pokies Association,’ he commented. He blamed the AHA for ‘spread[ing] the rumour we would all go broke without pokies and now they’re just ripping off working class families’.48

  Gillard’s own beloved AFL club, the Western Bulldogs, accused her government of threatening the club’s future with the introduction of MPC, which its CEO said would reduce the club’s revenue by up to 50 per cent.49 It was a sharp indicator of the extent to which gambling had captured the sport. In the new pro-gambling culture, clearly, club profits came before any responsibility to the wellbeing of club members.

  Wilkie professed to be unworried by the first shots fired across the bow of his reform agenda. ‘They can lobby all the politicians until the cows come home but it won’t mean anything because the decision has been made,’ he said confidently.50 He now says he was ‘a bit old-fashioned’ in thinking that a deal was a deal. Upon reflection, he concedes that he underestimated how easily the industry could spin MPC as a complex and costly impost, and how easily it could be targeted by a power network of politicians, the industry lobby, the football codes, the media and advertising agencies.

  In the midst of phase one of the anti-MPC campaign, researchers undertook a public opinion survey on gambling. Conducted on 27 April and 10 May 2011, it found clear patterns in the public attitudes. Firstly, views about gambling were generally negative, but most people were opposed to prohibition. And secondly, the public supported further restrictions on gambling and especially poker machines.51 In other words, there was strong public support for Gillard to hold the line on MPC.

  Behind closed doors

  While the first phase of the clubs’ campaign was being rolled out, a more sophisticated operation was being organised by James Packer. Packer, of course, had huge interest in the perpetuation of the poker machine business model through his Crown casinos in Melbourne and Perth. Behind the scenes, he’d been lobbying for approval from New South Wales’ Liberal premier, Barry O’Farrell, to construct a second casino in Sydney at the prime Barangaroo site by Sydney Harbour. It was a done deal from the start – a ‘no tender, no community consultation, competition free process’.52

  In reality, Packer had assembled a formidable lobbying machine to ensure that his pet project got across the line. These included former Liberal and Labor heavyweights.53 Although his father, Kerry, was long dead and James had sold off the family media empire, the Packer name still had a mystique: politicians fell over themselves to support the project. So did the head of Tourism Australia, Geoff Dixon, who also just happened to be on the board of Crown. A relentless campaign was waged for Packer to get what he wanted.

  The only political critic in New South Wales was Greens MP John Kaye, whose prescient warning rings louder with the passage of time. He claimed that a mega-casino such as that proposed by Packer would open up New South Wales to more corruption and to more problem gambling. He questioned whether the state government ‘was going to stand up to Packer’ – ‘or will they do what they always do with multi-billionaires and let them have what they want?’54

  Packer knew the answer to Kaye’s question, and so Wilkie had to be stopped. But how? Packer needed a political insider with expert knowledge of the dynamics of power. He found that person in Karl Bitar.

  Few ordinary people had ever heard of Bitar, and he liked it that way. One of the so-called ‘faceless men’ of the ALP, he once said that he’d prefer to be completely nameless as well.55 Always immaculately dressed, softly spoken and polite, Bitar was an exponent of the dark arts of power. Born and raised in Lebanon before his family migrated to Australia, he had been shaped by that country’s violent, factional politics and bitter civil war. It taught him that survival often requires ruthless action.56

  Bitar’s career had been moulded in the brutal culture of the New South Wales ALP, where in 2008 he became state secretary. Adept at pulling the strings of power inside the party, he was once described as ‘a one-man political orchestra’.57 However, his reputation was tarnished in 2010 after he served as director of Gillard’s disastrous election campaign.

  Nevertheless, his appointment by Packer as head of government relations at Crown Resorts was a masterstroke. Bitar had been involved in Labor’s negotiations with Wilkie, and took all that knowledge with him. As an ‘in-house’ lobbyist – that is, one employed by a company – Bitar was not required to be listed on the register of lobbyists. As one commentator explained, Bitar was ‘able to hobnob with former Labor mates … and escape scrutiny’.58 Nick Xenophon was incensed over the appointment: ‘The guy has sensitive information about the government that Crown Casino has effectively just bought.’59 He called for tougher rules governing the post-political careers of politicians.

  Packer, of course, had been working for years to extend his gambling operations in Australia. He wanted to be part of the emerging era of new technology and sports betting to augment his casino operations. In 2006 he’d arranged a private dinner with the then New South Wales Labor premier, Morris Iemma, which led to the government granting a licence in New South Wales to Betfair, in which Packer’s company PBL had an interest.60

  In hiring Bitar, Packer wasn’t looking for someone to open doors; he had his own high-level network. What he was seeking for his campaign to knock off Wilkie’s MPC deal was knowledge of the personalities of the main players, an understanding of Labor’s electoral vulnerabilities and experience in political campaigns.61 Few with knowledge of politics doubted the real purpose of Bitar’s role at Crown.

  Bitar’s move from political to corporate insider mirrored a trend in the revolving door between politics and industry. ABC broadcaster Jonathan Green lamented an unsettling truth that had descended on the political world: it had increasingly become ‘a professional game’ played by people whose allegiance was only to ‘the outcome required by the moment’. It wasn’t, Green said, a place for deeply held convictions.62

  Bitar oversaw the second phase of the anti-MPC campaign: a clinical strike against Labor marginal seat holders, especially in New South Wales. Built around the slogan ‘Won’t Work Will Hurt’, it comprised TV advertisements, direct mailing of residents, rallies and billboards. The latter carried the name of the local member, followed by the question: ‘Why don’t you stand up for our community?’63

  While phase two was unfolding, Packer applied his personal touch to the campaign. A close friend of the Nine Network’s CEO, David Gyngell, the two arranged a meeting with Clubs Australia. While it is not known what occurred at this meeting, soon after, a Nine sports commentator announced during a game that MPC was ‘rubbish policy’. Watching on was independent federal MP Rob Oakeshott, who later explained: ‘I was watching the game thinking, here’s the Sea Eagles against the Broncos, while the panel is tearing into pokies reforms.’ It was another moment that crystalised the growing power of Big Gambling.64

  And there was no bigger gambling powerbroker at the time than James Packer. A stream of Gillard’s top ministers travelled to Melbourne’s Crown Casino for one-on-one briefings with him. At these meetings, Packer reportedly warned ministers that his future investments in Australia would be contingent on ‘an acceptable compromise over the Wilkie demands’. It was the ‘take no prisoners’ approach to power made famous by James’s father, Kerry. Packer was making it clear that he had ‘no intention of going quietly’.65

  The campaign began to squeeze marginal-seat MPs. Labor MPs in seats around the country with sports clubs that relied on revenue from poker machines were being told that if MPC got up, ‘you were history’.66 Unnerved MPs beat a path to Gillard’s office, some unloading their worries on senior staff, some on the prime minister herself. Those that reached the inner sanctum delivered a blunt message to the PM: ‘Tear up the deal or we’re going to vote for Rudd.’67

  At one level, such unease was understandable: few politicians want to get too far ahead of public opinion. However, the broad public view was in favour of reform, raising questions about the Labor Party’s lack of courage to fight causes not thought to be central to its mission of gaining and keeping power. The party, observed journalist Andrew Clark, had become dominated by apparatchiks, ‘a permanent political class whose members morph from Young Labor to advisers to MPs and some to ministers’.68

  Meanwhile, the Gillard government had, according to journalist Ben Eltham, ‘done its best to grit its teeth and ignore the campaign’.69 Two of the key independents supporting Gillard, Tony Windsor and Rob Oakeshott, had also expressed unease about MPC, having been lobbied by their local clubs’ management.

  And former leader Kevin Rudd was a lightning rod for Labor members who were scared about losing their seats over MPC. Rudd was said to be unenthusiastic about the Wilkie reform, and speculation mounted that he was promising troubled backbenchers that the problem would vanish should he be returned to the leadership.70

  Gillard became increasingly aware of the ‘Kevin problem’ and how it was contributing – along with her reversal on the carbon tax and Abbott’s continuing scare campaign about her and her government – to her ‘losing definition in the public mind’, as she later wrote.71

  Wilkie was coming under pressure himself. He had received death threats and an effigy of him was burnt in a country town. Passions were running high when Wilkie received an unsolicited offer from Gillard. In June 2011, according to Wilkie, the prime minister offered him his seat of Denison ‘for keeps’. The offer wasn’t contingent on him dropping his MPC deal, but it was posed as a threat to his career nonetheless. The prime minister’s offer, he said, would be delivered either by him becoming an ALP member or by the party agreeing not to stand a candidate against him. ‘The alternative,’ Wilkie later wrote, ‘clearly, was business as usual – and by implication a tough Labor campaign directed at me come election time.’ Not surprisingly, Wilkie declined.72 But he did offer to moderate his MPC proposal, linking it only to high-intensity machines – the implication being that clubs should install more low-intensity machines as an alternative.

  But the political tide was turning against Wilkie, and the fate of his MPC deal with Gillard was effectively sealed in a grubby political stitch-up engineered in late 2011 by Labor to elevate Liberal Party member Peter Slipper to the position of Speaker of the House of Representatives.

  In November 2011, the existing speaker, the popular Harry Jenkins, announced his resignation, paving the way for the government to appoint Slipper. The move carried a crucial advantage for Gillard’s shaky hold on power, because the speaker does not have a vote on the floor of the House of Representatives. This meant the Liberals lost Slipper’s vote – and therefore that Gillard didn’t need Wilkie’s vote quite as much as before. Wilkie believes that this was Labor’s plan all along, and that the appointment signalled Labor’s intention to dump the proposed reform.73

  Exactly when Gillard felt in a sufficiently strong position to ditch her deal with Wilkie is not clear, but in January 2012 she travelled to Tasmania to talk with him about the state of MPC. By this time she was finding Wilkie difficult, and felt her style and approach weren’t working with him. She found him ‘an odd character’ and too single-minded. According to her account, ‘Andrew is bluntly all about deals’ – as if somehow she wasn’t.74

  During lengthy discussions, Gillard informed Wilkie that the deal was off: the numbers weren’t there, either inside her own party or with the independents. She wasn’t, she said, prepared to bring on a vote, as ‘a lost vote would inevitably trigger debate about the government’s survival’.75 Wilkie says the meeting was tense but not unpleasant. He thinks, although he has no firm evidence, that Gillard was worried she’d lose the leadership of the party if she continued to pursue the reform. Even though Wilkie had suspected this change was coming, it still shocked him to learn that MPC was being jettisoned in favour of a limp and almost certainly ineffective voluntary scheme.

  A week later, Wilkie held a press conference announcing that his support of the government was over. ‘I was tough on Julia for not honouring the deal,’ he now acknowledges.76 ‘I was critical of her.’ He saw the bigger forces at work – that ‘broken promises and backroom deals do trash our democracy’. Later that day his phone rang: it was Anthony Albanese, the government’s manager of business in the House of Representatives. He was calling to tell Wilkie that ‘he’d never seen Julia Gillard so white hot angry’ – both over Wilkie’s withdrawal of support and over his criticising the prime minister so personally. It was if machine politicians like Gillard and Albanese couldn’t understand that an independent like Wilkie would remain committed to his word.

  The government’s backdown on MPC met with stinging criticism. Nearly everyone, wrote journalist Ben Eltham, agreed with Tony Abbott’s assessment that cancelling the deal was a ‘betrayal of Wilkie’.77 And, of course, the backdown fed straight into Abbott’s weaponisation of Gillard’s character, his mantra that she was slippery and untrustworthy. Bad policy had suddenly become bad politics.

  The demise of MPC represented, Eltham argued, another victory ‘for the power of big marketing at the expense of democracy’, and preserved the power of casinos, big clubs and gaming companies ‘to fleece ordinary Australians of billions each year’.78

  Mike Steketee, writing in The Weekend Australian, was equally scathing, concentrating his analysis on Gillard’s failure of leadership. The prime minister, he argued, should have shown leadership on the issue by campaigning for reform, confident that she had widespread public support: ‘She could have highlighted the devastation caused by problem gambling … she could have decried the fact that poorer communities suffer the most.’79

  Not bringing the MPC reform to a vote in the House of Representatives was about preserving Labor’s power. Wilkie maintained to the end that there was a possibility that independents would change their mind if the proposal for MPC came to a vote. But realpolitik won out.

  Reflecting on the defeat 13 years later, Wilkie sees at least one positive: the publicity surrounding MPC thrust problem gambling into the spotlight of national politics, where it has stayed ever since. Calls for reform have never gone away, even though the prospect of reform at the national level has seemed ‘too hard, too toxic and too controversial’.80

  When Gillard announced her gambling reform package in January 2012, its centrepiece was a trial of MPC in the Australian Capital Territory, along with a requirement for new poker machines to have the capability for pre-commitment – but there was no suggestion of mandating the scheme. At much the same time, an Essential Poll found that 62 per cent of the public was in favour of a mandatory regime.81 The cave-in on MPC handed the gambling industry an easy victory, without the issue even becoming a campaign issue at an election.

  Yet even Gillard’s limited reform was abolished when Tony Abbott’s Coalition defeated Labor at the September 2013 federal election.

  The new world of online gambling

  In 2010, a young and brash Tom Waterhouse, the son of renowned horse trainer Gai Smith and controversial bookie Robbie Waterhouse – who themselves were from famous Sydney racing dynasties – seized the emerging opportunities of online sports betting and created TomWaterhouse.com. Oozing charm and blessed with a polished manner, accentuated by pearly white teeth, Tom had begun to build a reputation as a bookie prepared to take bigger bets than the established players when he started trackside in 2008. He’d enjoyed a head start in the industry courtesy of the share of a $100-million inheritance from his maternal grandfather, the legendary trainer Tommy Smith.82

  When Waterhouse established his online gambling business, he built it around his personal brand. He became Sydney’s ‘everywhere man’, with TV ads and billboard images of himself popping up all over town. He was spending $20 million a year on advertising.83 As Waterhouse himself noted, ‘The softly softly approach no longer pays off in the sports betting industry.’84