The Australian supermarket, retails and consumer services chain Coles has disposed of its poker machines in a move that could be decisive not only for its operations. The step, which Coles took towards the elimination of its hotel and pokies business, has made anti-pokie campaigners once again urge Woolworths to do the same.
In a statement issued today, Coles revealed that it had signed a complicated deal under which it would no longer control its 87 hotels in Queensland. The deal is estimated to a total of AU$200 million. Currently, approximately 3,000 poker machines, also known as pokies, are being operated by the Spirits Hotels business.
There have previously been indications about such a move, as the previous owner of Coles – Wesfarmers – had shared intentions to dispose of its gaming business. The process of gambling assets’ disposal, however, has been complicated due to the novel liquor licensing laws in the state of Queensland, as the ongoing legislation require bottle shop owners to also own a hotel or a pub.
The newly-signed deal would put the Spirits Hotels business in the hands of private equity firm KKRs Australian Venue Co., with Coles given the power to manage and benefit from the revenue generated by Vintage Cellars, 243 Liquorland and First Choice.
Woolworths Majority-Owned ALH Currently the Largest Poker Machine Operator
The deal was commented by the spokesman of the Alliance for Gambling Reform Tim Costello, who praised the supermarket, retails and consumer services chain for the decision, saying that the company had done the right thing to dispose of the controversial poker machines. Mr Costello further shared his hopes that the new owner of the pokies, the Australian Venue Company, would continue the Coles’ campaign regarding the introduction of maximum bets amounting to AU$1.
The spokesman of the Alliance for Gambling Reform also insisted that the other major supermarket chain in the country, Woolworths, needs to follow suit and dispose of the poker machines it owns. Currently, Woolworths is the largest poker machine operator on the territory of Australia. The company owns more than 12,000 pokes operated by the Australian Leisure & Hospitality (ALH) joint venture, in which Woolworths holds a 75% stake.
Previously, both supermarket giants have faced pressure from local anti-pokie campaigners and some shareholders, urging them to dispose of the machines amid increased criticism for the machines.
For the time being, the ALH owns 12,000 poker machines situated in 330 pubs across Australia, which make it the biggest poker machine business in the country. According to estimates, Woolworths received sales amounting to AU$1.6 billion from its hotels and gaming business in 2018. Coles, on the other hand, earned approximately AU$185 million a year from the machines it owns.
As mentioned above, both operators have faced criticism because of the controversial terminals which have been blamed for considerably raising the problem gambling rates in Australia. Last month, Australian gambling regulators revealed their intention to investigate ALH staff because of allegations that the chain’s employees have used free drinks and other enticements to encourage poker machine players to bet continuously on the terminals.