The oldest family-run casino business in Australia has shared its disagreement with plans that will put its exclusive operating licence in the state of Tasmania to an end within 2 years, claiming that it has not been properly notified of the changes by the state government. The operator also claims that the Tasmanian Government has been forcing them into actions that it found to be “highly inappropriate”.
According to the Federal Group’s submission to the Future Gaming Markets draft legislation, the earliest date for the casino gambling business to start its new gaming arrangements is July 1st, 2026. Reportedly, overruling it would create “a sovereign risk”.
Reportedly, the move is likely to create tension within the gambling sector from a company that has long been operating in the state.
Federal Group opened the first legal casino at Wrest Point in 1973 and less than ten years later it developed the Country Club Casino and Resort situated in close proximity to Launceston. For almost 50 years it has been holding an excluding operating licence for electronic gaming machines (EGMs) in the state of Tasmania. However, the local Liberal Government has decided to take measures against the monopoly and to officially end in on July 1st, 2023. Under the change, clubs and pubs in Tasmania will be offered legal permits allowing them to operate poker machines, or pokies, as the machines are also commonly known.
Federal Group to Lose About AU$25 Million a Year Due to the Draft Legislation Changes
The aforementioned draft legislation was released in July. Under its provisions, Federal Group is expected to lose approximately AU$25 million on an annual basis.
However, regardless of the unfortunate projection, the company’s statement at the time when the draft legislation was officially rolled out was rather bland. Federal Group shared that it would undertake a thorough review of the draft legislation and since then has kept a low profile, with no public announcement on the matter. However, things may be different behind the scenes.
The family casino and gambling business has been historically supported by the Tasmania Hospitality Association (THA) but the latter has welcomed the proposed amendments, claiming that the draft would establish a fairer model for hospitality operators. Federal Group, in its turn, has clearly been concerned about the proposal, with six general issues of concern being outlined by the operator. In the company’s submission to the piece of legislation, the executive general manager of Federal Group, Daniel Hanna, has described the Government’s move as a shocking use of legislative power.
The gambling company claims that the 2003 Deed between the Crown and Federal Group includes a Rolling Term that makes sure that the operator is given notice of no less than 4 years in case any changes to the existing arrangements are made. The casino business has also argued that the arrangements are not ended unless formal written notice by the Minister is provided.
That is exactly why Federal Group now claims that with the changes set to take effect on July 1st, 2023, it should have been provided with such notice by June 30th, 2019. However, as revealed by Dr Hanna, no such notice was given, so the earliest date to end the agreement now should be June 30th, 2026.