Hawks claim $2m pokies revenue as community benefit, by Melissa Fyfe - The Age - 5th October 2008
Cashed-up premiership team Hawthorn has paid itself almost $2 million in revenue from its poker machine club - and then claimed it as a community benefit.
The triumphant Hawks - along with other AFL clubs that own poker machine venues - have been exploiting a legislative loophole that allows them to claim a smorgasbord of venue expenses and running costs as community benefits.
In total, Hawthorn claimed that last financial year it pumped $3.3 million of revenue from its poker machine venue, Vegas at Waverley Gardens, back into the community. However, analysis of the payments shows only $3058 - or 0.1% - was for genuine community gifts or sponsorships unrelated to running the business.
The extent to which Hawthorn has manipulated its ethical obligations to the community as an owner of a poker machine venue was revealed last week when it lodged its community benefit statement with Victoria's gambling regulator.
The $1.9 million payment, to "subsidise football operations", was listed as a community benefit. It is all the more curious as records show that Hawthorn made no such claim last year.
A spokesman for the Hawthorn Football Club said the club was busy conducting its Best and Fairest yesterday and declined to comment.
The club - which also claimed the community had benefited from the purchase of nine televisions and monitors and a calculator - has come under fire from anti-gambling groups after winning approval in July to operate 80 poker machines in the economically repressed Caroline Springs, in Melbourne's west.
A Monash University analysis of community benefit statements lodged by the AFL clubs that own gambling venues found they contributed $15.6 million to the community last financial year. But only 4.1% of claims were for genuine charitable or benevolent purposes, the rest was for ongoing costs of venues such as wages, electricity, cleaning, rent and repairs.
Dr Charles Livingstone, a senior lecturer at Monash University's department of health science, said his analysis showed the clubs that run pokies venues - including Carlton, Collingwood, Essendon, the Western Bulldogs, Geelong, Melbourne, North Melbourne, Richmond and St Kilda - had "significantly overstated" the actual benefits to the community from poker machine earnings.
A lack of transparency made it difficult to tell how much money was going to clubs as a so-called community benefit. "Once you look beyond the facade, the whole thing is a sham," he said.
Dr Livingstone said Hawthorn's large subsidy disclosure was perhaps the result of the premiership team being more honest than other clubs, but, he added, it "could explain why Hawthorn have come so good so fast".
"They've got a stream of money coming straight into the club," he said. "The successful clubs are the ones that get their on-field as well as their business side together. They are the ones that can afford to pay their players well and employ good coaching staff.
"The club that has got more money for these things will end up going better."
Under the law, poker machine venues run in pubs and hotels are charged a community benefit tax of 8.3% of gambling revenue, but as club venues - including those run by AFL clubs and RSLs - are seen as operating for community benefit anyway, they must simply declare each year how 8.3% of their revenue is spent on benefiting the community.
The AFL-run pokies venues are not alone in using legal loopholes to claim ongoing business expenses, but anti-gambling groups believe payments to large football clubs do not constitute real community benefit.
In the clubs' community benefit statements lodged last week with the Victorian Commissioner for Gambling Regulation, the Western Bulldogs - which is pushing to open a large pokies venue in Maribyrnong - claimed $10,636 for player appearances at Club Leeds, then another $13,051 for player appearances at the Vic Inn, Williamstown.
Geelong claimed $8219 for a new interchange bench, $9029 for the football department and $121,964 for "maintaining football team". Melbourne claimed $12,408 for promotional liquor as a community benefit. North Melbourne claimed a "poker subsidy" of $5930 and St Kilda claimed $9193 for players' equipment.
The community benefit statements also showed the AFL clubs - and clubs generally - were continuing to pour large amounts of money into outdoor smoking areas. Carlton claimed $31,729 for a smoking room, while Collingwood claimed $32,861 for renovation of an outside smoking area.
Neither Collingwood nor the Western Bulldogs would comment on the scheme when contacted by The Sunday Age.
Michael Sinclair, a spokesman for Gaming Minister Tony Robinson, said the State Government was warning clubs that they would have to pay a higher taxation rate and could ultimately lose their gaming machines if they failed to satisfy community benefit obligations.
But the Opposition accused the Government of sitting on its hands while 12 months of "sometimes questionable" community benefits found their way through the loophole Labor had provided.
"Every questionable claim reduces funding to genuinely benefit the community," shadow gaming spokesman Michael O'Brien said.
InterChurch Gambling Taskforce chairman Mark Zirnsak said he acknowledged there was some community benefit funding sport, but big AFL clubs had moved away from their communities and had come to rely on gambling revenue as an income source.
"They have a concerning disregard for the harm done in these communities - people are losing their jobs, marriages are breaking up and people are turning to crime to fund their gambling addiction. The clubs don't seem to see this," he said.
Victorians lost a record $2.6 billion on poker machines last financial year. The new regulations, which tighten the community benefit categories but still allow venues to claim some ongoing costs and wages, apply this financial year.
Where the money went
Carlton: $299,046 for rent of bistro, dining and function room.
Collingwood: $32,861 for renovation of smoking area; $216,550 for rent.
Essendon: Gift to "sport" of $143,723; discounted meals $118,461; drinks $39,572; heating and lighting $45,749.
Western Bulldogs: Football - direct costs $52,768; "culture" $42,727; player appearances $13,051.
Geelong: New grandstand $18,673; new interchange bench $8279; football department $9029; maintaining football team $121,964.
Hawthorn: Subsidising football operations $1,905,183; electricity $28,253; property rental $212,637; flat screen TVs $584, $348, $839.
Melbourne: Promo liquor $12,408; repairs and maintenance $17,289; cleaning $33,557; property rental $252,958.
North Melbourne: Poker subsidy $5930; rental $2600.
Richmond: Contribution to RFC $318,590; electricity $17,998; cleaning $20,562; property rental $203,145.
St Kilda: Sport sponsorship $163,411; player's equipment
Community Benefit Statements can be downloaded from www.vcgr.vic.gov.au
(Credit: The Age)
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