Smoke ban costs clubs $1.7m a day

THE introduction of the indoor smoking ban last year cost clubs and pubs almost $1.7 million a day in poker machine revenue, cutting thousands of jobs in the industry and putting at risk future donations to charities and sporting groups.

Poker machine revenue for pubs and clubs plummeted $616 million last financial year compared with the 12 months before the smoking ban, according to figures from the Office of Liquor, Gaming and Racing. The trend is believed to have continued for many gaming establishments in the first five months of this financial year.

When these losses are added to Star City Casino's 12 per cent decline in poker machine revenue, the impact of the smoking ban on the state's gaming industry hits about $900 million.

"As predicted, club gaming revenue fell off a cliff when the indoor smoking bans were introduced," said the chief executive of Clubs NSW, David Costello.

The result was the loss of 2100 jobs at clubs in the first 12 months of the ban, bringing the total workforce down to 43,300. This was despite club memberships reaching a record high.

Club donations to organisations such as charities and professional sporting teams also fell by $8.9 million.

"Overwhelmingly, clubs have reacted to the fall in revenue by implementing a dramatic reduction in their workforce," Mr Costello said. "However, with employment now cut to the bone, I expect clubs will have little choice but to make further cuts in community donations over the coming 12 months."

The state's 1322 clubs received more than $3 billion in poker machine revenue after winnings were paid out last financial year. This was $385 million less than the year before the ban and did not include about $940 million paid in gaming machine tax and GST, Clubs NSW said.

The 25 clubs in Sydney's CBD experienced a 22 per cent drop in revenue in 2007-08, the largest percentage drop of any region in the state. Revenue at these clubs has fallen another 6 per cent this financial year.

However, clubs in the Hunter region suffered the biggest monetary downturn - $37.4 million less than before the ban.

Despite the figures, Clubs NSW said it did not oppose the smoking ban.

Hotels incurred a drop in poker machine revenue of $231 million in the 12 months after the ban, bringing total revenue to $1468 million after winnings but before taxes were paid.

The chief executive of the Australian Hotels Association NSW, Sally Fielke, said thousands of jobs had been lost as a result. "Coupled now with the financial environment and the Government's flawed new licensing restrictions, we fear that more jobs may go," Ms Fielke said.

Star City's spokesman, Peter Grimshaw, said the casino's poker machine revenue fell about 12 per cent in the 2007-08 financial year. He would not put a dollar figure on the loss.

But in 2006-07, gaming revenue from the casino's 1500 poker machines and 210 gaming tables was $610 million.

The downturn in poker machine revenue had eased a little during this financial year, he said.

Sydney Morning Herald

News Added: 09 December, 2008

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