Thursday 28 December 2017

Pokie jobs, jobs,jobs?


Local parliamentarian Adam Brooks left no room for doubt. He confided to The Advocate that Rebecca White’s ”latte-sipping, lefty agenda ... will shut down jobs and will shut down the hospitality industry in the North-West Coast.”

Gosh, the entire hospitality industry?


How many jobs are there in pokie pubs? Let’s have a look at what an industry participant submitted to the recent parliamentary inquiry.




The above sets out the financial aspects of EGM operations at an average Tasmanian pub with pokies. The annual gross profit or player losses are $1.04 million. It is likely to be a venue with 20 pokies altho’ that’s not explicitly stated. The average player losses per EGM is therefore $52k just slightly more than the statewide average for 2016/17 of $46k.

The wages component of the EGM operations are $75k .....which represents 7.2% of player losses. The above case study was presented to the inquiry trying to establish the low level of returns to venues. Hence it is unlikely the wages figure is understated.

There it is, straight from the horse’s mouth. EGM wages are only 7.2% of player losses.

But even if wages are low relative to player losses, perhaps the remaining player losses benefit towns in other ways. If only they remained...?  Unfortunately most of player losses are creamed off by Federal Group’s Network Gaming and leave town, as this chart shows.

Pubs (and clubs) receive 30% of player losses via a commission from Network Gaming. Venues pay part of this back to Network Gaming to cover the hire of EGMs. This means that the worst performing EGMs end up with only about 10% of player losses whilst the top performers with player losses approaching $100k pa manage to hang on to about 25% . The remainder, highlighted in ‘red’ in the above chart is taken by Network Gaming. There’s not much ‘blue’ in the chart. There’s not much that stays in towns.

The following table has the relevant figures for regional areas, all those area outside the urban areas of Launceston and Hobart. (NB a more detailed break up for regional towns is shown in the Appendix at the end of the blog).


no EGMs
Player losses $'000
Town losses $'000
Pubs retain $'000
Wages $'000
FTEs
Regional areas
South
270
9,797
8,073
1,724
705
17.6
North
295
8,163
7,042
1,121
588
14.7
North West
765
36,880
29,258
7,621
2,655
66.4
Total regional
1,330
54,839
44,372
10,467
3,948
98.7



Total player losses are $54.8 million. Half the Statewide losses in pubs and clubs accrue in regional areas. But $44.4 million leaves town courtesy of Network Gaming. Of the remaining $10.5 million, $3.9 million is paid in wages for 98.7 FTE employees. That’s 7.2% of player losses.

Whatever job losses may initially occur in EGM pubs if Labor implements its policy, they will be more than offset by job gains in other sections of hospitality, even in casinos and keno as some spending migrates, not to mention other areas of local economies that will attract more spending. One thing is glaringly obvious. By stopping the massive drain to Network Gaming how can regional areas not be better off if pokies disappear from the streets?





APPENDIX

REGIONS IN DETAIL
no EGMs
Player losses $'000
Town losses $'000
Pubs retain $'000
Wages $'000
FTEs
South
Brighton/Bridgewater
60
4,020
3,084
936
289
7.2
Sorell/Dodges Ferry/Dunalley
90
2,898
2,434
464
209
5.2
New Norfolk
48
1,008
922
86
73
1.8
Huonville
25
800
673
128
58
1.4
Snug
20
490
433
57
35
0.9
Orford
15
323
293
29
23
0.6
Dover
12
258
235
23
19
0.5
Total
270
9,797
8,073
1,724
705
17.6
North
George Town
55
1,750
1,473
278
126
3.2
Longford/Perth/C'belltown
60
1,525
1,338
188
110
2.7
St Helens
45
1,433
1,205
227
103
2.6
Scotsdale/Bridport
45
1,393
1,178
215
100
2.5
Deloraine/Westbury
35
873
768
104
63
1.6
Exeter/Beauty Point
35
700
648
53
50
1.3
Bicheno
20
490
433
57
35
0.9
Total
295
8,163
7,042
1,121
588
14.7
North West
Devonport
230
10,615
8,466
2,150
764
19.1
Burnie
110
7,096
5,462
1,634
511
12.8
Ulverstone
110
6,316
4,916
1,400
455
11.4
Somerset
60
2,800
2,230
570
202
5.0
Wynyard
50
2,469
1,953
516
178
4.4
Smithton
50
2,000
1,625
375
144
3.6
West Coast
65
1,866
1,599
267
134
3.4
Latrobe
30
1,800
1,395
405
130
3.2
Penguin
25
1,000
813
188
72
1.8
Shearwater
20
550
475
75
40
1.0
Sheffield
15
368
325
43
26
0.7
Total
765
36,880
29,258
7,621
2,655
66.4
Total regional
1,330
54,839
44,372
10,467
3,948
98.7



Note to the above table.

·       The table is based on data from Tasmanian Liquor and Gaming Commission where player losses are provided for local government areas. Where LGAs include more than one town or where LGA data is aggregated for LGAs with two venues or less, a model was used to estimate player losses.

·       ‘Pubs retain’ = commission of 30% of player losses less EGM hire of $4,500 per EGM.

·       ‘Town losses’ = Player losses less ‘pubs retain’.

·       Wages = 7.2% player losses

·       FTEs shows the estimated number of FTEs assuming an FTE wage of $40,000.


No comments:

Post a Comment