Paying the piper and calling the tune? Following ClubsNSW's political donations

Part of the reason why the poker-machine lobby is successful in defeating any attempt to contain it is its capacity to give big money to political parties. It can also outspend most lobbyists on public campaigns.

We have identified 31 individual politicians or specific re-election campaigns from both sides of politics receiving ClubsNSW donations. These are the donations we can track; currently, donations of less than A$13,000 do not need to be publicly disclosed.

There is no suggestion the donations directly influence MPs’ decision-making. But while such donations don’t determine decisions they do, presumably, allow ClubsNSW to gain access to policymakers.

What’s also apparent is politicians hear the voice of ClubsNSW and other pokie operators loud and clear. Those seeking to reform poker-machine and other gambling regulations would argue this is to the detriment of good policy, and harmful to the well-being of those affected by gambling harm.

Carrot-and-stick campaigning

In October 2010, New South Wales’ then-opposition leader Barry O’Farrell signed a “memorandum of understanding” with ClubsNSW. This provided a raft of benefits for the clubs if he was elected, including a $300 million tax break and limits to competition.

Two months before O’Farrell and his gaming spokesman George Souris signed the deal, Julia Gillard began to stitch up a deal of her own with various crossbenchers to become prime minister. One independent MP, Andrew Wilkie, undertook to support Labor on the basis that it would introduce a system of pokie pre-commitment.

Half of Australia’s 200,000 pokies are in NSW; 70% of those are in clubs. Pokies make their operators a fortune – more than $11 billion per year, as of 2013-14, with about $5.4 billion of that in NSW.

It’s no surprise, then, ClubsNSW went to war over the Wilkie-Gillard reforms. If they were effective, they would strip out a substantial chunk of the pokie revenue – maybe as much as the 42% of pokie losses estimated to come from problem gamblers. With some clubs in NSW getting 80% or more of their revenue from pokies, any serious harm-minimisation measures would push them to the edge.

What the clubs did was textbook political campaigning. It involved both a carrot and a stick.

The carrot? Political donations to the major parties, and in particular to selected politicians from within the major parties.

The stick? A highly effective marginal seats campaign, coupled with broadcast advertising and local campaigns targeting specific politicians proposing gambling reform.

The result was a very nervous Labor backbench, particularly in NSW. Kevin Rudd capitalised on this, promising to ditch the reforms if re-elected as leader. In the end, Gillard gave in, abandoning the deal with Wilkie and overcoming her government’s dependency on his support by appointing Liberal defector Peter Slipper as speaker.

If that was the solution, the problem Gillard faced must have been wicked indeed.

Money, money, money

A search of the Australian Electoral Commission political donor records reveals that between July 1999 and June 2015, ClubsNSW declared political donations worth $2,569,181. Almost all of this money went to either the ALP ($886,505) or the Coalition parties ($1,682,676).

Other funds went to entities linked to the parties, including a $29,600 donation to the Liberal Party-linked Millennium Forum in 2012-13. This was just before the body was drawn to the public’s attention in unhappy circumstances before NSW’s Independent Commission Against Corruption.

For its campaign against the Wilkie-Gillard reforms, ClubsNSW allied with casinos, the Australian Hotels Association, and major players such as the Woolworths subsidiary, pokie operators ALH Ltd. It declared additional expenditure of $3,478,581 for this during 2010-11 and 2011-12. Of that, $2,989,600 was for broadcasting expenses.

Another $490,624 was spent on polling and electoral research – some of which may well have found its way into party-political hands.

Lobbying politicians effectively may sometimes require exchanges of ideas and, clearly, the exchange of funds. Until 2010, ClubsNSW donated only to Labor and Coalition party coffers directly. After that period, donations began to flow regularly to individual politicians and their campaigns.

A number of individual politicians, or their re-election campaigns, were substantial beneficiaries of ClubsNSW’s largesse after 2010. These included the Coalition’s Craig Laundy ($20,000), Craig Kelly ($6,500), Bob Baldwin ($4,000), and Luke Hartsuyker ($3,000). On the Labor side, the recipients included Joel Fitzgibbon ($8,500), Jason Clare ($9,250), Chris Bowen ($3,700) and Mike Kelly ($3,000).

And a donation of $50,000 went directly to a Gold Coast PO box, naming then-Liberal Party federal director Brian Loughnane, in 2011-12.

Liberal MP Kevin Andrews received $40,000 in donations for his Menzies campaign account up until 2014-15. Two of these donations, for $20,000 and $10,000, were originally earmarked as being for the Liberal Party’s Victorian division. However, they were, in fact, intended for Andrews’ campaign.

Clubs NSW donated a further $10,000 to Andrews’ campaign in 2014-15.

Andrews was a frontbencher with responsibility for gambling policy in the lead-up to the 2013 election. He opposed the regulation of poker machines, and was supported strongly by ClubsNSW in the election campaign.

Andrews became social services minister and was responsible for gambling once the Abbott government was elected. He repealed the Gillard government’s very modest gambling reforms in November 2013, just two months after winning government.

Toward reform

It seems there is a coterie of politicians on both sides who are trusted, or at any rate supported by, the pokies lobby. Whether they are agents of influence, intelligence conduits, neither, or both, we do not know.

What is clear is that gambling reform has been stymied by powerful vested interests. This has been facilitated – in fact, made possible – by very poor political donation disclosure laws.

If we are to have anything like a timely window into who is giving money to our politicians, and perhaps buying influence with them, reform of this system is urgently needed.

Further reading: Is there any hope for gambling reform in a new parliament?