Woolworths looks to further strengthen grip on pokie industry
Woolies – already one of the major players in the Australia pokie machine industry – are set to further tighten their grip on the sector as they prepare to go in to partnership with Arthur Laundy, who is one of the major hotel owner in Queensland and New South Wales. This would see the vice like grip of Woolworths further increase and catapult them in to the leading position in the world in regards to the amount of pokie machines owned.
In fact, after this partnership goes through, they will own more machines than the top 5 Las Vegas casinos – something that really shows just how much the pokie games machine craze has swept through Australia. After the deal Woolworths would be the owners of 13,300 machines, while the Las Vegas giants would be about 1,000 behind this figure. Granted, Woolworth’s machines are spread over a large number of premises but still – it is a record they are likely to brag about.
The specifics of the agreement between Woolworths and Mr Laundy would see Woolworths take control of 40 of the hotel magnate’s most gambling oriented hotels. Should Mr Laundy then buy the freehold of the properties as expected though, he would still be in control of the building, but not the actual business venture – effectively being Woolworths’ new landlords in a strange twist of fortunes.
One problem that Woolworths could face in regards to this deal is the fact that it has to be approved by the authorities first – something that means the acquisition isn’t a done deal yet. This is because Woolworths already have a huge market share when it comes to pokie machines, meaning that this purchase could effectively see them gaining a monopoly of the market – something that the government won’t stand for.
Should it go through though then Woolworths will become the proud owners of some of the most profitable gambling hotels in the states of New South Wales and Queensland though – including the Belfield Hotel, which is the 25th most profitable pokie club in the state of New South Wales. This venue turns over $90,000 per week through machines alone, which is a huge indicator regarding the amount that Australian citizens love to gamble and would raise further the profile of Woolworths in the area of gambling – a profile that is already higher than any other company’s in the country.
It is this huge gambling craze that is threatening the like of Woolworths in the long run though and this acquisition comes at a time when they find themselves under threat of further regulation from central government. With the vote looming regarding gambling reform, is this move by Woolworths to purchase this huge amount of property one that will backfire, or is it a prudent move designed to maximize their chances of surviving a “yes” vote unscathed? Although we can all speculate, only time will tell what the future holds for the industry as a whole.
Tags: Arthur Laundy, Woolworths
This entry was written by Jamie on Thursday, July 7th, 2011 at 9:25 pm and is filed under News.
I remember, quite a few years back about the then Liberal Party fussing over the Packers and Fairfax groups proposed ownership of most of Australia’s media networks, and the main reason why all this was not allowed.Now we have Woolworths in the process of owning more pokie machines than anyone else here in Australia, along with Petrol Stations, Big W stores and Supermarkets, plus the many hotels as well, all with the blessing of this Govt.Wonder who’s got their finger in this massive pie, so to speak, to allow Woolies to own such a massive Empire.