The bank account of Woolworths is $172,000 lighter after paying a $172,000 fine to New South Wales regulators. New South Wales Independent Liquor & Gaming Authority (ILGA) hit the Australian Leisure and Hospitality Group (ALHG) with a substantial penalty. Woolworths holds a majority stake in ALHG.

Woolworths-owned ALH Group is the third-largest pokies operator in Australia with machines the length and breadth of the country. The ILGA received numerous complaints from customers who claimed of illegal practices at ALH Group venues.

ILGA learned the company’s Westower Tavern in Ballina and South Tweed Tavern plied customers with free booze. Keeping these customers playing pokies was the sole aim of lowering their inhibitions through free alcohol.

Valarie Griswold, the Executive Director of Investigations and Enforcement at the NSW ILGA explained more.

“A system whereby gamblers were given free liquor ‘shouts’ was captured in daily reporting targets and tied to gaming profits and staff performance. Staff were encouraged to seek out regular and high bigging gamblers for free drinks – a process that was documented and managed through reports and staff emails. This practice illegally used alcohol to boost gambling and what it does, essentially, is reduce a person’s control of their gambling.”

Woolworths Falls Foul Of Gaming Laws

It is illegal to supply or offer free or discounted alcohol to induce gambling under NSW gaming laws. Both venues received a $3,500 fine and an ALH Group manager now finds himself banned from the NSW industry for five years.

Nobody can play pokies at any ALH Group properties for a fortnight thanks to an imposed two-week ban. ALH Group is paying the $172,692 in court costs too.

This isn’t the first time Woolworths has received negative press for its underhand tactics. It confessed to routinely spying on customers back in August 2018 and admitted to offering free drinks to high-value gamblers.

A whistleblower confirmed back then that they documented the “ins and outs” of customers’ lives. They used the information about them to build detailed profiles about their lives.

Woolworths conducted an internal investigation resulting in the sacking of several members of staff. The company updated its responsible gaming procedures, although not well enough it seems.

The illegal practices continued into 2019 forcing the ILGA to issue warnings of potential fines. ILGA’s Deputy Secretary Paul Newson explained the second, more substantial investigation.

“Inquiries were made across 50 properties and ultimately we were persuaded there was a case to answer at two properties. The submission we have made is that alcohol was being illegally provided to gaming machine players to induce them to keep on gambling.”

New Endeavour Group In The Pipeline

Alliance for Gaming Reform’s Tim Costello pleaded with Woolworths to remove itself from the gambling industry.

“They should get out like Coles have got out. Australia has the greatest gambling losses of any country in the world. That’s $1,000 a head for every baby, child, student, and person in Australia. Woolworths is right at the front of all this.”

Costello may receive his wish because Woolworths is considering distancing itself from gambling.

Woolworths announced plans to create a separate entity for its pokies and liquor operations last year. Endeavour Group is the name of the new spinoff where Woolworth’s so-called “sin” divisions will operate.

Endeavour Group was meant to demerge or be sold off by the end of June 2020. COVID-19, however, has scuppered those plans. The ongoing pandemic forced closures of non-essential businesses on March 23. Some businesses are accepting customers but are a long way from being back to normal. The demerger will happen eventually, but not until later this year.

Further delays until 2021 are possible. It all depends on whether or not more states and territories re-enter Stage 3 lockdown. Metropolitan Melbourne has locked down again after a surge in new COVID-19 cases. Crown Resorts hoped to reopen its flagship Melbourne property but cannot until at least another six weeks.