Shareholders Want Woolworths to Sever Ties with Pokies Industry

Woolworths Pokies Scandal

A major shareholder in Woolworths wants the grocery chain to divest itself of ALH Group, its pokies division.

Supermarket giant Woolworths faces pressure from investment firms to take a step back from pokies. Woolworths controls ALH Group, which is Australia’s largest poker machine operator. ALH Group operates over 12,000 pokies throughout Australia and owns EGMs in all six states.

Perpetual Investment, one of Woolworths’s largest shareholders, believes the company’s link to ALH Group undermines its reputation as a family-friendly business. Perpetual Investment sees pokies as a threat to the buinsess, because they serve as a long term PR problem.

Therefore, the investment and trustee group wants Woolworths to sever ties with its poker machine business, according to a Fairfax Media report.

News of the investment group’s disdain for pokies caused Woolworths shares to decline 3.2% in early trading. Woolworths did not indicate whether it will comply with Perpetual’s wishes, though that is unlikely.

Whistleblower’s High Roller Allegations

In a statement, Woolworths said, “What we’re focused on with ALH is to continue to enhance its responsible gaming practices and quality service at the hotels.”

Recent news stories gave Woolworths a black eye for its pokies business, because it profited from perceived wrongdoing.

Last year, a whistleblower told anti-pokies MP Andrew Wilkie that Woolworths staff spied on gamblers and encouraged high rollers’ increased gaming habits.

ALH Group Hotel Staff

The whistleblower claimed Woolworths staff members offered extra free drinks to “high-value” punters. ALH Group launched an investigation into the allegations at the time. Eventually, it fired 22 staff members. Twenty of the firings took place at Queensland hotels, but that did not end the controversy.

ALH admitted that a “customer service program” operated for about 6 months in the Queensland hotels. That included keeping records of the “ins and outs” of high stakes players’ gaming habits. Staff members even recorded which football (soccer) teams certain VIP members liked.

The whistleblower released an internal memo which said, “We’re actually writing it down so that we can get people to stay for as long as possible, to put as much money into the machines as possible.”

ALH Group on Pokies Scandal

ALH Group said the scheme “gave rise to instances of ALH employees recording descriptive information about gaming customers,” which ALH admitted is beyond the pale.

The statement added those actions were done “in a manner that was below ALH’s expectations and contrary to its policies.” The scandal caused protests across the country at Woolworths stores, which people identified with the pokies spying.

Andrew Wilkie on Pokies Scandal

As one might expect, Independent MP Andrew Wilkie’s take on the pokies story was much different. The Tasmanian member of parliament said, “If they are going to keep poker machines, then  [they] should put in place effective harm minimisation, $1 maximum bets, and mandatory precommitment.”

Wilkie added that Australian regulators were lax in their oversight role. The anti-pokies crusader said, “I call on the poker machine regulators across the country to get off your arse and to start regulating the industry. It’s not the job of a crossbencher and brave whistleblowers to be doing your job.”