Pub with no pokies may close The Australian 17 September 2007
http://www.theaustralian.com.au/archive/news/pub-with-no-pokies-may-close/story-e6frg6o6-1111114434509
Pub with no pokies may close
JOHN STAPLETON
SEPTEMBER 17, 2007 12:00AM
BRING back our pokies, declare the citizens of Carrathool, NSW. The poker machines were central to their local pub's viability and without them it is in serious danger of closing down. That means their town, like hundreds of other tiny rural townships, faces losing its only social centre.
While politicians and social workers around the country wrestle with the issue of problem gambling, in small communities across NSW the problem is not too many poker machines but too few.
Australia's two prime ministers in waiting, Kevin Rudd and Peter Costello, have both expressed their distaste for poker machines. But in many a rural centre, the local pub is not viable without them.
A bizarre anomaly in the NSW Gaming Machine Act passed in 2001 inadvertently created a trade in poker machine entitlements, now worth up to $250,000 each. The trade has seen a wholesale transfer of poker machines from country pubs - which were granted the right to have them in the 1990s to allow them to compete with clubs - to larger centres.
When Gino and Sharon Scutti purchased the Family Hotel in Carrathool for $240,000 in the 1990s it had four poker machines. Now the poker machines are gone and the historic 1880s pub is worth a fraction of what they paid.
Unbeknown to the Scuttis, the legislation passed by the NSW parliament in 2001 meant the poker machine entitlements adhered to the licensee of a hotel rather than to the landlord. In many cases, including the Scuttis, those entitlements were worth more than the hotel itself.
The people the Scuttis leased their hotel to sold the entitlements to the machines for a reputed $400,000 - and left the keys to the pub at the local police station. It was all perfectly legal.
Court action by the Scuttis and dozens of other hotel owners did not go their way; a NSW Supreme Court hearing determined the entitlements attached to the lessee and not to the landlord and the High Court refused to hear an appeal.
And the tiny town of Carrathool, off the main highway on the flat dry plains near Hay in southern NSW, population 40, lost its poker machines. Where they were is nothing but an empty patch of carpet.
Sharon Scutti said since public liability had made halls too expensive for groups to hire, country pubs were now the central meeting place in most rural areas. The poker machines helped attract enough people to make them viable and to sponsor the local bushfire brigade and a sports club.
"We bought the hotel with four machines and now we have none," she said. "To buy them back would cost us $800,000. If city pubs can't survive without poker machines, how do they think we in the country can?"
Gino Scutti said the pub acted as the town's only social centre and if they were forced to close their doors it would be devastating. "The Government gave out the poker machine entitlements to hotels so they could survive and it has had the opposite effect," he said. "It is killing us. It's a bloody mess."
Former NSW gaming minister Richard Face, who was minister when the Gaming Machines Act 2001 was passed, said senior government figures had ignored his warnings that the legislation was poorly written.
A spokesman for NSW Gaming Minister Graham West said the legislation, including the trade in poker machine entitlements, was under review.