Pokies become an important income for Woolworths

Woolworths don't sell only food anymore..
Woolworths don’t sell only food anymore..

Woolworths or else Woolies, until now known as a huge supermarket operator, is rapidly developing as one of the world’s biggest pokies operators. Woolies with approximately 11,700 machines in operation across Australia, runs more poker machines than the six of the largest Las Vegas casinos combined. The earnings of this kind of activities have change significantly for Woolies during the last months. According to some estimation on this industry Woolies earn more than $200 million a year from gaming which is almost as much as the earnings for the Tabcorp-spinoff Echo Entertainment (fourth largest listed gaming operator in Australia).
This increase in the earnings for Woolies was triggered by some changes in the Licence System for pokies in Victoria. This changes smashed the monopoly of gambling giants Tabcorp and Tatts. Currently Woolworths is the largest single beneficiary.Woolworths’ ALH arm operates around 4677 machines which are more than one-third of the poker machines in Victoria’s pubs and is very close to the maximum number of machine which are allowed under current licensing arrangements.
According to City bank, AHL had earnings of $140 million last year and it is expected to increase this amount with an additional $72 million in annual earnings.”Profitability … should increase dramatically as per the new arrangements,” Citi analyst Craig Woolford said. Woolies, will spend more than $164.3 million on poker machine entitlements, and a further $26.2 million on new machines. They operate 16% of the poker machines in Victoria including 2500 machines in Crown Casino. ”The $164.3 million amount is in effect paying for the gaming machines that we already have,” a company spokesman said. The Baillieu government will receive $1.12 billion from taxes on pokies this financial year, but it is expected to get more than $1 billion in legal claims from Tatts and Tabcorp over the controversial decision not to compensate the two companies for the loss of their licenses.