How has the smoking ban affected poker machines?

In the lead up to the smoking ban, there were all sorts of complaints, mostly from venue owners, that the smoking ban would hit revenues hard and was too onerous for many small venues. Many of these complaints concerned pokies. As you probably know, pokie machines represent a huge percentage of the income for many pubs and bars, and as you also probably know – they’re often the smokiest rooms in the bar (or at least they used to be). These complaints were largely borne out in the immediate period following the implementation of the ban. Revenues dropped, and stayed low for quite a long period of time.

In March 2008, the NSW Office of Kliquor, Gaming and Racing showed poker machine turnover fell almost 20% in hotels, and 11% in clubs compared with March 2007. This was the worst month in the year since the ban was implemented. This percentage fall represented a fall in revenue for clubs from almost $300 million in March of 2007 to $230 million in March 2008. In terms of total turnover from gaming machines in the entire state, the fall was from $3.6 billion to $2.9 billion over the same period.

Clubs NSW and similar organisations were warning of “catastrophic consequences for the industry”. Essentially the same effects were mirrored in other states.

The NSW government refused to reconsider the ban despite the revenue loss, but did offer a tax deferral scheme to clubs and pubs experiences a downturn of greater than 15% in poker machine revenue as compared to the 12 months preceding the implementation of the ban.

However, In July of 2008, only three months after these reports, David Costello, chief executive of Clubs NSW reported that there had been a steady rise in monthly revenues from poker machines since July of 2007, and that growth had been reported in five out of the prior six months. Mid 2008 saw the feeling that the worst o the impact of the smoking ban was behind the hospitality industry. Overall we can say that although there may have been difficulties adjusting to the smoking ban, the industry has largely recovered and it can look forward to continued growth as the popularity of poker machines continues to increase.