The NSW Independent Liquor & Gaming Authority (ILGA) will consider a disciplinary complaint alleging that two ALH-run hotels on the North Coast illegally gave free alcohol to gaming machine players to keep them gambling.
Liquor & Gaming NSW has lodged the complaint against Westower Tavern at West Ballina and South Tweed Tavern at South Tweed Heads.
This follows a comprehensive investigation into ALH venues which included inspections of more than 50 NSW hotels, with more focused investigations into four hotels.
The investigation included covert surveillance, coercive interviews of licensees, staff and other witnesses, review of CCTV, and examination of records and systems.
Liquor & Gaming noted that in two cases, where sufficient evidence was obtained, disciplinary complaints have been lodged.
In the other two cases, which involved ALH hotels in the Sydney metropolitan area, there was insufficient evidence to proceed to a formal complaint.
The complaint lodged with ILGA alleges that the practice of supplying gaming patrons free alcohol was systemic at both North Coast hotels.
Under NSW gaming laws, it is illegal to offer or supply free or discounted alcohol to induce gambling.
For hotels that breach gaming laws, penalties include formal reprimands, fines up to $110,000 and suspension or cancellation of licences.
ALH told ABC News: “The complaint made to the NSW Independent Liquor and Gaming Authority (ILGA) relates to activities at two of our hotels in 2017.
“An independent of management review into ALH responsible gambling practices was conducted in 2018.
“As a result of the investigation ALH took a number of steps to enhance its responsible gaming practices.
“As the matter is now before ILGA we will be making no further comment at this stage.”
Pressure mounts on Woolworths to spin off ALH Group
Drinks Trade reported in March that Woolworths was feeling the heat to spin off its hotel and gaming business ALH Group.
There were calls for the supermarket giant to follow Coles’ lead, following the announcement it had inked a deal with KKR’s Australian Venue Co to manage its Spirit Hotels group.
The new business, called Queensland Venue Co, sees Coles and AVC owning an equal number of shares. Coles will take the profits from the bottle shops and receive about $200 million cash as part of the deal, while AVC will take the profits from the hotels and gaming operations.
“Coles have done the right thing selling out to a KKR-controlled business called the Australian Venue Company which I hope will continue the Coles advocacy for the introduction of $1 maximum bets,” Tim Costello, a spokesman for the Alliance for Gambling Reform, told The Guardian.
“With Coles having successfully divested, the onus is now on Woolworths, Australia’s biggest and most ruthless pokies operator, to remove itself from the 12,000-plus pokies operated by Bruce Mathieson in the ALH joint venture, which is 75% owned by Woolworths.”
There has been pressure on both Coles and Woolworths from reform advocates and shareholders to divest their hotel arms amid negative coverage about poker machines.
ALH Group owns 12,000 poker machines across 330 pubs throughout Australia, making it the largest pokies business in Australia.
According to The Australian Financial Review, Woolworths and advisers Citi and UBS are believed to have been working for months on plans to spin off ALH into a separately listed company “to minimise the reputational damage from poker machines”.