Tatts Group has reported an 11.3% bump in profit to AU $166.88m (US $177.3m) on revenues of $1.97b (+4.1%) for the six-month period ending Dec. 31. Profits were aided by a strong performance from Tatts lottery operations and increased earnings (despite a decreased win rate) at fixed-odds division TattsBet. In a statement, the Aussie gambling concern said “nothing we can see suggests that our first half performance is not sustainable into the second half.” However, Tatts warned of one-off restructuring costs from (a) the replacement of the third-party lottery unit in New South Wales with the Tatts system, and (b) the integration of Tote Tasmania, which Tatts acquired in December for $103m.
Tatts’ acquisition of Tote Tasmania has generated no shortage of controversy. Apart from the recently announced redundancies, the formerly state-run Tote has come under fire for its anemic profit margins prior to the sale. Tote recorded almost $1b in turnover in 2011, yet posted a profit of only $1.3m. Tatts execs have suggested that the puny payday was due to Tote’s habit of offering its biggest-spending punters “massive” rebates in order to keep them coming back. Tote Tasmania’s outgoing CEO Craig Coleman admitted paying incentives, but told ABC news the theory that “rebates and commissions paid to large customers” were the determining factor in Tote’s wafer-thin profit margin was “simply incorrect.” Coleman’s protestations aside, a State Parliamentary committee plans to investigate whether “Tote mismanagement has driven a collapse in its value.”
Gambling investigations are all the rage in Australia this week. The Casino, Liquor and Gaming Control Authority just launched an inquiry into Sydney’s Star Casino shortly after GM Sid Vaikunta was abruptly let go following his “behavior in a social work setting.” Now a former Star manager has told the Seven Network the gaming joint had an ‘extreme’ party culture. Elizabeth Ward, a 16-year Star veteran, described the atmosphere behind the scenes as “a permanent party,” while another unidentified Star employee claimed there was “chronic drug abuse” among senior management.
Among other claims, Ward says a “senior minister from a foreign government” was ejected from the Star following “gross and obscene behavior” i.e. asking his dealer to have sex with him once he or she finished his or her shift. However, the pervy pol was let back inside the Star after he called senior management to complain. Ward said such protection of high-rollers became commonplace after American managers took control of the Star in 2009. The unidentified employee said staff was encouraged to do whatever it took to keep high-rollers at the tables for up to 48 hours at a stretch. According to the unidentified employee, when nature called, these high-rollers “would just wee under the table.” Classy.
Ward claims she and her husband were both let go from the Star following their attempts to investigate a high roller’s suspected druggie doings. The Star’s parent company, Echo Entertainment, issued a statement to the effect that all such claims were undercut by the fact that regulators recommended renewing the Star’s license just this December. Sure, but did they look under the tables to check how often the carpets were being cleaned?
