25 July 2008

Southern Cross Club positioning to acquire Wests

| Skidbladnir
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As there were 72,000 members of the Canberra Southern Cross Club (CSCC) at last financial report, and every member affected by the proposal will have received their letter and ballot, for most people this isn’t really news, just numbers.

But, for those of you who aren’t in the 1 in 5, this might be.

Wests went into receivership in April 2008, and the call went out for expressions of interest in buying up all the assets (the land, assets, and business operation at Macquarie, and the business, equipment, and leases for Kaleen and Turner), and their 191 gaming machine licenses.

According to the letter the upper limit of value was placed at $8.9mil.

If the bid were successful, would be the CSCC’s first foray north of Lake Burley Griffin, but it wouldn’t be a major cost or unplanned risk, as according to the CSCC 06-07 Financial Report their cash reserves were already in the 8-9mil range at 07-08 financial year’s end, and their notice to members indicates that the acquisition of northside properties as they became available had been an intention ‘for a number of years’.

There are apparently 13,000 members northside, and with CSCC already having an established presence at five clubs around town, the buy could probably lead to a fairly slick and efficient operation.

But, (and there always is one)…

If gaming behaviour stayed the same, and CSCC kept the machines, and run them at the same level as Wests did, this would bring CSCC’s total number of machines (based on 06-07 Ministerial Declarations) from 522 to 713, and generate an additional $5.2mil in annual gross income.

This would create one organisation accounting for just shy of 15% (14.66%) of all gaming income in the ACT.

Bill Stefaniak, who has previously sung the praises of the Wests Rugby Club in Hansard (See Google cache) has been strangely silent on the issue.

ACT Labor also seem to have been quiet about any impact this may have, possibly as their largest single contributer, the Canberra Labor Club, has only 257 licences (7.6% of gaming revenue last declaration period), but contributed 97.3% of ACT Labor funds last year.

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Vic Bitterman7:53 pm 25 Jul 08

We voted “Yes” to the proposal. Just makes sense really.

What percentage of gaming revenue accrues to the Casino?

The CSCC provides premises for U3A classes, complete with gratis coffee and bikies (though probably not resusitation or trusses) as do a number of other clubs around Canberra, although they do ask (quite properly) that you become a member. It will be good to have these on the Belconnen side.

On the other hand, the ANU charges University of the third age to use its facilities, presumably because it considers that the wrinklies are not really fee paying students.

One up for the clubs. Thumbs down for mean spirited academia.

These mega clubs make a mockery of the club monopoly on gaming machines if you ask me.

May as well let the pubs and casino have them too if we’re going down this path.

BUT.

Personally I’d prefer a low cap (20?) set on the number of machines any club can have and see more small clubs actually serving a community purpose rather than these vast tacky gin palaces cum drinking barns.

But I suspect it’s too late for that. The machines were supposed to empower community groups and now they’ve got so much money the tail is wagging the dog and the community’s got its nose pressed against the glass.

Does the money that the Labor club donate to the Labor party count as benefiting the community? Because I would argue that putting money into politics only hurts the general public…

But then, I’m a cynic.

I doubt if the pollies are going to weigh into any debate in an election year.
Does the CSCC ever donate to political parties?

So is the current level of debt at Wests $8.9 mill? If not what will happen to any extra? Does it go to Wests members? (all club constitutions allow for this to occur, just as they allow for members to be liable for all debts)

In most cases when a bigger club takes over the struggling club they do it for the costs of the debt. Happened when the Raiders took over Royals, when the Ainslie took over the bowling club and when the Cross club took over the Yacht club to name a few…

Either way I’m for it. Strength in size and members can only ensure the long term viability of those premises.

And as for them having a huge chunk of the pokies market – Tatts and one other company control all the pokies in VIC….

tylersmayhem2:44 pm 25 Jul 08

Who cares, Canberra clubs suck anyway:

http://the-riotact.com/?p=7847

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