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Woolworths is Australia's largest owner and operator of dangerous high-loss poker machines. New research commissioned by GetUp shows that Woolworths target socially disadvantaged communities with their machines.
Woolworths shareholders have initiated an Extraordinary General Meeting that will be held in November to vote on a proposal that would require Woolworths to make their machines safer by limiting bets to $1 and losses on their machines to $120 an hour.

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Woolworths chairman Gordon Cairns has said he doubts $1 bet limits on poker machines will help problem gamblers, after facing questions about the supermarket giant's gaming business. The allegations centre on venues run by the Australian Leisure and Hospitality (ALH) Group, a Woolworths majority-owned joint venture with billionaire businessman Bruce Mathieson, which runs more than 12,000 poker machines nationally. The poker machine and pub arm of supermarket giant Woolworths has been spying on its punters in an effort to boost profits, federal independent MP Andrew Wilkie says.

By Andrew Starke

Woolworths has come out in strong support of its hotel and gaming business despite a number of shareholders voicing objections to the giant retailer’s poker machine operations at its annual general meeting held yesterday (Nov 26).

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The company owns about 11,000 poker machines in 280 pubs and clubs run by subsidiary Australian Leisure and Hospitality (ALH), which Woolworths acquired in 2004.

However, Woolworths’ chairman, James Strong, pointed out that ALH revenue makes up less than two percent of Woolworth’s annual turnover.

  1. 'Woolworths spies on its poker machine customers without their knowledge, keeps a secret database of personal information, and uses that information to encourage increased gambling,' Mr Wilkie told Parliament. 'This practice undoubtedly increases revenue, but it's also immoral, possibly illegal, and directly fosters increased gambling addiction.
  2. Independent Federal MP Andrew Wilkie was among those to welcome Woolworths' planned exit from Australia's largest poker machine operator. 'Poker machines are a toxic product and any responsible business should have nothing to do with them,' Mr Wilkie said.

He told shareholders that the retailer has no intention of selling its pub operations or reducing its ownership of electronic gaming machines.

Independent senator Nick Xenophon supported the position of a small but vocal minority of shareholders, telling reporters it was ironic that some people “can’t afford to buy food from a Woolworths supermarket because they’ve lost their money on a Woolworths poker machine”.

Both Strong and Woolworths’ CEO Michael Luscombe made it clear at the AGM that Woolworths complied with existing state gaming regulations and was committed to supporting initiatives aimed at helping problem gamblers.

More generally, both Strong and Luscombe warned that ‘frugalism’ is a defining feature of the Australian consumer at the moment.

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However this has to some extent benefited Woolworths.

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“Our supermarket and liquor businesses captured spending that would otherwise have gone to restaurants,” Luscombe said, adding that it had been a big year for investing in the company’s liquor supply chain systems with two new distribution centres in Melbourne and Sydney.

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Woolworths shares were trading at $27.90 at 2:00pm today (Nov 27) compared to $28.00 seven days ago.