Victorian taxpayers are facing a $540 million bill to compensate gaming giant Tatts over a broken government poker machine contract – but neither major political party is prepared to take the blame.
Tatts and rival Tabcorp lost their duopoly over the operation of poker machines outside of Melbourne’s Crown casino in August 2012, following a decision in 2008 by the previous Labor government, with poker machines in Victoria now operated by clubs and pubs.
Victorian Supreme Court Justice Kim Hargrave on Thursday ordered the government to pay $450 million plus interest to Tatts, which could cost $540 million in total, but denied Tabcorp its $686.8 million claim.
Premier Denis Napthine said on Friday the government was seeking legal advice and was likely to appeal the ruling.
He said Labor and former gaming minister Daniel Andrews, now opposition leader, ignored compensation clauses in the Tatts and Tabcorp contracts if they lost their poker machine licences.
Dr Napthine said the auditor-general found the sale of poker machine licences should have reaped $4 billion but were sold for less than $1 billion.
“Let the public of Victoria understand that in the whole, sorry saga of these poker machine licences, there is already clear evidence that Daniel Andrews, as a former minister for gaming, and the former Labor government, have already cost Victorian taxpayers through their mismanagement of that sale and there is potential further losses through these court cases,” he said.
Dr Napthine said the government would not cut spending or raise taxes to cover the cost of the payout.
Opposition gaming spokesman Martin Pakula said the former Kennett government, in which Dr Napthine was a minister, built lucrative compensation into the deals.
“I don’t know why that clause was inserted. I don’t why, giving a company a 20-year licence to print money, you would then give them a clause which involves a big whacking payout when that licence runs out,” he said.
“But the people who put that clause in the contract ought to be questioned.”
Mr Pakula said the Labor government had legal advice that neither Tatts nor Tabcorp would be entitled to a payout, and that the current government was relying on similar advice.