Chips down but the stakes are high

WESTERN Australian gamblers punted a mere $2.9 billion last year, and lost about $472 a head … a bit less than the cost of a few days in Bali. That seems most restrained. The rest of the country splashed out more than $100 billion and managed to drop $13 billion, or $931 per person.

The difference, of course, is that we did not have poker machines, which turned over more than $74 billion elsewhere in 1999-2000. Anyone who has travelled interstate will have observed how pokie parlours have now sprouted in country towns as much as the big cities. The mainly middle-aged clientele is confronted with temptation every time they walk down the high street with a shopping bag.

In Perth, anyone who fancies a tilt at a gaming machine, or gets an urge for a hand of blackjack, has to put on grown-up shoes, get in the car, and drive to the Burswood Resort Casino. They can hardly claim to have been lured onto the premises. If you are in a casino, you expect to gamble. That is what it is for.

The Labor Government seems just as implacably opposed as its predecessor was to a proliferation of pokies in pubs and clubs. But Burswood starts negotiations with the Government this week, which might result in the casino being allowed to install the poker machines that all its rivals have had for years, to augment its less popular electronic games.

Just maybe the company might get another win by way of a reduction in tax on the commissions it has to pay to snare high rollers. The 10 per cent individual shareholder cap is also up for discussion.

The Burswood share price, which seemed to have been trading at 80 cents since the world began, has been moving up lately in heavy turnover.

Institutional investors might be wondering whether Burswood is a property play or a gambling stock. The presence of Bill Wyllie on the share register, with a 9.9 per cent stake, would argue the former, while Kerry Packer and his mate Lloyd Williams, lurking somewhere under 5 per cent, obviously suggest the latter.

Actually it is both. The joint venture with Mirvac-Fini, which built Sydney’s Olympic Village, to develop a 47-acre housing site is a long-term money spinner for Burswood. There is not much the Packer-Williams duo does not know about gambling, and they may ultimately bring something to the table.

Before glitzy Australian rivals and the casino cruises out of Singapore and Hong Kong came along, Burswood had a near lock on the regional whale-size high rollers. It has been lucky to land a mackerel in recent times. Burswood boss John Schaap is as keen as ever to stay in that market – the major impediment now is that Asia looks like going into its second financial crisis in four years.

Economy’s bouncing back … well fancy that

TOTALLY confused about whether business is going to be good or bad? Don’t know whether to laugh or cry? No wonder. After months of relentless bucketing of the Australian economy, those market economist gurus are telling us happy days are here again.

Dun & Bradstreet has now discovered the engine driving the business community has kicked into life, with the majority of executives expecting sales, profits and capital investment to head nicely higher. Is this the same Dun & Bradstreet that was warning in mid-April of an imminent recession? “We are already in it”, declared D&B man Duncan Ironmonger at the time, “I think unemployment will rise to 7.8 per cent by Christmas,” the scrooge economist said.

It seems a number of economists have not been getting out much. They failed to see the inevitable building pick up which followed the post-GST slump (helped by the $14,000 first home owners’ grant). They did not notice the sharp run up on the stock market, which is a better pointer to future business conditions than most, and they did not give enough weight to the effects of tumbling interest rates, which loosened consumers’ purse strings.

Now the soothsayers are predicting up to 4 per cent growth in the coming year, probably the best among OECD nations, and providing a cushion against shrinking global growth. Asian neighbours, addicted to exporting goods to the high-tech markets, are in deep trouble. How silly that slagging off of Australia for not having a major IT industry now looks.

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