Many years ago I was a guest of the Ainsworth Leisure Corporation in Australia. Ainsworth’s make the Aristocrat brand gaming machines at their sprawling factory in Rosebank, a suburb of Sydney. At the time I was the chairman of the New Zealand Licensing Trusts Charitable Foundation. The foundation owned and operated all of the gaming machines in most of the 26 licensing trusts in New Zealand, so in a roundabout, but unjustified sort of a way, I was seen by Ainsworth’s as a substantial customer.
The factory itself was amazing. It has a staff of 1200. At the start of the chain are sheets of flat steel which are welded together to create the shell. Once this progresses past the paint shop the technology is applied. I was particularly interested in the graphic art department where they dream up the weird and wacky illustrations that grace the machines. In another section a think-tank group sit at computer screens concocting new games to challenge existing players and attract new ones. Then there was computer chip division with rows of employees deftly assembling the driving heart of the machine. Eventually the finished product, worth about $8,000, rolls off the assembly line. It is then tested by teams of people who play the machines for hours ensuring they have no miscalculations. The coin slots are made to accept all monetary denominations. I saw some for rupees, and others that took drachmas.
The gambling bug knows no cultural boundaries.
It was almost incredulous to think that this machine, which you had seen start out as a piece of flat steel, was now capable of making thousands, perhaps millions, of dollars for its owners. Unlike say a car that could have been made in a similar factory using the same sort of know-how and technology, which at least has a defined and more practical purpose in life.
I had lunch one day in the executive dining room with the company owner, Mr. Len Ainsworth, who back then was well into his seventies. He told me that the factory originally made dental equipment and was established by his father. In the 1950’s they decided to manufacture “these new fangled poker machines” and the business took off. They became world leaders in gaming machine technology.
He also told me of the fierce opposition the machines faced when they were first introduced, the main fear at the time being that the Mafia or a similar form of organised crime ring would move in and take over and control their operation, which is indeed what had happened in Las Vegas.
Other concerned groups envisaged the demise of the retail sector of New South Wales as the hapless citizens poured all their hard-earned cash into the bottomless poker machine hoppers. No other state in Australia was game to license the “pokies.”
According to Len Ainsworth these dire forecasts never materialised. In fact what happened was that the poker machines flourished in the chartered clubs and in turn caused the clubs themselves to flourish. Clubs are run by committees of ordinary citizens, no graft exists, other than the odd manager taking off from time to time with the buxom barmaid and a weeks machine takings. The Mafia never got a look-in.
Ainsworth’s executives took me around Sydney to view some of the bigger clubs. The great majority of patrons at these clubs were working and middle class folk, many of them retired, and the poker machine profits meant that facilities were lavish but affordable. Prices in the dining rooms were exceptionally modest. You could hardly have a meal at home as cheaply.
Len Ainsworth made the point that money is made round to go round and the burgeoning clubs needed tradesmen to erect them initially, and then to continually upgrade them. As a result the New South Wales building industry boomed. He noted too that the retail sector in the state, despite the fearful predictions, was the most buoyant in Australia.
Is there a downside then?
I am sure the vast majority of people who play the pokies do so for the sheer enjoyment of trying to outwit the machine, and are sensible in the amount they allow themselves to fritter away. But doubtless there are people who can ill afford the gamble and are hanging their hopes on taking out the jackpot. None of us can make the judgment or point the finger; what people do with their money is their business.
John Key’s bargaining with the owners of SkyCity means that New Zealand will get a world-class convention center at no cost to the taxpayer. His political opponents do see a cost however, claiming that problem gamblers will multiply. Certainly the New Zealand experience with gaming machines has not quite matched Mr. Ainsworth’s view of the world. This may be because New Zealanders don’t gamble to the same extent as the Australians so our chartered clubs haven’t benefited to the same degree.
In 2004 local authorities were given the power to control the amount of machines in their districts and since then the number of poker machines in New Zealand has decreased dramatically. There were 25,000 at their peak in 2003 down to 17,500 today.
Mr. Key says the SkyCity people can have another 230 machines if they stump up with the money for the Convention Centre.
The odds look good to me.
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