Pokies would be phased out in Victoria under proposed Greens policy

Poker machines would be phased out of pubs and clubs in Victoria within a decade under a Greens policy that would tear up a new 20-year licensing deal legislated by the state Labor government last year.

The Greens, who are hoping to hold the balance of power in parliament after the election on November 24, said they would scrap the government’s 20-year licence extension, slated to come into effect in 2022, and replace it with a final six-year licence.

“The pokies for too long have wreaked havoc across our communities,” the Greens leader, Samantha Ratnam, said outside a gaming venue in Melbourne’s south-east on Wednesday.

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Local councils would be given the power to decide whether to grant new licences to pokies operators in 2022, before all licences are phased out from 2028. Poker machines would remain in Crown Casino.

The policy – which would also see the immediate introduction of maximum $1 bets and other harm minimisation measures – would starve the government of a major revenue source, with pokies losses adding $1.1bn to state coffers last financial year.

The Greens’ plan would cost $1.8bn over four years and about $6bn over a decade, according to a parliamentary budget office (PBO) costing. By 2028-29, when the machines were phased out, the annual loss of revenue to Victoria would increase to $1.1bn, up from $490m the previous year.

The plan sets aside a $200m compensation fund for pubs and clubs, but experts said repealing the licences would likely trigger legal action from the industry. The Greens’ policy is complicated by the fact that the state government legislated to extend poker machines licences last year.

Tasmanian Labor vowed to remove pokies from pubs and clubs if elected earlier in the year, but the licences there were set to expire.

Leon Wiegard, the president of Community Clubs Victoria (CCV), said the $200m figure in compensation appeared “plucked out of the air”. He labelled the policy an “overreaction”.

“Gambling is something that the Greens don’t like,” he told Guardian Australia. “If we didn’t have organised, properly regulated … gambling, (it) will go underground again,” he added. CCV has announced plans to campaign against the Greens over its pokies policy.

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Charles Livingstone, a pokies gambling expert at Monash University, welcomed the policy, though he said overturning the existing licences would likely see operators take legal action.

“My sense is there will certainly be compensation claims and they will be very significant,” he told Guardian Australia. “In order to short circuit that, you would need a compensation fund that is probably going to be more than $200m.”

Alliance for Gambling Reform spokesman Stephen Mayne praised the plan as a “very strong policy”. He disputed the suggestion the Greens would be tearing up the 20-year licences, saying they didn’t come into effect until 2022. “The parliament gave them these licences, the parliament can take them away,” he said.

Treasury documents show the government has already received $56m in deposits from operators applying for licences under the post-2022 arrangements.

Victoria is on track for record pokies losses in the 2018 calendar year. The machines were introduced into pubs and clubs in 1991 by Joan Kirner’s Labor government. Last year, the state government capped the number of machines at 27,372 as it created the option of new 20-year licences with the support of the opposition. Licences were previously 10 years in length.

The gaming minister, Marlene Kairouz, defended the government’s record. “We are freezing pokies numbers across the state, limiting daily cash withdrawals in venues and capping the number of pokies in areas most vulnerable to gambling harm,” she said.