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Melbourne Storm sell lucrative hotel and pokies

Mon, Feb 4, 12:08pm by Staff Writer

The Melbourne Storm is the latest professional sporting organisation to divest themselves from gaming interests after the club sold its poker machines.

The National Rugby League is a sport that is underpinned by gaming revenue, with the Storm looking to break the mould of clubs north of the border that rely on the income for survival.

Victoria’s only NRL club is privately owned by a conglomerate including caravan magnate Gerry Ryan and bookmaker Matt Tripp.

The group sold the Kealba Hotel in Melbourne’s north-west, including its 172 poker machine licenses to IPR Hotels last month.

The hotel in St Albans was the only Storm-related pokies holding and is a site where punters lost the fourth-highest amount of money out of nearly 500 venues in Victoria. Losses at the venue neared A$20 million in 2018.

The Victorian government’s gambling regulator has indicated that poker machine licenses are valued at approximately A$13 million, according to The Sydney Morning Herald.

The sale of the license and the hotel points to a significant windfall for the 2018 NRL Grand Finalist’s, who purchased the venue for A$10 million in 2015.

The Kealba Hotel is within the Brimbank local government area,, which last year recorded the highest pokies losses in the state.

The A$140 million loss figure is a state record.

The Kealba Hotel and pokie machine sell-off has been welcomed by gambling reform advocates.

Reverend Tim Costello has implored the new owners of the venue to operate it more “responsibly than Melbourne Storm, which was trading the maximum 20 hours a day, seven days a week in one of Melbourne’s most disadvantaged communities.”

Only a handful of NRL clubs consistently turn a profit, with many reliant on pokies revenue.

League clubs Canterbury and Penrith pocketed the most of any in 2017, registering revenue of more than A$65 million from their venues.

NSW Treasury data projects poker machine profits in the state to grow by 12 per cent in the next four years to reach A$7 billion by 2021.

The Storm last year announced an ambitious plan to increase the club’s membership base to 50,000.

“We want to see membership go from 25,000 to 50,000, and based on the modelling we’ve done and the experience of the last five years …we genuinely believe we can get there,” Mr Tripp said.

Mr Tipp said owning a hotel was necessary to stop the bleeding in the club, for it to stand on its own two feet.

“We’re not reliant on the gaming venue, which means the gaming venue might not be necessary for us as we progress. I would prefer to just focus on the club rather than other moving parts of it,” he said.

AFL clubs move away from pokies but Bombers stay put

Australian Football League clubs Collingwood, Melbourne, Geelong and the Western Bulldogs have all either completed or planned exits from the gaming industry, with North Melbourne pokies-free for a decade.

Despite many clubs looking to step away from pokies, the Essendon Football club recently clarified its place in the industry.

Chief executive officer Xavier Campbell told The Age that the club remains committed to pursuing pokies revenue in both the short and medium term, emphasising the community role that gaming venues operated by the club have.

“We need to realise that, yes, pokies are an element of these venues, but there’s much more to these venues than just gaming…there’s a range of community groups that use these venues…we have to be conscious of their broader impact,” Mr Campbell said.

The club’s involvement with the Melton Country Club has been under fire in recent times, with the Melton City Council voting unanimously 8-0 in December to approve a 29-year lease extension to 2047.

Campbell emphasised the club’s focus on diversifying its revenue streams.

“Make no mistake, our club is committed to investing in people and capability to challenge traditional thinking on what the footy club looks like moving forward,” he said.

The club is looking towards other ventures including e-sports and property holdings to help facilitate its long-term sustainability.

A parcel of land situated parallel to the club’s base in Tullamarine will potentially generate joint ventures with the Melbourne Airport, while the freehold assets of its previous home of Windy Hill will be maximised to its commercial capacity.

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