The ACT Government's new poker machine trading scheme will allow an extra 51 class C poker machines in clubs, Racing and Gaming Minister Joy Burch conceded on Monday while defending her decision to allow gamblers to feed $50 notes into the machines.
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The trading scheme will also allow small clubs to sell old machines, which bigger clubs will be able to convert to the most modern stock, in a scheme that allows clubs to increase poker machine numbers for the first time in many years.
The law as it stands prohibits sales of poker machines among clubs.
Just before Christmas, Ms Burch quietly changed the note limit for poker machines from $20 notes to $50s, a move that went unnoticed until revealed by The Canberra Times on Monday.
Anti-gambling groups have reacted in surprise and anger, saying more money will be fed into machines, most of it from problem gamblers.
Salvation Army recovery services program clinical director Gerard Byrne said the government should have consulted before making such a significant change, especially with families who bore the brunt.
"We're very disappointed that this decision has been made and we're very disappointed that there was no consultation," he said.
"We have people who come to us who can't meet their day-to-day living needs because the breadwinner lost the money and they don't have money for food. These are the children who don't get to go to school excursions because the money's just not in the house for it. Vouchers for grocery items become the lifeblood of the family," Mr Byrne said, urging people with a problem to contact the Salvation Army.
Ms Burch will introduce changes to poker machine law in March, scrapping a target of 4000 machines in favour of a ratio of 15 machines to 1000 people. She will also set up a trading system that will allow clubs to buy and sell machines among themselves.
Hotels and pubs will be able to sell their licences for class B machines – old machines that are no longer widely used – as though they were the more modern class C machines. Clubs can buy the licences and install new machines, subject to one licence being forfeit for every four bought.
Pubs and clubs have 68 machines. After one in four are forfeited, clubs will have an extra 51 licences.
Smaller clubs with old or little-used machines will also be able to sell their licences to bigger clubs, boosting their stock.
The trading scheme will operate for three years after which the new ratio will take effect. Government figures suggest an adult population of 319,000 in three years, allowing 4785 machines, or 189 fewer than existing numbers. Ms Burch said if numbers outstripped the cap when it begins, she would compulsorily acquire machines from clubs to bring the total down.
But if clubs have been able to buy up licences from hotels and pubs and smaller clubs in the meantime, they will have a buffer to offset any losses in any compulsory acquisition.
More than three-quarters of Canberra's poker machines are concentrated in a few big clubs: the Tuggeranong Rugby Union Club (704 machines), the Southern Cross Club (680), the Labor Party-owned Canberra Labor Club (488), the Raiders Group (481), the Ainslie Group (423), the Tradesmen's Union Club (400), the Eastlake Group (363), and the Hellenic Club (294).
Some small clubs have underused machines making very little money. The Spanish Australian Club, for example, has 14 machines, making a net profit of just $900 from each of them. The Australian Croatian Club (13 machines), the Canberra Racing Club (14), and the Federal Golf Club (9) are among others in a similar position. That compares with a net profit of about $21,000 a machine for most of the big clubs, and $29,000 for the Labor Club machines.
If big clubs can buy up the underused pokies they will be able to turn much bigger profits on them.
Clubs ACT chief executive Jeff House said he hoped smaller clubs would use the opportunity to sell their machines and operate successfully without.
But he stressed no club would be able to buy extra machines without the approval of the Gambling and Racing Commission.
When asked about concerns that most of the extra money gambled would come from problem gamblers, Ms Burch insisted the overwhelming majority of people using machines were "very responsible".
And on why she had made the change without announcing it and just three days before Christmas, Ms Burch said it had been on her agenda and had simply been a matter of "clearing my desk towards the end of the year".
She said while there was no limit at the moment on the number of $50 notes people could feed in, she was looking at whether to impose one.
