The lure of a trip to Las Vegas on a poker machine manufacturer’s dime prompted the directors of a Sydney club to quietly update their travel policy to allow for their partners to travel with them and personal holidays to be added at members’ expense.
Hornsby RSL directors changed their travel policy just weeks ahead of the 2022 G2E gaming conference in Las Vegas, which two board members attended at the invitation of gaming machine manufacturer Konami in return for buying eight poker machines.
The G2E conference is a showcase of new gaming products held annually at The Venetian Expo in Las Vegas.Credit: Istock
It came into effect again the following year when another manufacturer, Aristocrat, paid for two directors to travel to Vegas and Nashville, with both trips costing the club more than $80,000, including partners’ airfares, personal travel extensions and fringe benefits tax for partner travel.
The revelations are contained in a motion to remove the directors of Hornsby RSL from office, which will be submitted by the club’s former chief executive, Mario Machado, at its annual meeting on Sunday. Directors will use the same forum to ask their 34,000 members to endorse the policy, saying the trips are a good use of member funds.
Machado, who resigned in August, said in a statement of reasons attached to his motion that the directors had given themselves the benefit without seeking the approval of members, and he no longer had faith in them to act in the club’s best interests.
“Having directors and their partners partake in these trips, fully paid for by the club, including trip extensions to destinations that have nothing to do with the purpose of running a registered club, does not offer any benefit to members or the club,” Machado wrote.
“I ask that members … consider if the current board, in introducing these ‘overseas travel policies’, have acted in the best interests of the club or themselves.”
Gaming machine manufacturers have long offered promotions to club directors and management to encourage them to upgrade their poker machines. The NSW government amended the law in 1993 to ban directors from accepting such trips unless they had an educational purpose, after which there was an explosion in the number of “study trips”.
Liquor and Gaming NSW committed in March last year to examine a number of those study trips to determine whether they fell within the law, following their exposure by the Herald. A spokeswoman said the agency continued to examine whether a range of practices by club staff fell within the law, including gaming machine manufacturer promotions offering free travel to club executives.
It issued Hornsby RSL with notices to produce documents in May and September in relation to the trips by its directors, but has not communicated further with the club.
A spokeswoman for Aristocrat said the company did not offer any poker machine purchase incentives for customers to attend G2E this year. Konami declined to comment.
According to Machado’s statement, Hornsby RSL paid an additional $20,000 to buy eight poker machines in 2022, with Konami throwing in an overseas study tour. The tour included the G2E conference in Las Vegas, with side trips to Los Angeles and Hawaii.
The machines would have cost $180,000 without the travel deal, and with the deal they cost the club $200,000. The club then paid $15,300 for the directors’ partners to accompany them.
Substantial liability
In 2023, Hornsby RSL paid $27,210 for two directors to take their partners on a study tour hosted by Aristocrat, which included the G2E conference and a side trip to Nashville.
The cost of partner travel exposed the club to a substantial fringe benefits tax liability.
The club’s directors said in a joint statement to members that the travel policy was updated to allow directors to take their partners on overseas trips in lieu of business-class tickets – which were more expensive than two economy fares – and this was done under guidance from ClubsNSW and in collaboration with Machado.
Several staff had also availed themselves of the new policy, the statement said.
“Gaming is the largest source of revenue and profit for our club and … having directors informed and educated on emerging trends in gaming is strategically important to the ongoing business unit performance,” the directors said.
“The board’s motivation, ambition and intention was to best manage members funds.”
The directors will ask members on Sunday to approve a resolution for directors to be permitted reasonable expenditure to undertake education “including but not limited to” meetings, study tours, seminars and trade shows and the attendance of their partners at such activities, “including the reasonable cost of accommodation for directors and their partner/spouses”.
Hornsby RSL now operates 397 pokies and is among the 45 most profitable clubs by gaming machine net profit in the state.
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