Tasmanian gambling monopoly deal 'uncompetitive', should be put to tender

The 1993 deal was done in secret by former Labor treasurer David Crean and was never put out to open tender. It granted the gambling giant an additional 15 years of monopoly, with the potential for another five. That means the arrangement stands until 2023, but the current Liberal government can flag in 2018 that it intends to end the exclusive deal.

The former head of Australian Competition and Consumer Commission (ACCC), Allan Fels, said he believed the arrangement was uncompetitive and disadvantaged taxpayers. "This tender has been for something like 18 years I believe, and that is ridiculously long for someone to be granted a monopoly," he said. "It certainly looks uncompetitive, it should be put out to open tender one would have thought.

"If the Government is putting a monopoly out for sale or lease, then it's important they get the best possible deal for the public, and they will get that if there's competition."

Professor Fels chaired the ACCC from its inception in 1995 until 2003. He said he hoped the current Liberal Government would choose not to continue the exclusive arrangement. "There's a really strong-looking case for putting it out to open tender, and in that case you are likely to get the best results for the public," he said.

Federal Group's Daniel Hanna said the company had millions of dollars worth of investments that could not go ahead unless the deal was extended. "We've already said that we have some significant investments, at least US$ 100 million investments that we would like to make in the future," he said. "The dilemma we have really is we don't have the certainty around our licenses to be able to undertake those."

The ABC contacted several people involved in the 2003 extension. One said that the advice from Treasury was to put the deed out to tender.

Another rejected that, and said Treasury were onboard and the exclusive deal removed the need for gambling advertising and provided a cap on the number of pokie machines. Professor Fels rejected that argument.

"Can you think of any industry in the world where you would justify a monopoly because maybe a few advertising costs are saved ... I can't," he said. "Putting it out to tender makes it much more transparent and open, just doing a contract behind closed doors is not a very good form of governing."

The State Government said it would "responsibly and sensibly" take time to consider its options.