ArticlesCrime and corruption
|Getting addicted: A diverting tale of governments and gambling|
|Having had a hand in exposing gambling related corruption and authoring reports on gambling, Phil Dickie is well placed to provide a somewhat tongue in cheek overview of the history of gambling regulation in Queensland.|
|It is not known if the original inhabitants of Queensland had any tendency to overindulge in games of chance. But every other nationality and ethnic flavour to arrive here has.|
Few issues have been as controversial for as long - gambling has, for instance, been the entire subject matter or a large lump of the subject matter of about three quarters of all the Royal Commissions and judicial inquiries ever called in Queensland.
Governments would no doubt prefer that the debate on gambling had all the depth of the annual discussion of the rights and wrongs of returned servicemen being able to play two-up on Anzac Day. But sadly, it has never been that simple.
The first and major requirement was the need to placate a noisy moral lobby, with the result that all gambling was technically illegal until 1889, when the government recognised that a machine and/or method called the tote had been in existence and in operation for nearly 20 years. In 1892, the government belatedly realised there was a buck to be made in gambling and whipped through a Totalisator Tax Act. A precedent of much import was set in this early grab for revenue.
The move was naturally much condemned by those seeking temperance or quite often, abstinence from all earthly pleasures. What government was doing was learning to walk the high wire of hypocrisy. Bookmakers, around since at least the first organised race meeting at Coopers Plains in 1843 didn't achieve any recognition in law until 1923. But the bookmaker catering to the gentry in a designated area of a racetrack or in a city club like Tattersalls was tolerated - the bookmaker taking the wager of the working man either paid the police or was run in by the police. And in times of high moral panic, a previous good payment record could be no help at all.
Corruption is only one issue arising from laws that are widely and enthusiastically disobeyed. Another is the opportunity for highly discriminatory enforcement - of the 105 people arrested for gambling offences in 1877, 100 were Chinamen caught playing FanTan.
George Adams of the Sydney Tattersalls Hotel brought the lottery to Queensland in 1892, while on the run from NSW authorities. The legislature sent him on his way on a circuit of other States with a Suppression of Gambling Act in 1895. Adams eventually settled in Tasmania and frustrated State authorities by using the mails. The Queensland government set up the first State-sponsored lottery, the Golden Casket, in 1916. In concept this was almost identical to the Adams operation, but apparently involved none of the moral risk. It probably helped that it was for the Patriotic Fund.
The often murky interplay between politics, policing, gambling and business are probably best illustrated by reference to John Wren, the man on whom the novel Power Without Glory was modelled. Wren made his first pile with the Collingwood Tote, a wholly illegal and highly successful gambling den in 1890s Melbourne.
Wren came to Queensland in 1909 and bought a racetrack or two and, later, a newspaper, the Daily Mail, intended to knock the Moreton Bay Courier out of its position of power and influence.
Wren's racetracks - at Kedron Park and Doomben - were unruly affairs. A royal commission was called after the death of a number of jockeys, but Wren had powerful Labor connections and all that came of it was a recommendation on the minimum radius of turns.
This didn't allay the opposition, not least from the Queensland Turf Club, so overnight the Brisbane Amateur Turf Club was born, and although it had no visible means of support, managed to buy Wren's racetracks. A Royal Commission, called when Labor lost office, tended to the view that Wren had sold his racetracks to himself and he was compelled to amend the sale agreement and give the BATC an independent existence. The government obliged the Queensland Turf Club and banned unregistered racing altogether.
Wren is widely believed, even by sympathetic biographers, to have bought a sudden vacancy in Federal Parliament for former Queensland Labor Premier Ted Theodore. His Daily Mail eventually merged with its opposition to become the Courier-Mail, an ancestry now not much celebrated down at Queensland Newspapers.
The victory of the principal racing clubs was short lived however. The spread of telephones and radios gave new impetus to the illegal bookmaking industry, now operating on the starting price, not the totalisator model. Allegations that police were more than just tolerant of the illegal bookmakers resulted in another Royal Commission being called in 1936. It reported that there were 749 illegal bookmakers, operating out of 205 hotels, 117 billiard rooms, 196 barber and tobacconist shops and 156 other premises.
The "other premises" were mainly betting shops operated on the side by registered bookmakers. Agents of the royal commission visited one in north Queensland and found it was standing room only for the 200-300 punters.
The key to such enterprises was getting the information from inside the racetracks to the outside bookmakers. One avenue, a Queensland government owned radio station (now 4QR) eventually stopped broadcasting races after repeated complaints from the Commissioner of Police.
The mainstay of the industry then became the pricing service. The Royal Commission heard from a Mr Charles Bonham whose annual telephone bill for servicing the 169 subscribers to the South Coast Press Agency was the then astronomical sum of 11,000 pounds. He had little apparent knowledge of who these subscribers were, but said he was helping to keep the industry clean.
Two of the three commissioners recommended more enforcement on the betting evil, restrictions on the release of information from the racetracks and a ban on Mr Bonham's cleanliness campaign. The then Police Commissioner C.J. Carroll, an unusually honest sort, made the radical suggestion that perhaps facilities should be provided for off-course betting.
If the SP betting mania subsided during the war, it was only because many of the racetracks in Queensland became covered with the tents of the military. But the influx of Yanks - said to be "over-sexed, over paid and over here" - also created a massive increase in demand for the gambling services provided by the owners of gambling machines and card playing venues.
Gambling - or fruit - machines had been around for quite some time as a wholly illegal installation in hotels, barber shops and other preferences. There was even an Australian manufacturer, the quaintly named Nutt and Muddle company of Sydney, later to be joined in the 1950s by another company, Ainsworth, which diversified out to dental equipment manufacturing. Sydney businessman Jack Rooklyn emerged during the war as a major importer and operator of American fruit machines.
But after the war, the following of horseflesh remained the dominant mode of gambling and the major preoccupation of government. Another Royal Commission was called in 1951, this time to "inquire into whether it is desirable to make legal the method of betting and wagering commonly known as off-the-course betting".
The Commission found that newspapers and others had found "astute" methods of circumventing the ban on releasing racetrack information and that most of the information came from the South Coast Press Agency - now operating from a concrete fortress in the basement of an inner city private hotel.
Agency owner Mr Black was called to the stand and discovered to be Mr Bonham. Unfortunately he fell ill and could not complete his testimony. Manager Mr Black (jnr) did not know the source of the information his staff processed each race day. The service promptly lost at least two subscribers - The Courier-Mail and the Telegraph.
The Commission recommended for allowing bookmakers to operate off track, providing they didn't do so in Brisbane, Ipswich, Toowoomba, Warwick or Rockhampton. The government opted to allow bookies to operate off track if a local referendum approved. No noticeable reduction in SP bookmaking occurred.
There are reasonable grounds for suspicion that no effective action on SP bookmaking was ever intended. The Fitzgerald Inquiry was later to hear that country SP bookmakers in particular were major subscribers to what was colloquially known as "The Premier's Fund" which was collected by ministerial staffers complete with police escorts. Other statements indicated that police had their own individual relationships with bookmakers, both legal, illegal and in many if not most cases, both.
Labor's long reign ended in 1957. The new Country-Liberal Party government were advised that their choice of Police Commissioner, Frank Erich Bischof, had a continuing taste for corruption developed during the war years, but appointed him anyway. The honest candidate on offer was a Roman Catholic.
A deputation of western SP bookmakers approached Treasurer and Racing Minister Thomas Hiley out of the blue in 1961, to complain that the police under Bischof wanted a second bite at an existing arrangement - no prosecutions for a fee that amounted to the equivalent of $80,000 for a major town down to $20,000 or so for the rights to a collection of railway sidings. Hiley sought volunteers for the witness box and was told "Mr Hiley, we'd be dead, we'd be dead."
Hiley, no fool, was already aware that although police were much given to staging raids on bookmakers they had little success in apprehending any bookmaker of note. He put out the feelers and soon discovered that Bischof - salary of $24,000 in the current money - was regularly laying out $4000 at race meetings. If his horse came home, Bishchof's name went into the books and if it didn't the loss was marked out to a Mr Baystone. None of the registered bookmakers were prepared to mount the stand either.
Bischof was called into a meeting with the Premier, Hiley and the Police Minister and confronted with the evidence. He fell apart and indicated some willingness to fall on his sword, only to be told simply that "You started all this, you stop it." Hiley established the TAB in 1962. The Premier, "Honest Frank" Nicklin, established a Royal Commission in 1963 which found Bischof not guilty of other allegations of corruption and after-hours drinking and he continued in office for a further six years.
Although the TAB made some inroads on the business, the SP bookmakers continued to flourish under "The Joke" a police protection racket quite independent of any arrangements the higher ranks had in place. According to Constable Jack Reginald Herbert, who kept the books, most of this money was divvied up within the Licensing Branch, with a small honorarium going to close Bischof associate Sergeant Terry Lewis down at the Juvenile Aid Bureau. In the early 1970s, Herbert was on a police salary of around $350 a month and was getting $800 a month in bribes.
The other social evil that police seemed unable to deal with were the baccarat clubs, later to evolve into illegal casinos where the preferred games were blackjack and manilla. Many of the gaming entrepreneurs were also entrepreneurs in other vices, but one entered into a gaming machine franchise arrangement with Jack Rooklyn - then in strife over Mafia links and unusual business relationships with police ostensibly investigating him.
To the Queensland government, poker machines were a reviled southern evil with considerable moral risk attached - an attitude that made Tweed Head clubs the largest and richest in the land. Accordingly, the Robinson/Rooklyn strategy was to bring into the State a primitive gaming machine that could be, if subjected to highly casual inspection, be passed off as an amusement machine. The franchise was a good one - Rooklyn later took it over himself.
In-line machines were soon being installed all over the place, but finding a particular home in registered clubs. A parliamentary committee, which included the former police officer Don "Shady" Lane, was commissioned to examine the issue. It put all knowledge of the Rooklyn connection to one side and recommended that the machines be permitted only in clubs and set a scale of licencing fees which no sane business entity would be prepared to outlay for a mere amusement machines. Hypocrisy was the real bottom line here. Franchise employee Jack Herbert - who had left the force on being expelled from the Licensing Branch - later told the Fitzgerald Inquiry he had handed Rooklyn's money to Lane, Police Commissioner Sir Terence Lewis and other police. Lane later put the difference between his income and his expenditure down to fiddles on ministerial expenses and went to jail for that.
While Rooklyn lobbied and paid to keep poker machines out of Queensland, the poker machine lobby - actively funded behind the scenes by major poker machine manufacturer Ainsworth - lobbied to get them in. One battleground was for control of the Registered Clubs Association but another was the political parties, with the Victorian ALP receiving large donations under the heading of research and the Queensland ALP issuing invoices - drafted by the lobby - for hugely expensive advertising in party rags. The Queensland ALP declared itself for poker machines in 1980 but didn't come close in the election.
Queensland's first batches of poker machines arrived in 1983, along with its first legal casino. The morals lobby, the most dominant force in the early days of gambling regulation, was now on a hiding to nothing. The problem of problem gambling started to become an emergent, replacement issue. Also increasing was the proportion of State revenue now coming from a flutter here and a flutter there. New proposals for casinos were being floated, the Golden Casket and TAB considered and created new product lines, and charity bingo halls proliferated. In one surprise development, private enterprise was allowed in to flog lottery type products in direct competition to the government enterprise long ago set up to fund the Patriotic Fund. George Adams had been allowed back into Queensland.
Throughout it all, the SP industry continued to thrive - until the Fitzgerald inquiry which had some origins in media scrutiny of the relationship between illegal casino owners and police suddenly burst on the scene.
The inquiry managed to procure Jack Herbert from hiding in London and convince him to spill the beans. The SP bookies had only been under pressure during the seventies, starting when honest commissioner Ray Whitrod had removed Herbert and others from the licensing branch. Herbert and his colleagues had managed to prosecute just three bookies in the previous four years; the new team rounded up 17 in their first three months. Later, Herbert, a bookie and a police officer were charged with trying to corrupt the fairly rough and ready new head of the branch but managed to get off when they got a junior Licensing Branch officer to record his superiors planning the verbal in the evidence against another pair of bookmakers. A subsequent judicial inquiry recommended that no officer should stay very long in the Licensing Branch; a practice grew up where the straight ones got shifted out as per the policy and the crooked ones were promoted out and transferred back in at their new higher rank.
Whitrod fell foul of the union with his anti-corruption campaign and Premier Bjelke-Petersen listened more to the union than he did to his police commissioner. Junior Inspector Terry Lewis, in exile at Charleville, recorded the most meteoric rise in police history to become commissioner in 1976. The minutes of the Cabinet meeting that ratified the appointment could not be located by the Fitzgerald Inquiry.
Lewis appeared to start out well, giving the Licensing Branch to a Whitrod loyalist and telling another "The government has given me a car, a good salary. I don't need to be involved in anything else." The branch took the sledgehammer and blowtorch to the illegal casinos in the Valley and took to the SP bookmakers with enthusiasm. But not for long - most of the team soon found themselves in the frame for allegedly misusing informant money and then on postings to far-flung corners of the State.
Lewis had discussions with Herbert about the replacement Inspector, but the nominee turned down the invitation to look after selected SP bookmakers. Another, more amenable officer was quickly found and the Joke, Mark Two took off. Herbert told the inquiry that Lewis was already on the Rooklyn payroll anyway. When the inquiry was announced an estimated $56,000 a month was flowing through Herbert's books on its way to the Commissioner, an Assistant Commissioner and numerous others. And that was just in Herbert related rackets - the inquiry heard some evidence and many hints of other schemes.
Sir Terence appears not to have been told about Mr Bischof and Mr Baystone, or if he had, he'd forgotten the lesson. Scrawled in the back of his diaries in the curious child like hand were details of meetings, horses and amounts. Sir Terence, who told Fitzgerald he was not much interested in the neddies, was an 88 percent successful punter.
Gambling, and its regulation, considerably exercised Commissioner Fitzgerald's mind in framing his report. He passed the buck for coming up with specific recommendations to the Criminal Justice Commission and cautioned that "Until a comprehensive review is undertaken, narrowly focussed piecemeal action including expanding the legal means of gambling is inadvisable."
No-one much was listening in the political arena. When they went down the Nationals had on the books draft legislation to introduce gaming machines that were on no account to be called poker machines into clubs. Labor had maintained a policy favoring poker machine introduction but quietly shelved their previously announced intention to have an inquiry about it first and proceeded to adopt the Nationals draft legislation so as to have the machines up and spinning in the pubs and clubs within months of their election. A hurried and controversial Criminal Justice Commission report - written by this writer - held up the introduction for more than a year.
Gambling statistics clearly show that the introduction of poker machines closely correlates with dramatic increases - sometimes up to a near doubling - of per capita expenditure on gambling. It is hardly surprising then, that the central issue surrounding gambling is now one of welfare. A new - and very telling comment is emerging - Australia's worst gambling addicts appear to be its State governments.
Most States are now making noises about curbing the growth in the number of machines, although on closer analysis there is much more talk than action and brave statements of intent have been dramatically wound back in practice after the hotel and club lobbies get to work.
For the first time in a long time, an Australian government has taken a stand against an expansion in legal gambling - the Federal government initiated a damning inquiry into gambling which pointed a lot of fingers at their State colleagues and has since legislated, quite possibly ineffectually, to restrict internet gambling.
One encouraging feature is that Australia now has world leading gambling researchers on the job. One interesting trend - which we can expect to hear much more of - is that gambling seems to have some very adverse and perverse effects on local and regional economies in particular.
And as for the SP bookies - excuse me, I'll just take that call.