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Australia’s scourge: Churches win on gambling

Australia leads the world in gambling and churches are cashing in with tax-free gambling schemes. The Pope's picture was even placed at the entrance to welcome people to the gambling room of a Catholic club. However, when philanthropist David Walsh used his winnings to found Hobart's Museum of Old New Art he faced a tax bill of $37 million. Dr Max Wallace comments on secular and religious gambling.

Australia has set a world record: more than 80% of its adult population gambles, the highest rate on the planet. [1] And the huge gambling industry that fosters this habit has got a boost in its lobbying efforts from Australia's Catholic Church. In an attempt to block the government's proposed regulations on gambling, the industry had this flyer distributed at the end of 2011 to 2 million houses in constituencies held by members of the current government. [2] It features a Catholic priest who argues that gambling should not be restricted because that would "put people out of work and strip money from the charities and sporting groups that clubs support". He is argues that the fabulously rich Catholic Church should not have to fund its own charities, but should be allowed to profit from gambling.

One Catholic charity, established by a priest, owns and operates two inner city "pokie parlours". Poker machines have been called "one-armed bandits" because they prey upon the poor, taking advantage of unrealistic hopes and, in many cases, gambling addiction. These two Melbourne poker parlours alone take more than $3 million from their deprived neighbourhoods. [3]

A government commission found that one in six regular poker players are "problem gamblers" and the poker machines reap about 40% of their profits from these 95,000 desperate people. [4] These gamblers lose an average of $21,000 a year. That’s a third of the average annual salary. And each one of them is estimated to hurt between five and ten other people, including friends, family and employers. The cost of problem gambling to the community is estimated to be at least $4.7 billion each year. [5] 

Yet not only is the Catholic Church exploiting this human misery, it is also doing so tax-free.

Secular vs religious gambling
24 July 2012 

Dr Max Wallace, a director of  Australians United for Separation of Church and State (AUSCAS) said today it was ironic that successful Tasmanian gambler, David Walsh, has to go to the High Court to determine whether it is legal for the Australian Tax Office (ATO) to tax his winnings:
 
"If David Walsh had started a church and simultaneously engaged in extensive gambling, his winnings would not be taxable. All religious organisations that meet the modest requirements of the ATO concerning registration as a religion, are free to participate in gambling activity and their earnings are tax-exempt. This is because all religions are legally charities and as such have tax-exempt status. This extends to their gambling and other commercial activities."

Max Wallace pointed out the Catholic Church has been involved in gambling for generations through its bingo games. Their gambling activities now extend to many Catholic clubs with a significant number of  poker machines.
 
"In fact, in 2002, the then Catholic NSW member of the Legislative Council, Peter Breen, had written to the Pope to complain that His Holiness's picture graced the entrance doors to the gambling room at the Campbelltown Catholic Club, south of Sydney." It was later removed. Also, the Melbourne Herald-Sun of 28 May 2002 had reported on two city poker machine parlours run by Catholic priest, Father Joe Giacobbe [which have been netting more than $3 million a year]. Father Giacobbe was also reported as linked to the weekly racing form guide, Winning Post.
 
Max Wallace said: "It is not just the Catholic Church. On 2 February 1998 the Australian Financial Review reported that a commercial building destined to be the headquarters of the Queensland TAB was to be the subject of a long-term lease from the Anglican Church."

"In remaining secular, it looks as if David Walsh has backed the wrong horse. From a tax point of view, maybe it would have been better for David Walsh to build a cathedral rather than an art gallery with his winnings." 


Notes

1. "Australia in thrall of gambling mania", BBC News, 30 January 2007. http://news.bbc.co.uk/2/hi/asia-pacific/6313083.stm

2. "Pokie clubs play an ace in battle to prevent changes", Sydney Morning Herald, 7 December 2011. http://www.smh.com.au/national/pokie-clubs-play-an-ace-in-battle-to-prevent-changes-20111206-1oha5.html

3. "Melbourne priest's charity raising $3m from pokies", Herald-Sun, reposted by Catholic News, 28 May 2002. http://cathnews.acu.edu.au/205/147.php

4. "Gambling: Key points", Australian Government, Productivity Commission, 23 June 2010. http://www.pc.gov.au/projects/inquiry/gambling-2009/report/key-points

5. "Problem gambling", Australian Government, http://www.problemgambling.gov.au/impact/


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