JohnM wrote:
http://www.theage.com.au/afl/afl-news/pokies-deal-sparks-afl-clubs-feud-20100512-uy3z.html
The upshot of the story is that many Victorian-based AFL clubs just had a big windfall from the State Govt's pokies auction.
Bulldogs took the low-risk option and bid high for their 50+ machines, paying an average of $60,000 per machine.
Collingwood did a little of both, and bought some of their pokies at the high-end of the spectrum, and the rest for only $5,500 each.
Hawthorn scored a hundred pokie machines for the base price of $5,500.
Carlton purchased more than 260 pokie machines all at $5,500, spread across 4 venues (courtesy of Bruce Matheison). Based on estimated average returns per machine, these machines will eradicate our entire debt inside of a decade.
I hate the things myself. But you can't argue that they're an exceptionally good investment.
This doesn't seem to make sense as $5,500 was the cost of a machine not including the necessary 10 year operating licence to operate it.
If clubs just paid $5,500 I would suggest that would be to use the new machines with existing operating licenses. It was the licences that were auctioned, machines were available to all at a fixed price of $5,500.
Absolute windfall for all purchasers and a disaster sale for the state govt. as the machine licences went at more than a $1 billion under expectations due to over supply.
ALH + Bruce Matth the biggest winners
But here is the relevant maths
Machines cost $5,500 each
10 year operating licence for the machines acheived $66k/avge ($6,600/yr) at the auction.
Average machine gross profit in Vic ATM is $96k/year, which is split 50/50 with the state govt.