Part 3 of 70 — Chapter 1: Introduction
This article forms part of the serialised republication of Panthers, Passion & Politics – The Roger Cowan Years.
Because of Cowan’s deep involvement in the licensed club industry, the history of Panthers cannot be separated from the broader history of the NSW club movement..
Phil Bennett1 was an officer with the Liquor Administration Board2 for many years. He remembers some of the interesting episodes. He had first encountered Cowan in the early 1980s. When Treasury was pushing to use turnover as the basis for taxing poker machine revenue, it was Bennett’s job to sell the concept to the clubs. Until then, only gross revenue had been taxed. Bennett said:
The idea was to tax the money being spent by the gamblers — a turnover tax3 — taking it off the top. Roger had a great moral difficulty with this, and he was very vocal.
I wrote a whole lot of papers and reports, and had to present them to the industry. By then I was in the policy section of the Chief Secretary’s department. We used the analogy of liquor . . . Clubs were paying a tax on the purchase of their liquor — which is like a turnover tax. And I also brought out other examples. So, we were trotting out all these arguments, and Roger would come back to me and say ‘that’s completely ridiculous, and a false analogy’. And proceed to explain in detail why it was, and shoot all my arguments down in flames. There was one day I distinctly remember. I had put together this paper and sent it to him, and then we met to discuss it. We were sitting opposite each other in his office, talking about the issues.
Roger presented a different analogy. ‘Look, this is different to a liquor tax. If you go and buy a beer, you pay tax on it at that point. But then you go into the toilet, and you piss it up against the wall, and it goes down the drain — and it’s all over. With gaming machines, if you put on a turnover tax, you’re taxing me when I spend it now, and then I get my money back when I get a payout. But then, if I bet it again you’ll make me pay another lot of tax, and when I win again you’ll tax it again, and again, and again.’
He was right, but we were saying that’s the way all gambling is taxed. At the races, the punter is taxed out of the turnover tax. But it was very funny. He sat there, looked across at me and said, ‘well, the person who wrote this paper obviously has no understanding of the club industry.’ He knew very well that I wrote it.
Cowan does not remember being so tactless:
When Phil asked me to discuss turnover tax I was appalled, and my body language was probably negative. I was convinced that one day we would have higher denomination machines and a turnover tax would restrict the return that we could offer the customers. The turnover tax they were proposing was only 3% and that sounded small enough to get acceptance from the industry. But I was concerned it would stifle the growth and eventually it would be unfair to players. I believed that higher denominations would eventually be part of the gaming market — and that should mean offering higher returns to the player. I knew for example that there were machines in the casinos in Las Vegas paying the player 99% — not many to be sure, but it would be impossible to do that under a turnover tax.
A turnover tax would force clubs to have machines set to the lowest possible return to players, and yet, it would be highway robbery to introduce high denomination machines at less than say, 94% return to players.
So, what I was trying to convey to Phil was that they were not looking at the future potential of the industry.
I was so concerned that I called a special meeting of several of the larger clubs and made a presentation to them of the dangers of a turnover tax. It was a long battle and finally the government saw the point and withdrew the proposal. Even though I was probably seen as the leader of the push to have it withdrawn, I never felt any sense of resentment from the government or the department officers . . .
If it had been a Carr/Egan government, I might have been facing a Royal Commission inquiry much sooner.
Bennett says:
You always knew that Roger would speak out if he believed that something was wrong. And he did his research, so he always knew what he was talking about.
Researching this book, I heard many words used to describe Roger Cowan, both positive and negative.
In recent years some have sought to attach another label to Cowan — dishonest.
Barrister Terrence Lynch4 says that from the start, he never believed that the inquiry would find any type of dishonesty in Cowan’s behavior.
I really was very relaxed about the inquiry. If a man is a crook, you don’t get staff five and six years in retirement still volunteering their time to assist him.
Dishonesty was just not consistent with any part of my exposure to what that place was like. My impression of Panthers is of a very internally open organisation. There never seemed to be the sense that if you disagree with Roger, there was going to be any discomfort or risk in doing that. You can’t operate dishonestly in such an open environment. And then, that flowed down through the organisation. I got the impression that he expected those people to be equally open with their own teams.
The events of 2004 have left permanent scars on Roger Cowan. There is no doubt that he sees Panthers as his life’s work, something that he could take pride in on his retirement. In his mind, the Inquiry, and the attendant headlines and publicity, altered that. That Inquiry, and the circumstances surrounding the events leading up to it, is a story that certainly needs telling.
The real story here is the growth of Panthers from a near-bankrupt suburban club into a significant force within the NSW club movement — and how that success eventually drew it into complex and contested political terrain.
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- Phil Bennett worked in gaming-related departments within the NSW public service, including Treasury, the Liquor Administration Board, Casino Control and as Senior Policy Adviser in the Chief Secretary’s Department. In 1989 he established Phil Bennett Consulting, advising organisations in the gaming and liquor industries.
↩︎ - The Liquor Administration Board (LAB) has since undergone structural and naming changes. Its current successor body is the Independent Liquor & Gaming Authority (ILGA) of NSW.
↩︎ - A turnover tax is calculated on the total amount wagered rather than net loss. For example, if $10 is gambled and returns $100, and $40 of those winnings is wagered again, the tax applies to the total $50 wagered. For a fuller explanation, see The Impact of A Turnover Tax in Beyond the Book.
↩︎ - Terrence Lynch was a member of the legal team engaged to represent Panthers during the Inquiry. Senior Counsel for the Panthers legal team was Bernie Coles KC.
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Panthers, Passion & Politics - The Roger Cowan Years 