Monday, October 13, 2003
The triumph of the will of George Adams – the Tattersall's secret empire
Wacky bequests – multi-million dollar trusts for the upkeep of a favourite cat, and the like – is something of an English speciality. In Australia, the beneficiaries of a wacky will are more likely to be fat cats of the human variety.
George Adams (1839-1904) was a gambler turned gaming industry magnate. His knack was to turn Tattersall's – originally a private (members only) gambling club – into a pari-mutuel outfit open to all comers. Unlike bookmakers, and even casino operators going through a statistically abnormal bad batch, operators of pari-mutuel gambling do so on an utterly risk-free basis – as long as there is a cake, their cut of it is assured, and payouts to punters can only be out of what remains.
Correction 14 October 2003. Tattersall's 19th C sweeps, although based on horse race results, were not “pari-mutuel”; rather they seem to have been (also operator risk-free) conventional lotteries, with the winning horse’s number standing in for today’s plastic ball number. Thus, winning was a matter of pure chance (and so fixed-odds), while pari-mutuel betting offers varying and floating odds.
Oh, and after government taxes have taken their cut, too. Perhaps surprisingly, late 19th century colonial governments did not immediately embrace George Adams's burgeoning business. He was run out of New South Wales, found temporary jurisdictional refuge in Queensland and then Tasmania, before finally finding a warmer set of palms to grease within the state of Victoria.
Correction 14 October 2003. As last night’s “Four Corners” made clear, while George Adams was indeed run out of New South Wales (in 1892), he received a warm and lasting welcome in Tasmania, before his estate’s business domicile, and so tax base, was poached by state of Victoria in 1954.
Which state and Tattersall's have ever after remained the closest of friends and business acquaintances. In the ninety-nine years since George Adams’s death, Tattersall's has made few adjustments to its business model. Long ago, its original monopoly over pari-mutuel betting on horse-racing was handed over to a Victorian government authority, since privatised, and now known as Tabcorp.
Correction 14 October 2003. As noted above, Tattersall's sweeps, although based on horse race results, were not pari-mutuel, or totalizator, based. Victoria’s TAB was only established in 1961, by which time Tattersall's sweeps had become modern lotteries. In the late 19th and early 20th centuries, John Wren built an illegal gaming empire based on pari-mutuel betting – just prior to the Australian invention of the automatic totalizator in 1913.
Most notably, in recent years, Tattersall's and Tabcorp were handed the master-license for all of Victoria’s poker machines. Again, this was a business coup true to the spirit of the late George Adams – a risk-free licence to print money ($6bn in 2002), albeit sharing it with one other (a long-time cosy “competitor”, at that).
Left unchanged for the last ninety-nine years is the basic legal structure of the Tattersall's empire, post George Adams’s death. As a private trust, the business reverted to the secrecy of the private club Tattersall's originally began as, before big George took the whole show to the masses. Although a corporate shell (actually two – Tattersall's Gaming Pty Ltd and Tattersall's Holdings Pty Ltd) has been overlaid on the business, so as for it to be capable of holding a gaming licence, the owners of the cash-cow business are not shareholders of either company. As beneficiaries of a private trust, the owners’ identities are regarded by law as nobody’s business – unless and until the reciprocal relationship between owner and manager (beneficiary and trustee) breaks down.
Amazingly enough, judging by this story in today’s Herald-Sun (as well as promos for a “Four Corners” story to air tonight) at least some of the Tattersall's owners have decided to disturb the longstanding cosy club. I say “amazingly”, because even though the trustees’ alleged failure to inform the beneficiaries of their remuneration is clearly a legitimate grievance, killing the goose that laid the golden egg must be a distinct medium-term risk. According to one dissident beneficiary:
Publicly listing the company "would make it more accountable to the Victorian public (and) stop it from being run like a secret society. The current structure isn't in the best interests of the company and the community."
Err, actually I think you might find that “the best interests of the community" would be served – if not by trucking away every last poker machine in the state to the scrapyard – by granting the licenses (due for renewal in 2012) only in exchange for 99% of their value being returned as taxes to the state. In other words, the licences should not be handed out on a “to print money” basis, but only in return for work to be actually done. Which leaves nix for free-riding beneficiaries, as well as their even fatter-feline trust managers, of course.
And calling for the Tattersall's trust to be publicly listed, as the dissident beneficiary goes on to do, is surely a big gamble – and gambling is something that none of the beneficiaries, or their well-paid trustees have ever been called upon to do. The more light that is shone upon the yellowing will-paper of George Adams, the thinner their – and/or anybody else’s – claims to a share from a golden goose will be. If it is the Tattersall's beneficiaries who are the ones that bring the end to this Havisham-esque relic, then the sight of George’s will (and the bloated empire that it has carried to this day) turning into dust will be all the sweeter.
Update 14 October 2003
Excellent “Four Corners” last night. The post-show forum is well-worth trawling through, but as it’s a pain in the arse to navigate, I’ve taken the liberty to put up a few gems, below. Highlights: (i) it seems that many (if not most) of the beneficiaries are Tasmanian “old money” (insert own joke here), and (ii) the comments of a beneficiary, “Peter”.
-----------------------------------------
From: Ormond 13/10/2003 10:00:25 PM
Subject: re: secret beneficieries nonsense post id: 212
Anecdotally, I can support the assertion that the pokies have greatly increased the income some of the beneficiaries are receiving.
In Tasmania, one pastoralist (who married a beneficiary) has had his Tatts dividend increase from $200,000 p.a. to $2M p.a. This has permitted him, naturally, to buy up more than 50,000 acres in the last three years alone.
The assertion that Tattersall's is a great philanthropic company is absolute rubbish. Talk about spin. All the money taken from the suburban poor is being transferred to the clapped-out, fly-blown "old money", much of them in Tasmania.
ABC Stateline in Tassie recently did a piece on one mob of beneficiaries, the Harvey girls who have "worked hard" to buy back the old family farm east of Oatlands in the midlands of Tasmania.
From: kenneth 13/10/2003 10:13:16 PM
Subject: re: Tatt's economic arguments are false post id: 294
Arguably an unproductive dollar out of the hands of many is a productive fortune in the hands of a few. That was one of the rationales for the government imprimatur for tatts in Tasmania to begin with - creation of wealthy people who would invest in the growth of a new city. Of course, the moral issues that we see with addiction are odious.
From: peter 13/10/2003
Subject: re: Such genorisity post id: 260
How can you say that so glibly? I am a beneficiary and a bit of that money comes out of my income.
I DO NOT begrudge it one bit - I am proud to be connected with Tattersalls and I support their charitable activities wholeheartedly.
From: peter 13/10/2003 11:02:08 PM
Subject: re: Such genorisity post id: 447
Rich (with sarcasm)KarenP, does any business that makes a profit have this "licence to print money"? Your response is patronizing and thoughtless - there were many good reasons why Tatts was invited to provide this service to the people of Victoria but you countenance the existence of none. Was it Tatt's responsibility to refuse the offer - if a "public company " board had done so they would have been sacked forthwith, and rightly so.
From: peter 13/10/2003 11:04:36 PM
Subject: re: Such genorisity post id: 448
Include yourself in that reaping - by far the larger part of the misery reaping goes back to you, citizen of Victoria. Show your mettle and refuse any and all services provided by government.
From: peter 13/10/2003 11:55:48 PM
Subject: re: Such genorisity post id: 468
Ok, as long as all of you that have anything inherited do the same. Maybe James Packer should start the ball rolling.
From: peter 13/10/2003 11:53:13 PM
Subject: re: Benefits of gambling post id: 467
I blew my entire pay for ten years on a business that failed, even though I followed all the best advice available. They say that most new businesses fail - shouldn't we have a failed business's anonymous?
----------------------------------------------
In summary, then, "Peter" is a handy, complete case-history of the fact that the beneficiaries are (i) parasitical weasels and (ii) shithouse entrepreneurs themselves. The fact that most (?) of his ilk are rural Tasmanians, and so semi-invisible, just makes it worse. It also throws an interesting new light, for me, on the sad case of one particularly fucked-up Tattersall’s beneficiary, Tasmania's Martin Bryant.
##
Man takes “service desk” literally . . .
. . . and dies of a heart attack for his trouble.
Wacky bequests – multi-million dollar trusts for the upkeep of a favourite cat, and the like – is something of an English speciality. In Australia, the beneficiaries of a wacky will are more likely to be fat cats of the human variety.
George Adams (1839-1904) was a gambler turned gaming industry magnate. His knack was to turn Tattersall's – originally a private (members only) gambling club – into a pari-mutuel outfit open to all comers. Unlike bookmakers, and even casino operators going through a statistically abnormal bad batch, operators of pari-mutuel gambling do so on an utterly risk-free basis – as long as there is a cake, their cut of it is assured, and payouts to punters can only be out of what remains.
Correction 14 October 2003. Tattersall's 19th C sweeps, although based on horse race results, were not “pari-mutuel”; rather they seem to have been (also operator risk-free) conventional lotteries, with the winning horse’s number standing in for today’s plastic ball number. Thus, winning was a matter of pure chance (and so fixed-odds), while pari-mutuel betting offers varying and floating odds.
Oh, and after government taxes have taken their cut, too. Perhaps surprisingly, late 19th century colonial governments did not immediately embrace George Adams's burgeoning business. He was run out of New South Wales, found temporary jurisdictional refuge in Queensland and then Tasmania, before finally finding a warmer set of palms to grease within the state of Victoria.
Correction 14 October 2003. As last night’s “Four Corners” made clear, while George Adams was indeed run out of New South Wales (in 1892), he received a warm and lasting welcome in Tasmania, before his estate’s business domicile, and so tax base, was poached by state of Victoria in 1954.
Which state and Tattersall's have ever after remained the closest of friends and business acquaintances. In the ninety-nine years since George Adams’s death, Tattersall's has made few adjustments to its business model. Long ago, its original monopoly over pari-mutuel betting on horse-racing was handed over to a Victorian government authority, since privatised, and now known as Tabcorp.
Correction 14 October 2003. As noted above, Tattersall's sweeps, although based on horse race results, were not pari-mutuel, or totalizator, based. Victoria’s TAB was only established in 1961, by which time Tattersall's sweeps had become modern lotteries. In the late 19th and early 20th centuries, John Wren built an illegal gaming empire based on pari-mutuel betting – just prior to the Australian invention of the automatic totalizator in 1913.
Most notably, in recent years, Tattersall's and Tabcorp were handed the master-license for all of Victoria’s poker machines. Again, this was a business coup true to the spirit of the late George Adams – a risk-free licence to print money ($6bn in 2002), albeit sharing it with one other (a long-time cosy “competitor”, at that).
Left unchanged for the last ninety-nine years is the basic legal structure of the Tattersall's empire, post George Adams’s death. As a private trust, the business reverted to the secrecy of the private club Tattersall's originally began as, before big George took the whole show to the masses. Although a corporate shell (actually two – Tattersall's Gaming Pty Ltd and Tattersall's Holdings Pty Ltd) has been overlaid on the business, so as for it to be capable of holding a gaming licence, the owners of the cash-cow business are not shareholders of either company. As beneficiaries of a private trust, the owners’ identities are regarded by law as nobody’s business – unless and until the reciprocal relationship between owner and manager (beneficiary and trustee) breaks down.
Amazingly enough, judging by this story in today’s Herald-Sun (as well as promos for a “Four Corners” story to air tonight) at least some of the Tattersall's owners have decided to disturb the longstanding cosy club. I say “amazingly”, because even though the trustees’ alleged failure to inform the beneficiaries of their remuneration is clearly a legitimate grievance, killing the goose that laid the golden egg must be a distinct medium-term risk. According to one dissident beneficiary:
Publicly listing the company "would make it more accountable to the Victorian public (and) stop it from being run like a secret society. The current structure isn't in the best interests of the company and the community."
Err, actually I think you might find that “the best interests of the community" would be served – if not by trucking away every last poker machine in the state to the scrapyard – by granting the licenses (due for renewal in 2012) only in exchange for 99% of their value being returned as taxes to the state. In other words, the licences should not be handed out on a “to print money” basis, but only in return for work to be actually done. Which leaves nix for free-riding beneficiaries, as well as their even fatter-feline trust managers, of course.
And calling for the Tattersall's trust to be publicly listed, as the dissident beneficiary goes on to do, is surely a big gamble – and gambling is something that none of the beneficiaries, or their well-paid trustees have ever been called upon to do. The more light that is shone upon the yellowing will-paper of George Adams, the thinner their – and/or anybody else’s – claims to a share from a golden goose will be. If it is the Tattersall's beneficiaries who are the ones that bring the end to this Havisham-esque relic, then the sight of George’s will (and the bloated empire that it has carried to this day) turning into dust will be all the sweeter.
Update 14 October 2003
Excellent “Four Corners” last night. The post-show forum is well-worth trawling through, but as it’s a pain in the arse to navigate, I’ve taken the liberty to put up a few gems, below. Highlights: (i) it seems that many (if not most) of the beneficiaries are Tasmanian “old money” (insert own joke here), and (ii) the comments of a beneficiary, “Peter”.
-----------------------------------------
From: Ormond 13/10/2003 10:00:25 PM
Subject: re: secret beneficieries nonsense post id: 212
Anecdotally, I can support the assertion that the pokies have greatly increased the income some of the beneficiaries are receiving.
In Tasmania, one pastoralist (who married a beneficiary) has had his Tatts dividend increase from $200,000 p.a. to $2M p.a. This has permitted him, naturally, to buy up more than 50,000 acres in the last three years alone.
The assertion that Tattersall's is a great philanthropic company is absolute rubbish. Talk about spin. All the money taken from the suburban poor is being transferred to the clapped-out, fly-blown "old money", much of them in Tasmania.
ABC Stateline in Tassie recently did a piece on one mob of beneficiaries, the Harvey girls who have "worked hard" to buy back the old family farm east of Oatlands in the midlands of Tasmania.
From: kenneth 13/10/2003 10:13:16 PM
Subject: re: Tatt's economic arguments are false post id: 294
Arguably an unproductive dollar out of the hands of many is a productive fortune in the hands of a few. That was one of the rationales for the government imprimatur for tatts in Tasmania to begin with - creation of wealthy people who would invest in the growth of a new city. Of course, the moral issues that we see with addiction are odious.
From: peter 13/10/2003
Subject: re: Such genorisity post id: 260
How can you say that so glibly? I am a beneficiary and a bit of that money comes out of my income.
I DO NOT begrudge it one bit - I am proud to be connected with Tattersalls and I support their charitable activities wholeheartedly.
From: peter 13/10/2003 11:02:08 PM
Subject: re: Such genorisity post id: 447
Rich (with sarcasm)KarenP, does any business that makes a profit have this "licence to print money"? Your response is patronizing and thoughtless - there were many good reasons why Tatts was invited to provide this service to the people of Victoria but you countenance the existence of none. Was it Tatt's responsibility to refuse the offer - if a "public company " board had done so they would have been sacked forthwith, and rightly so.
From: peter 13/10/2003 11:04:36 PM
Subject: re: Such genorisity post id: 448
Include yourself in that reaping - by far the larger part of the misery reaping goes back to you, citizen of Victoria. Show your mettle and refuse any and all services provided by government.
From: peter 13/10/2003 11:55:48 PM
Subject: re: Such genorisity post id: 468
Ok, as long as all of you that have anything inherited do the same. Maybe James Packer should start the ball rolling.
From: peter 13/10/2003 11:53:13 PM
Subject: re: Benefits of gambling post id: 467
I blew my entire pay for ten years on a business that failed, even though I followed all the best advice available. They say that most new businesses fail - shouldn't we have a failed business's anonymous?
----------------------------------------------
In summary, then, "Peter" is a handy, complete case-history of the fact that the beneficiaries are (i) parasitical weasels and (ii) shithouse entrepreneurs themselves. The fact that most (?) of his ilk are rural Tasmanians, and so semi-invisible, just makes it worse. It also throws an interesting new light, for me, on the sad case of one particularly fucked-up Tattersall’s beneficiary, Tasmania's Martin Bryant.
##
Man takes “service desk” literally . . .
. . . and dies of a heart attack for his trouble.
