7

A very good image

Located on a busy road in Sydney’s inner west, Wests Ashfield Leagues Club is a multi-storey concrete, steel, and glass edifice. It isn’t as grand as Canterbury League Club; there is not an ostentatious tropical garden complete with a waterfall and water jets outside, nor an oversized porte-cochère at the entrance. But it is just as huge and incongruous in the low-lying suburban streetscape, over-shadowing the footpath and the nearby Federation brick homes.

I enter the club through the large revolving front door, and sign in at reception. With some time to spare before I’m scheduled to meet the club’s chairman, Mike Bailey, I take a quick walk through the club’s poker machines.

They’re prominently positioned right by the foyer, visible the moment anyone enters. There are over 400 of them, occupying virtually the entire ground floor. From the ceiling hang chandeliers, brass lamps that look like bird cages, and large plasma screens displaying the jackpots on offer. Gentle lounge music plays through the speakers, a sickly sweet fragrance perfumes the air, and the lights are dimmed to candlelight mode.

Most of the poker machines look as if they’ve just rolled off Aristocrat’s or IGT’s factory floor. Some models seem very similar to the ones I saw at the G2E Asia trade event in Macau several months earlier. Around a quarter are being played on this Wednesday afternoon, mainly by pensioners.

As well as poker machines, there are also a number of electronic casino games such as roulette and blackjack. Players sit at one of 20-odd individual betting terminals facing the digital female dealers displayed on large flatscreen televisions who announce in a clipped, robotic voice the result of each spin or hand: ‘17 black … place your bets … 7 red … place your bets … 31 black … place your bets.’

I return to the foyer to wait for Bailey. When he arrives, he greets me warmly with a handshake. He is softly spoken, and in his simple black suit and with his clean-shaven face and neatly combed grey hair, he has the look of an old-school businessman.

Bailey leads me on a short tour of the club. We rush past the club’s poker machines before heading up to the second floor. It is crammed with a much broader range of facilities: a sports bar, café, two restaurants, and a small auditorium containing a stage, a laminated dance floor, and a few tables and chairs. At one point in time, Bailey says, the auditorium was used far more than it is today. ‘We used to have Saturday- and Friday-night shows with a band and the whole works. But these days, it doesn’t work that way. You just don’t get people through the door for that stuff anymore.’

The club’s annual report confirms what the abundance of poker machines and their prominent position in the club suggest: the main reason that people come through the door nowadays is to gamble. In 2014–15, poker machines accounted for 85 per cent — or $35.5 million — of Wests Ashfield’s total revenue of $42 million.

The financial reports of other clubs show similar figures. In 2014–15, poker machines accounted for $76.4 million of Canterbury League Club’s total revenue of $87.4 million; $52.1 million of Rooty Hill RSL’s $84.4 million; $96.1 million of Mounties Club Group’s $120.2 million; and $31.8 million of St Marys Rugby League Club’s $40.7 million.

These clubs are some of the largest in the country. But while smaller ones elsewhere in New South Wales and in other states may not have whole floors occupied by several hundred poker machines, nor record annual revenue in the tens of millions of dollars, they too depend heavily on gambling. According to the Productivity Commission, while Australia’s pubs, on average, rely on poker machines for 28 per cent of their total revenue, clubs rely on them for 61 per cent.

Wests Ashfield’s management quarters are located on the third floor of the club. Bailey kindly offers me refreshments as he directs me to take a seat in his office. It’s furnished with a large wooden desk, a glass cabinet, and a large wooden bookshelf, and is decorated with a plethora of sporting memorabilia — rugby league jerseys, rugby balls, cricket bats, and boxing gloves — signed by famous athletes.

Bailey’s involvement with Wests Ashfield stretches back to his childhood, when he began supporting the rugby league team affiliated with the club, Wests Magpies. He would regularly attend live matches with his family and visit the club afterwards. In later years, when he developed a large media profile as a TV weatherman, documentary producer, talkback host, and columnist for various newspapers, he became, he says, a ‘low-key ambassador’ for the club. In 2010, he became a board member, and a year later was elected chairman.

According to Bailey, the club is in ‘the business of entertainment’. It requires regular upgrades, he says, ‘because we need to constantly keep up with the changing market that does exist at the moment’. This is why a new café and restaurant are currently being constructed, and why the carpark was recently expanded to add an extra 350 car spaces for members. It is also why the club is planning a major refurbishment of its gambling facilities.

‘We have to be realistic enough to admit that people are not just coming to Wests Ashfield,’ Bailey says. ‘The reality is that they only need to go 100 metres down the road, and there’s at least a pub that’s offering gaming facilities.’

Bailey says the planned refurbishment of its gambling facilities will be extensive and will involve redesigning the whole ground floor, plus purchasing the newest poker machines on the market. ‘You can’t just put together a gaming floor and rub your hands together and say, “Right, we’re in business,”’ he explains. ‘It’s about looking at the changes taking place, because if we don’t look at the changes, somewhere down the road might. You really do have to be plugged into this. And while you and I don’t necessarily know the latest trends in gaming machines, the guy we pay to be in charge has to know that. He has to know what’s working at The Star [Casino] needs to be brought here. Or what’s working in Vegas needs to be brought here.’

I ask how much the refurbishment will cost.

‘Most of the refurbishments we’ve done amount to seven figures,’ Bailey says. He adds that, ‘It may well be that in ten years’ time we tear it all apart again and do something different, because you do have to move with trends.’

In Bailey’s eyes, there is something else that is as important as regular refurbishments for the club’s success. As he says, ‘It’s image that really sells in this business — and in businesses as a whole, when you think about it.’ He insists Wests Ashfield has ‘a very good image’ that it will maintain ‘to ensure that we are a respected organisation in the community’.

In the nineteenth and early to mid-twentieth centuries, clubs in Australia were very different from those of today. They were significantly smaller physically; contained no poker machines; survived mainly off membership fees, food and drink sales, and donations; and were mostly volunteer-run. All money earned was funnelled either into the community or into the sole purpose — such as the promotion of sport or supporting war veterans — for which a club had been established. They were consequently classified under law as not-for-profit mutual entities, exempting them from paying income tax on revenue generated from members.

Almost as soon as they were legally able to do so, clubs in New South Wales, and then later in other states, began operating poker machines. Over the years, they have come to rely on poker machines so heavily for a very simple reason: the revenue they generate is not only enormous, it is also very easy to earn. Aside from choosing which machines to buy and how to design a gambling floor, there is little that has to be done except to sit back and watch as the money rolls in.

Despite their massive growth since their inception, clubs are still legally classified as mutual organisations. But the benefit of not having to pay income tax on member-generated revenue — which, according to the financial statements of most clubs, constitutes the bulk of their turnover — is coupled with others. This is especially the case for clubs in New South Wales.

Clubs there enjoy a number of regulatory concessions that give them a competitive advantage over hotels. For example, while hotels are restricted to operating a maximum of thirty machines, there is no statutory limit on the number that a single club can operate. Hotels operating more than ten poker machines are also required to keep them in an enclosed room, while clubs are not.

New South Wales’ clubs also enjoy a reduced state tax rate compared to hotels for revenue they earn from gambling. Hotels earning between $200,000 and $1 million annually from poker machines are taxed at a rate of 30 per cent; those earning between $1 million and $5 million at a rate of 36 per cent; and those earning above $50 million at a rate of 50 per cent.

On the other hand, clubs in New South Wales that earn less than $1 million annually from poker machines pay zero tax, while those earning between $1 million and $1.8 million are taxed at a rate of 29.9 per cent on any amount over $1 million. Clubs that earn profits of more than $1.8 million annually pay zero tax on the first $1 million, 29.9 per cent on the profits between $1 million and $1.8 million, and between 19.9 per cent and 28.4 per cent on the profits above this bracket, depending on what their actual profit level is.

Clubs in other jurisdictions also enjoy benefits not afforded to their competitors, because of their reputation as community centres.

In Victoria, if clubs provide 8.33 per cent of their annual poker machine profits for community purposes, they are eligible for a reduction of 8.33 per cent on the gambling tax they pay to the state government. Community contributions, however, can include what most would consider standard operating expenses, such as wages and maintenance.

In Queensland, poker machine profits from hotels are taxed at a flat rate of 35 per cent, while the rate for clubs is commensurate to their annual profit. Those earning less than $114,000 pay no tax, while those earning over $16.8 million pay the maximum tax rate of 35 per cent. On top of this, only Queensland’s hotels pay the health-service levy.

Governments and the Australian public incur a great cost for the preferential tax treatment enjoyed by clubs. In her book Casino Clubs NSW: profits, tax, sport and politics, economist and former New South Wales treasury official Dr Betty Con Walker estimated that the total cost to the Commonwealth government in terms of income tax foregone because of the application of the mutuality principle to registered clubs was between $200 million and $600 million in 2006 alone. This estimate was based only on poker machine revenue. It would have been even higher, Walker wrote, ‘if other revenues were taken into account’.

In New South Wales, the tax concessions to clubs have cost the state $13.5 billion over 20 years. The tax concessions granted to clubs by the 2010 Memorandum of Understanding signed between ClubsNSW and the Liberal–National Party are expected to cost the taxpayer more than $500 million in foregone tax revenue by 2019.

In Victoria in 2015–16, money lost to poker machines in clubs totalled $896.8 million. Applying the tax concession that the state’s clubs receive, the state government forewent around $74 million in revenue.

The image that Wests Ashfield and other clubs in Australia project is that they are still — as they were from the very start — not-for-profit organisations that are the lifeblood of local communities, deserving of the many benefits they enjoy. This image is often projected in the form of large-scale advertising campaigns run by ClubsNSW. A recent one was entitled ‘Your Local Club’. Running between 2012 and 2014, it aimed to highlight the role clubs play in communities. ‘Giving is a part of who we are,’ was its slogan.

These campaigns are very expensive. According to Nielsen, ClubsNSW spent $1.7 million from August 2014 to August 2015 on advertising in main media.

Clubs also often receive free advertising from some politicians. For example, in October 2014, the then minister for hospitality, gaming and racing in New South Wales, Troy Grant, told state parliament, ‘Members on this side of the House understand very clearly that clubs are the lifeblood of New South Wales communities. They play such an important role.’

Bailey does not believe for one moment that the image Wests Ashfield and other clubs project is false or even exaggerated. To him, it is a true reflection of reality. ‘The number-one reason that clubs exist, of course, is community service,’ he says sincerely.

Leon Wiegard, the president of Community Clubs Victoria, tells me much the same. ‘Everything the clubs do is for the community.’

For Bailey, the community service that clubs provide is multifaceted. One part is providing members of the local community with a safe, comfortable, and well-facilitated space to socialise and to ‘break away from the hard core of real life’.

Wiegard echoes this, saying that the premises of the club ‘is an asset to the community’.

There is some truth in what Bailey and Wiegard say. The physical building of a club is an important community space, especially for elderly Australians, whose lives are often as idle as they are lonely, and especially for people living in regional areas where the opportunities for socialising, whatever one’s age, are severely limited — in some cases, limited exclusively to the local club. ClubsNSW’s Anthony Ball said as much when speaking to the ABC in 2016: ‘I think clubs are more important to regional areas than they are to suburbs and cities because they’re much more intrinsic to the way of life and they touch more people.’

But the tendency of clubs to orientate themselves around and depend so heavily on poker machines — a product that is not only incredibly harmful and demonstrably addictive, but also a solitary pursuit and mindless to play — raises serious questions. Are clubs serving the needs of their patrons and the wider community in the best and most responsible manner? Are they perhaps exacerbating — not reducing — feelings of social isolation, loneliness, and depression among certain segments of the population, especially the elderly and those living in regional areas? Should they be putting more effort into diversifying, reducing their reliance on poker machines, and introducing a greater number of alternative ways for patrons to ‘break away from the hard core of real life’ that are more nourishing, intellectually stimulating, and socially orientated?

Sociologist Geoffrey Caldwell pondered these questions several decades ago in his 1972 doctoral thesis on New South Wales clubs. He acknowledged that clubs do provide a valuable space for the community to gather in and important facilities for people to enjoy, but added that large clubs had too much of a focus on entertainment and leisure, and neglected self-development activities such as adult education, local drama performances, and musical comedy. He went on to write that new institutional leaders were needed to ‘decide the purpose for which these large clubs exist … My impression is that directors of large clubs are too often concerned with growth efficiency, the difficulties of handling unions and making larger and larger profits, without giving sufficient weight to wider purposes. I see them as community leisure organisations and, while club directors and secretary/managers recognise this purpose, it is sometimes lost in the day-to-day operation of the clubs.’

The recent experience of a person extremely close to me gives weight to Caldwell’s argument. My Pop lives in Grafton, a regional town on the banks of the Clarence River on the North Coast of New South Wales. He lives alone in the home he shared with my grandmother for over 60 years. Living by himself is hard. ‘Some nights, I think going fucking crazy, mate,’ he told me on a recent visit. ‘I wake up in the middle of the night and turn over and say, “Are you alright over there?” Fucking silly old bastard — she’s not here. It’s tough to take, I’ll tell ya.’

The single-storey Grafton District Services Club is like a second home to him; he visits most days of the week. It contains a restaurant and café, a bar, a large TAB, and over 50 poker machines. For a man of Pop’s age, it is practically the only venue in town he is able to visit.

Pop spends much time at the club playing poker machines. He doesn’t go ‘bloody stupid on them’ — he usually plays with no more than $50, betting a couple of cents a spin — but says there have been times when ‘I just haven’t been able to stop playing and have come out a fair way behind.’ Living on a meagre pension, these losses make life for the next week incredibly tough.

The main reason Pop visits the club is to socialise. ‘You’ve got to do something in your old age,’ he says. ‘You can’t just sit at home like a bloody sunflower, always watching the idiot box. You can, I suppose. Not much of a life though.’ And the main reason he gambles while there is that ‘just about the only thing to do at the club is play pokies — or drink grog.’

Pop thinks this is a ‘bloody shame’ — as he does the fact that there are so few other places where he can socialise. But he’s resigned to this less-than-ideal reality. ‘It’s just the way it is, I guess.’

Other people in Grafton share similar thoughts with me. Sixty-year-old Sue visits the club usually once or twice a week, but sometimes more frequently. Invariably, she plays poker machines while there. Her length of stay varies each time. ‘It just depends how lucky — or unlucky — I am, really,’ she tells me as I sit with her while she gambles on a poker machine at the club, betting $2 a spin. She is animated as she plays and talks to the machine, saying things like, ‘Oh cmon! Give me something.’

Sue says she doesn’t find playing poker machines at the club either fun or healthy. For her, it’s mainly ‘just a reason to get out of the house, to do something and socialise. That’s why most people are in there — especially the oldies.’ But Sue identifies another reason why she plays poker machines. ‘They’re addictive. You try, but sometimes you just can’t stop. A lot of people are addicted to them. God knows, I am.’ She says that she knows better than anyone ‘that you can get in a hell of a lot of strife with these machines’.

After an hour or so sitting with her as she gambles, Sue tells me she is going to leave soon. I ask where she’s going afterwards. ‘I’ll just go home, have dinner, watch some telly, feed the dog, then go to bed,’ she says with a shrug. ‘That’s about it, really.’

The second aspect of the clubs’ community service that Bailey highlights is their financial contribution to sports, charities, schools, hospitals, and other local organisations. Bailey believes that in doing this, clubs make up for the failures of governments. ‘We look after a lot of causes that both sides of politics will no longer look after, because over the past 15 to 20 years we’ve seen that contraction of the government in terms of social spending,’ he told me.

Again, there is some truth to what Bailey says. In 2014 alone, clubs in New South Wales allocated over $92 million in grants to community organisations.

By any measure, that’s a whopping sum of money. But context is important. What percentage of clubs’ total expenditure is spent on community projects and promoting their sole purpose? Is it enough for them to still be genuinely considered mutual, not-for-profit organisations?

In Casino Clubs NSW, Dr Walker provided answers to these questions in relation to eighteen of the largest clubs in New South Wales. Thirteen clubs that she analysed nominated sport as their primary purpose, but only nine of them disclosed information on their spending on sport. These nine clubs had an operating expenditure of $463 million. In total, less than $19 million — or 4 per cent — was spent on sport. Walker added that most of these funds went to the professional sports teams that the clubs were affiliated with, rather than community sport.

Walker also noted that donations to wider community purposes were, considering other expenditure, ‘minuscule’. In 2005, the 18 clubs had a total operating expenditure of just over $1 billion. Community support accounted for $14.2 million of this — 1.4 per cent of total expenditure. By way of comparison, Walker highlighted the fact that employment expenses accounted for 26.4 per cent of expenditure, property for 16.7 per cent, and ‘undetailed expenses’ for 11.5 per cent.

Walker was scathing in her overall assessment of these clubs: ‘While many small clubs are genuine “mutual” clubs run by volunteers, and whose activities are primarily concerned with sport or other social activities, there are a small number of big clubs that operate like casinos.’

Going by the recent financial statements of many clubs, it seems that little has changed in the decade since Walker published her book. In 2014–15, Wests Ashfield’s expenditure totalled $38.8 million. Of this, $1.1 million — or 2.8 per cent — was spent on ‘donations and welfare’, and $1.3 million — or 3.3 per cent — was spent on ‘football propagation’. By comparison, $4.2 million was spent on ‘entertainment, marketing and promotional costs’. After all expenses, the club recorded a net profit of $3 million.

In the same period, Canterbury League Club’s expenditure totalled $77.8 million. $1.1 million — or 1.4 per cent — was spent on ‘donations and sponsorships’, and $4.5 million — or 5.8 per cent — was spent on grants to sports teams. However, of these grants, $4 million went to the Canterbury Bulldogs, the professional NRL football team affiliated with the club, while the remainder went to ‘marquee player arrangements’, junior league, and ‘other’. A total of $27 million of the club’s expenditure went to ‘personal expenses’; ‘wages and salaries’ accounted for $19.6 million of this, while the category of ‘other associated personnel expenses’ accounted for $5.4 million. After all expenses, the club recorded a profit of $9.6 million.

A 2012 report prepared for UnitingCare Australia by Dr Charles Livingstone and colleagues from Monash University, which assessed poker machine expenditure and community benefit claims in forty-one Commonwealth electorate divisions, found that the low expenditure on community benefits is widespread. In Victoria, the claimed community benefits as a portion of total losses on poker machines were, on average, 2.4 per cent; in Queensland, 2.3 per cent; in the ACT, 6.6 per cent; and in New South Wales, 1.3 per cent. ‘The amounts expended on community benefit purposes appear to be large only if they are reported without reference to the total losses on poker machines in that location,’ Dr Livingstone and his co-authors wrote.

In Victoria, there is the added matter of clubs being allowed to claim operating costs of the venue as community contributions. The community benefit statements that clubs are required to submit each year show that these constitute the bulk of claims made by clubs. For example, between 2015–16, Club Laverton, owned by the Carlton Football Club, claimed $1.2 million in community benefits, $1.1 million of which went to operating costs. The Abruzzo Club claimed $1.1 million in community benefits: all of this went to food and drink subsidies, capital expenditure, and operating costs, with zero being spent on community donations. The Brunswick Club claimed $191,429 in community donations. Donations, gifts, and sponsorships accounted for $9,640, operating costs for $178,789, and auditing expenses for $3,000.

It’s difficult to reconcile this evidence with the not-for-profit image that clubs project of themselves, as it is with the fact that the executive management of some clubs earn six-figure salaries — for example, in 2010, the chief executive of Penrith Panthers club earned more than $500,000.

But there is one incident that best typifies the disparity between the reality of many clubs and their public image.

During the devastating bushfires that swept through the Blue Mountains in the summer of 2001–02, Penrith Panthers club provided food, water, and accommodation for volunteer firefighters. The club also donated $25,000 to the fire victims’ appeal, with club officials posing for photos as the cheque was handed over.

In 2003, journalist Mark Day of the Daily Telegraph discovered that the club had invoiced the Rural Fire Service for $240,000 for that emergency. ‘Now I don’t say that Panthers should not have been paid for the services they provided throughout the crisis,’ Day wrote, ‘but I do say this case illustrates that Panthers, like most big clubs, is first and foremost a business. Dollars, cents and the bottom line come before warm and wonderful community projects.’

In its 2010 report about the gambling industry, the Productivity Commission assessed the community value of clubs and whether the concessions afforded to them are deserved. While acknowledging the highly valued role of clubs in communities, the commission found that ‘the (gross) value of social contributions by clubs is likely to be significantly less than the support governments provide to clubs through tax and other concessions’, and said there were ‘strong grounds for these concessions to be significantly reduced’.

The Henry Tax Review of 2010 went further. ‘Where not-for-profit clubs operate large trading activities in the fields of gaming, catering, entertainment and hospitality, the rationale for exempting receipts from these activities from income tax on the basis of a direct connection with members is weakened,’ the review read. It recommended that the tax concessions granted to clubs — especially large clubs — be completely abolished.

Not all clubs in Australia, however, have parted from their humble, poker machine-free origins. In fact, there are some that have — with much success — decided to more fully embrace those origins, disproving the often-invoked argument that poker machines are necessary for a club’s survival.

One of these clubs is the Petersham Bowling Club. Situated on a quiet backstreet in Sydney’s inner west, its clubhouse is indistinguishable from the Federation terraces it’s nestled between, identified only by a two-by-one-metre white sign with the letters ‘P.B.C.’. The only ostensible sign of development since it was built in the 1930s is the shiny black solar panel array spread across its tiled roof.

The two bowling greens that the clubhouse looks over are a long way off being ready to host a professional competition. On the afternoon I visit, a Jack Russell bolts along one of them chasing a tennis ball, its owner drinking a beer on a bench to the side; on another side, two young siblings play tips while their parents watch on. The walls inside the clubhouse are covered in over 100 years of lawn bowls memorabilia — a badge board, black-and-white portraits of ex-club members, and memorial boards with the names of bowls champions and runners-up written in gold lettering.

The carpet is a psychedelic swirl of purple, blue, black, and aqua. There are several cream vinyl-topped dining tables, as well as tall tables with fire-hydrant-red stools around them. In one corner are two red leather couches, a glass coffee table, and a seventies-era lamp. The bar is long and narrow, and topped with black tiles and a plush black bolster. In the corner beside the bar is a life-sized mannequin dressed in a white wide-brimmed hat, a green jacket, and a red tinsel sash. Near to it is a pinball machine, a Pacman video game, and a pool table. Across the room is a small music stage and a vinyl dance floor. Beside it, a staircase leads down to a small storeroom-turned-arts space now used for theatre performances and film screenings.

The club is very different now from what it was like when George Catsi became president in 2006. A middle-aged man with bushy grey hair parted in the middle, large brown eyes, and a wild manner of speaking, Catsi remembers his first visits to the then-failing club soon after moving into the local area in 2001. ‘It was very empty,’ he tells me as we sit at one of the club’s outdoor wooden tables.

Catsi was not particularly interested in the club at the time. But in 2004, it was announced that an application had been submitted to demolish the clubhouse and replace the top bowling green with seventeen modern townhouses. The directors planned to use the money to build a clubhouse on the bottom green, with a fake bowling green on the roof. ‘Needless to say,’ Catsi says, ‘that invigorated the local community into, “What! What are you doing!?” And we started to gather and protest, saying it was an outrageous development that ignored the need for open spaces.’ Catsi says the board was trying to ‘sell their way’ out of their financial problems, and would have ruined the atmosphere and aesthetic of the local area if successful.

Council, however, blocked the development. Catsi and others in the community became members of the club to try to bolster it. But it remained in a dire financial state — or, as Catsi puts it, in a ‘death spiral’.

In 2006, the board proposed yet another controversial solution to the club’s growing problems: lease the bottom green to the now-defunct ABC Learning company for 99 years for $1.8 million. ‘They said the money would refurbish the club and fix everything up,’ Catsi says. Again, he and others in the local community resisted the development, believing it to be a simple cash-grab rather than a long-term, sustainable survival strategy. When the development went to a vote, the members voted it down. The entire board then resigned on mass.

‘So elections were held and I said, “Someone needs to stand for president,” Catsi explains. ‘And then someone said, “Why don’t you stand?”’ So Catsi — who, in his full time job, teaches design thinking at Sydney’s University of Technology — did. ‘I was so atypically your bowling guy,’ he says, laughing. And he was elected, along with an entirely new board made up of a barrister, a communications specialist, a software engineer, and a landscape architect. ‘None of us were bowlers, none of us had been on boards before, or knew anything about running clubs. We were literally handed the keys to a bowling club and told, “Well, you fucking do it.” And we had to try and figure it out.’

Step one, Catsi says, was simply keeping the doors open. This also meant keeping the eight poker machines, which then occupied what is now the music stage, switched on — a decision that troubled the board deeply. ‘I remember feeling embarrassed by them,’ Catsi says. ‘And I remember feeling petrified by them as well, because I didn’t really know the compliance issues. We didn’t want people to use them because we didn’t like them, didn’t want them, and we didn’t know how to use them.’

The new, entirely voluntary board started to make inquiries as to how other clubs operated. They rang ClubsNSW for advice, who told them that the club first had to pay to become a member of the organisation. Catsi agreed. ‘We just assumed that they were an organisation — as they say they are — who represent all clubs. We thought they would surely have ideas, because they would have had this happen before with other small clubs.’

As well as suggesting barefoot bowls and upgrading the bistro, ClubsNSW told the club that it needed to upgrade its poker machines. ‘They said with newer poker machines, you will encourage people to come through and use the machines, and then the money that you make from the machines will allow you to subsidise food and drink, which will make the club more attractive to people.’ The estimated cost of upgrading the poker machines was around $20,000. Catsi was dumbfounded. ‘We thought, Okay. You want us to borrow money we don’t have, and the first thing we should spend that money on is new poker machines. That was it. That was their business plan. There was really nothing else on offer.’

The organisation, Catsi says, was simply perpetuating the same business model that had pushed the club to the brink in the first place. ‘If poker machines are so wonderful, why did this club fail anyway? There are other factors at play that make or break clubs.’ ClubNSW’s plan seemed even more foolish to Catsi, given that there were much larger clubs so close by with far more sophisticated gambling facilities. He wondered, Why, if you wanted to play pokies, would you come to us?

The board ignored ClubsNSW, deciding instead to devise its own solution. For a while, the poker machines remained switched on as the board considered alternatives. But then, after a comical event one day in 2007, everything suddenly changed. Catsi remembers it vividly.

‘It was busy, and some people were playing the pokies. One of them won and wanted to be paid out, but the machine wasn’t paying. So I went over and was having a look at it, trying to see what it would do, but nothing was happening.’ Catsi paid the man out, but there was still a problem: the credits on the machine wouldn’t clear. ‘So then I got the keys and opened up the machine, and both I and the punter were in there, inside the poker machine, looking around, pressing buttons, trying to clear the credits. I knew I couldn’t walk away, because then the next person would walk up, and they’d have $80. So I did what every logical person would do — I tried to play the machine down to get rid of the credits.’

But this didn’t happen; instead, Catsi kept winning. ‘So I was in this weird situation where I was trying to lose on the poker machine but I was actually winning! I was getting seriously stressed by it all. I didn’t know what to do. So I went over to the switch and turned them off at the wall. And we never turned them back on after that. I went to the board and said, “We can’t do this. It’s too stressful, and we don’t even want the machines here. We have to find another way to survive and sustain ourselves without these, because we don’t want to follow that model. Once we buy into that model — if we borrow money to go into it — then it’s self-perpetuating and we’re stuck in the system. Let’s switch them off — permanently.”’

The board agreed. But they were faced with a moral crisis: sell the licences for the eight machines, or simply let them expire? Out of financial necessity, and after extensive debate, they sold them. ‘Yes, by selling them on, we kept them in the system, but we weren’t in a financial position to not do that.’ Ironically, Catsi says, it was the money from selling the licences that helped keep the club afloat.

In getting rid of poker machines, the club joined the other 700-odd venues — pubs included — across states and territories where poker machines are permitted in community venues that do not rely on gambling for one cent of their revenue.

It was after the board decided to jettison its poker machines that the club’s rejuvenation began. Catsi became loud and proud of the fact that the club had ditched its poker machines. Word spread quickly, and there was an almost immediate surge in patronage: ‘Suddenly, people started coming here because they want to take their kids to a club where there’s no poker machines.’ He remembers speaking with a couple who had driven over an hour to have dinner, and two tradesmen who were doing work on the club who signed up to be full members. ‘When they filled the form out, I saw that they lived in Penrith! They were never going to be back, but they said, Consider it a donation for what you’re doing.’

This sort of goodwill was both heart-warming and helpful. But a more sustainable plan was required. ‘We knew we needed to provide — and call me crazy — a service that our customers want at a reasonable price. It was a radical business model,’ Catsi says, jokingly.

The inexperience in running clubs among the board members was, Catsi believes, a major advantage, for it meant they were not bound by convention. Added to this was Catsi’s professional teaching skills; design thinking, he says, is all about examining existing systems, and devising ‘alternative and creative solutions to problems’.

Catsi says he and the board ‘rethought the model of a bowling club’. Essentially, they transformed it into a community hub, accessible to all residents, young and old, regardless of whether they were bowlers. Instead of spending the tens of thousands of dollars that was necessary to maintain the greens to a competitive standard — something there was little demand in the community for — they turned them into more of a communal park space that could be used for casual barefoot bowls, plus other activities, sports, and events. They also built a large and diverse arts and culture program to support local, emerging artists and musicians, as well as more established ones from overseas.

Replacing the poker machines with a music stage was a key part of this transformation. ‘It’s a wonderful, beautiful takeover of that space,’ Catsi says. Now gigs are held weekly, with the musicians taking all the money from the door while the club keeps all of the bar sales. On almost every night of the week there are also art events, ranging from life-drawing sessions, swing-dance classes, poetry performances, and film screenings. On top of all this, the club hosts the annual ‘Sculptures on the P.B.C.’ — a unique take on the famous sculptural art event held every Spring along Sydney’s eastern beaches.

As well as focusing on ways to increase revenue in order to survive, the club has looked at ways to cut costs. Environmental sustainability has been a key part of this. Along with the solar panels, the club has installed waterless urinals, rainwater tanks, and water-saving devices. For this, it has received numerous council awards.

These changes have borne fruit. Since the old board resigned and Catsi became president, the club’s turnover has increased by over 500 per cent. The reason for this, according to Catsi, is simple. ‘People come here because they want to be with the people that are here. They want to come to a space where there are different events going on with lots of different people; where there is surprise at what’s happening today. And it’s also very local, so they might bump into someone they know.’ He sees the venue as being, simultaneously, a club, a community centre, a sports centre, and an arts centre: ‘We’re a multi-functional polis.’ And while it may not be able to donate as much hard cash as other clubs that do operate gambling facilities, Catsi is proud that he is not taking money from the community in the first place, nor perpetuating the harm caused by poker machines.

The club’s transformation — indeed, its survival — would never have been possible, Catsi says, if the old poker machines had been kept. ‘Pokies don’t encourage you to work harder in other areas. That’s the main thing. It’s a lazy option that’s trickling in the background. It makes you lazy.’ What poker machines do encourage, he says, is an exuberant waste of money. ‘And you just need to look at most of those edifices that they build to see that. They’re poorly designed, poorly decorated. They’re pretending to be something that they’re not. A lot of people who go to them think that this is how they should be; that this is just the way it is; that the clubs are a reflection of success. And so people are fooled by that.’

Catsi has a strong philosophical bent in him, and questions the idea of anything being forever, including clubs. ‘If you can’t survive because there are [not enough] people coming through and participating in your club with the services that your club offers — and I’m not talking poker machines — then maybe you don’t survive. And maybe that’s okay. These things come and go — they change. Demographics shift. Things fall out of favour. Sports fall in and out of favour. Venues fall in and out of favour. Coffee shops, restaurants, fall in and out of favour, and they don’t survive.’

‘I don’t think there should be a compulsion that the club has to survive. If the community wants it to survive, it will survive. If you’re ClubsNSW, and you want the community clubs to survive, then fill your clubs up with entrepreneurial skills, marketing skills, case studies, and consultants from other clubs who have gone through a similar process. Get them to come in and talk about different ways of doing things. There’s a lot of design thinking that goes on in the world. People can be kitted up to see things differently. They’re the skills people need.’

Soon after I finish talking with Catsi, the weekly swing-dance class at the club begins. There are around fifty people — men, women, singles, couples, veterans, and first-timers — of all different ages. After a brief introduction and warm-up, they’re off, feet tapping and bodies twirling to the music. Watching on, I think of my Pop and how he might benefit from having this opportunity in Grafton. I also think of what Mike Bailey said about why Wests Ashfield’s auditorium is no longer used as much as it once was. We used to have Saturday and Friday night shows with a band and the whole works. But these days, it doesn’t work that way. You just don’t get people through the door for that stuff anymore.