Revealed: Peter Costello’s Future Fund has $280m punt on the pokies, lotteries and online gambling

by Rex Patrick and Philip Dorling | Jun 22, 2023 | Government, Latest Posts

The Future Fund manages more than $200 billion of public sector funds but does so with a notorious penchant for secrecy. This third instalment in a series from Rex Patrick and Philip Dorling shines a spotlight on the fund’s surprising gambling stake.  

Former Liberal Treasurer and current Future Fund Board of Guardians chair Peter Costello once confessed to being “a bit of a gambling man, a bit of a punter”. But who would have imagined that under his stewardship the Future Fund would have staked more than $280 million of taxpayers’ funds on companies that extract wealth from the community and cause harm through gambling. 

The Future Fund’s gambling investments, revealed for the first time through Freedom of Information, include a $211 million stake in Aristocrat Leisure, the world’s second largest poker machine manufacturer. This is one of the Fund’s top 20 investments in Australia. 

Aristocrat has a 50% share of the poker machine market in Australia. It’s been described by shareholder activist Stephen Mayne as “the gorilla behind the scenes” in continuing political battles over gambling regulation and reform. Aristocrat’s products aren’t just poker machines, the company also develops gambling applications for mobile phones and casinos and sees its future in online gambling services.  

While Prime Minister Anthony Albanese mulls a clamp down on gambling advertising, the Future Fund is looking at handsome returns from a company that has made huge profits from poker machines in clubs and pubs and is now working to be a world leader on online gambling.

More on gambling than Qantas, Bluescope and Cochlear

The Future Fund’s gambling holdings also include $67 million in the Endeavour Group, the Woolworths spin off that controls extensive hotel, liquor and poker machine interests and last year was charged 62 times by the Victorian gambling regulator for allegedly allowing patrons to gamble at its gaming machines without the option to set maximum losses.

Smaller investments in casino operator Star Entertainment, which copped a $100 million fine from the Queensland Government last year and shed 500 jobs, as well as lotteries reseller Jumbo Interactive round out the Future Fund’s gambling holdings. 

These are only a small part of Future Fund’s $17.9 billion investments in Australian equities; but they provide some interesting perspective on where the Fund thinks profit is best made.  The Fund’s investment in Aristocrat Leisure dwarfs that in some other prominent Australian companies, for example Qantas ($93m), one of our two surviving steel manufacturers Bluescope Steel ($97m) or the advanced medical technology developer Cochlear ($117 million).  

Massive economic and social cost

Exclusions under the Future Fund Board’s environmental, social and governance risk management policy include a list of companies engaged in the manufacture of tobacco products. The public health impacts of smoking are undeniable and the Future Fund’s investment policy rightly reflects that.  

Yet the harm done to individual Australians, their families and communities through problem gambling is equally clear. The economic and social cost is huge. The Australian Institute of Health and Welfare (AIHW) has estimated that Australians lose around $25 billion each year from legal gambling. 

The AIHW has further reported that some 1.33 million Australians, just over 7% of the population, gamble at levels that are potentially harmful.  Productivity Commission data suggests that as many as 170 000 Australians are problem gamblers at risk of serious financial, family and relationship as well as mental health consequences.  

It’s those consequences that underly the current political debate about banning gambling advertising.  But as far as Peter Costello’s Future Fund is concerned, gambling is a sure bet.

But it’s a bet that hasn’t please independent Federal MP, Andrew Wilkie. “Many people would be shocked to learn that the Future Fund is a big investor in Aristocrat. Poker machines cause enormous harm and companies that make and operate them should be shunned, just like the tobacco companies. That Aristocrat’s founder, Len Ainsworth, attributed the firms success to building a better mousetrap says it all”

The same treatment as tobacco


Rex Patrick’s FOI lifts the lid on Future Fund’s China investments

Previous FOI disclosures of the Future Fund’s overseas investments shone a light on questionable investments with national security implications, links to modern slavery and other human rights violations, as well as pollution and environmental damage.  

Treasurer Jim Chalmers’ has this year highlighted the importance of Government’s pursuing “interlocking economic, environmental and social policy objectives” and putting values at the forefront of how our economy works “to ensure our private markets create public value”.

The Treasurer could well start with the Future Fund. While the Fund is properly independent from government, the government can set out its broad expectations of how it invests through an investment mandate direction issued under the subsection 18(1) of the Future Fund Act

Treasurer Chalmers, together with Finance Minister Katy Gallagher, could seize the opportunity to issue a new direction that includes a social values obligation, a commitment to Australian manufacturing, science and technological development, and a requirement for improved transparency.  

But if they want to start with something very simple and direct, they should direct the Future Fund to disinvest from companies involved in gambling industries.  If tobacco is excluded, so too should poker machines and online gambling.  

“The situation is deeply disturbing and I intend to raise it with the Treasurer,” said Mr Wilkie.

If the Government proceeds with a ban or restrictions on gambling advertising, they’ll look pretty hypocritical if the Future Fund still has well over a quarter of a billion dollars invested in that same industry. They should pull the plug on Aristocrat.  

Big Tech, weapons, tax havens, even Rupert Murdoch – secrets from the Future Fund investment vault


Rex Patrick is a former Senator for South Australia and earlier a submariner in the armed forces. Best known as an anti-corruption and transparency crusader -

Philip Dorling has some thirty years of experience of high-level political, public policy and media work, much of that at the Australian Parliament.

He has worked in the Australian political environment from most angles, in both the national and state levels of government including as a senior executive; as a senior policy adviser for the Federal Labor Opposition and for cross bench Senators; and as an award-winning journalist in the Federal Parliamentary Press Gallery.

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