NT Government gave $3.5 million loan guarantee to turf club despite 'limited information', FOI shows
The NT Government approved a $3.5 million loan guarantee for a new sports and gaming venue at the Darwin Turf Club (DTC) despite departmental advice saying there was "limited information available" about the project, FOI documents show.
Key points:
- The Darwin Turf Club needed an extended loan guarantee to construct the Silks venue
- FOI documents show the Attorney-General was advised there was "limited information" about the project
- The Chief Minister was later told gaming and liquor licences did not specifically apply to Silks' location
The turf club — which receives millions of dollars in public funds per year — unveiled plans for the Silks venue in March 2017, promoting its proposed bars, TAB facilities and 55 poker machines to generate year-round income.
But to build Silks, the turf club needed the Government to partially underwrite it by extending a $3.5 million guarantee that had previously been given to the club in 2007 for the development of a corporate bookmakers' facility.
Under the agreement, Territory taxpayers would become liable for millions of dollars if the turf club was unable to meet its repayments for Silks.
The ABC submitted a Freedom of Information request about the Silks project following the controversy surrounding a separate $12 million government grant given to the turf club for a new grandstand last year.
'Limited information' on project
The documents show Attorney-General Natasha Fyles received advice from her department in July 2018, which detailed the legal process required to approve the extension of the loan guarantee.
The department said a risk analysis was needed but there was "limited information available regarding the construction of the Silks Club", apart from it being a new dining, entertainment and gaming facility at the Fannie Bay racetrack.
Nonetheless, it suggested the construction and operation of the facility "may be of benefit to the Territory" through the creation of jobs and tourism opportunities.
After receiving the information, Ms Fyles wrote to the Treasurer Nicole Manison, requesting she approve the guarantee extension based on its economic merits, which Ms Manison did on July 9, 2018.
When asked by the ABC why it was approved despite the lack of information mentioned in the documents, a Government spokesperson said it was simply an extension of a pre-existing guarantee, with no additional taxpayers' money provided for the project.
'Way too much detail'
In late 2018, the Opposition asked the Treasurer a series of Questions on Notice, including whether due diligence or a cost-benefit analysis had been undertaken before the guarantee extension was approved.
Draft answers obtained by the ABC show the Department of Treasury and Finance initially stated: "DTF is not aware of any due diligence undertaken" and "DTF is not aware of any cost-benefit analysis undertaken".
After consultation with the Attorney-General's Department, the draft statements were amended to say due diligence had been undertaken, including checking the turf club's compliance with the Associations Act and obtaining copies of its latest financial return.
The amended responses also said risks had been assessed by obtaining information from the turf club's financier, including total borrowings in proportion to the guarantee extension.
The FOI documents show the final responses to other Opposition questions were pared back from the original draft versions after the Attorney-General's then chief-of-staff Emily Beresford-Cane told colleagues there was "way too much detail" in the answers.
A Government spokesperson said answers to Questions on Notice were subject to a drafting and approvals process finalised by the relevant minister's office.
Licensing uncertainty
After approving the guarantee, uncertainty later emerged over the turf club's ability to sell alcohol and operate poker machines at the Silks venue.
This was because its existing liquor and gaming licences were specifically linked to a venue known as Ted's Bar — which it originally planned to renovate — not to the location where Silks was eventually built.
The Attorney-General flagged the issue with the Chief Minister Michael Gunner in March 2019.
In a memorandum, Ms Fyles advised Mr Gunner that construction of Silks was not taking place within the turf club's existing liquor licence footprint, nor in accordance with its licence.
"An application will need to be made if DTC intends to sell or supply liquor or gaming from the new premises," she told him.
The turf club told the ABC its existing liquor and gaming licences "merely needed to be substituted to the new club".
But when the Liquor Commission handed down its decision about substituting the licences in August 2019, it said approval was no certainty because the floor size and patron capacity of Silks was almost double that of Ted's Bar.
It noted: "A refusal of the application would preclude the licensee from obtaining approval to operate [electronic gaming machines] as planned."
Ultimately, the commission decided to approve the application.
A Government spokesperson said Territory taxpayers were never put at risk by the lack of certainty surrounding the turf club's licensing arrangements, despite being essential to the new venue's financial viability.
Thoroughbred Racing NT, which provides public funding to the turf club, said the loan guarantee had never been called on, and therefore it has not cost taxpayers any money.
Silks opened in July this year.
from Poker
Post a Comment