Bob Carr calls for super-profits tax on pub and club poker machine earnings
The former NSW premier who opened the door to poker machines in pubs nearly three decades ago is now calling for a super-profits tax on the gambling windfalls that decision created — describing the enrichment of the pub sector as something nobody anticipated at the time.
Bob Carr, whose government legislated pokies into NSW pubs in 1997, told AFR Magazine the scale of wealth generated for publicans since then warranted urgent government intervention.
"It would be good public policy for governments to look at the grossly excessive profits in the service sector, just as there has been a debate about excessive profits in the mining and energy sector," Carr said.
"I would invite Commonwealth and state treasuries to go for it as a matter of priority. Nobody saw the aggrandisement of publicans as being a future consequence of a decision to allow a limited number of poker machines into pubs in the 1990s."
NSW pubs were generating $900 million in gaming profits just two years after pokies were introduced. By the year to June 2025, that figure had ballooned to $5.4 billion. Clubs, meanwhile, have grown their gaming profits from $2.5 billion in 1999 to $6.2 billion today.
"The pubs have become rich in a way that I don't think anyone could have imagined in the 1990s when they were given poker machines," Carr said. "If we had known how this would have enriched the pub sector I think we would have saddled them with markedly higher tax regimes."
That wealth creation has minted several billionaires. The Hemmes family's Merivale group sits at number 112 on the AFR Rich List with a fortune of $1.71 billion, while prominent publican Arthur Laundy ranks at number 94 with $1.95 billion. Among the most dramatic rises is Sam Arnaout, a former panel beater who owned a single suburban pub in Sydney's west in the late 1990s. His Iris Capital now spans dozens of pubs, hotels and casinos in Canberra and Alice Springs. Arnaout ranks at number 50 on this year's Rich List with a fortune of $3.47 billion, placing him on par with Lachlan Murdoch. The 2026 Rich List publishes this Friday.
Property values have tracked the same trajectory. The El Cortez Hotel in Canley Vale sold for $1.86 million in 1992, and the Cabramatta Hotel for $2.6 million in 1996. In 2024, both sold jointly to Arnaout's Iris Capital for $180 million.
Carr's said the Minns government faces growing internal pressure to curb poker machine numbers.
"Gambling is touching enough families now to shift the balance of politics on this," he said. "Federal and state action would only get public support."
His call echoes that of former prime minister John Howard, who told the Financial Review last year that poker machines were a "grave social evil" and urged Prime Minister Anthony Albanese to lead national reform. "I am strongly in favour of national action," Howard said. "But I am pessimistic about the willingness of the Labor Party to do anything on poker machines. It looks like Albanese has gone to water on the issue and I couldn't be more critical."
Those concerns appear well founded. On the eve of this year's federal budget, the government released its response to the 2023 bipartisan Murphy Report — rejecting its headline recommendations for a total ban on online gambling advertising and a national online gambling regulator, while agreeing to restrict some betting advertising on television, radio, sports uniforms and in stadiums.
The Australian Hotels Association's CEO John Whelan declined to comment when contacted by the Financial Review regarding Carr's super-profits tax proposal. Whelan's father, Paul, was a long-serving minister in the very Carr government that introduced pokies to pubs in 1997.
Jonathan Jackson, 25th May 2026
