The Dilemma Faced by Super Funds: A 300% Surge in Gambling Stocks

The Dilemma Faced by Super Funds: A 300% Surge in Gambling Stocks
The Dilemma Faced by Super Funds: A 300% Surge in Gambling Stocks


Investors Gather for Aristocrat Leisure’s ESG Event

Aristocrat Leisure, one of Australia’s leading pokies companies, is hosting an event dedicated to environmental, social, and corporate governance (ESG) concerns. The company has invited its biggest investors, including top super funds, to discuss these important issues. As the guardians of the nation’s retirement savings, these funds are increasingly aware of the social harms associated with gambling and the need to justify their investments to their members.


Questionable investment: Almost 40 per cent of Australian adults gamble at least once a week, a government survey found earlier this year – and the costs to society are huge.Credit: Peter Braig

According to Ian Patrick, chief investment officer of the Australian Retirement Trust, societal attitudes towards harm and the financial effects of harm are changing over time. This shift in perspective may lead to changes in investment strategies. While gambling stocks have seen significant gains in recent years, the social and financial costs associated with gambling are causing super funds to reconsider their investments.

As Australians lose billions of dollars each year to gambling, super funds like NGS Super are exploring ways to align their investments with ESG goals. Ben Squires, head of investments at NGS Super, expresses a desire to remove gambling stocks from the fund’s portfolio and is engaging with asset managers to address this issue.

Gambling Reforms and Responsible Investing

Upcoming gambling laws in Australia aim to tackle social harms associated with the industry. Victoria plans to impose betting caps, shorter opening hours for venues, and slower machines, while New South Wales is reducing the number of allowed slot machines in venues. Additionally, a recent parliamentary inquiry has made recommendations for banning online gambling ads and implementing national regulation.

AustralianSuper, one of the largest super funds in the country, holds significant investments in Aristocrat, the leading maker of slot machines in Australia. ESG considerations are becoming increasingly important for investors, and companies like Aristocrat are expected to address these concerns. Super funds are actively engaging with companies on issues related to responsible gaming practices and compliance with regulations.

While some super funds offer responsible investment options that exclude industries like gambling, there is still a need for greater transparency in disclosing investments. Former gambling addict Andrew Ientile expresses concern over his super fund’s investments in gambling stocks, highlighting the need for funds to use members’ money responsibly.

Conclusion

As the social and regulatory landscape evolves, super funds are grappling with the implications of investing in the gambling industry. While climate risk is often discussed in investment teams, addressing social issues can be more complex. However, super funds are actively engaging with companies and advocating for responsible gaming practices. It is important for funds to align their investments with the expectations of their members and the broader community.

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About Aristocrat Leisure

Aristocrat Leisure is a prominent pokies company in Australia, operating a large number of electronic gaming machines known as “pokies.” These machines are not limited to casinos but can be found in community venues that often offer cheap alcohol to attract customers. AustralianSuper, one of the largest super funds in the country, holds a significant stake in Aristocrat. As ESG considerations gain prominence, investors are increasingly focused on how companies like Aristocrat address these issues.

Super funds like AustralianSuper have substantial investments in the gambling industry. While there are responsible investment options available for members, there is a need for greater transparency in disclosing these investments. Super funds acknowledge the need to reflect social and community expectations in their portfolios and strive to make informed decisions that align with their members’ values.

It is crucial for investors to be aware of where their retirement savings are invested and for super funds to use members’ money responsibly. As the investment landscape evolves, it is expected that ESG considerations will play a larger role in shaping investment decisions.

Quote from Amy Bainbridge, Author of the Article

“Society’s attitudes to what constitutes harm and the understanding of, let’s call it the true financial effects of harm, do change through time. I think you’d expect investments to shift with that.” – Amy Bainbridge

Author’s Conclusion

As the gambling industry faces increased scrutiny and regulatory changes, super funds are reevaluating their investments in this sector. While there are challenges in addressing social issues associated with gambling, super funds are actively engaging with companies and advocating for responsible gaming practices. It is important for funds to be transparent about their investments and ensure they align with the expectations of their members and the broader community.

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