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A request by Eastern Region MP Peter Hall for an investigation into the allocation of gaming machine licences in Victoria has been accepted by the Auditor-General.

Mr Hall welcomed the decision which came about from a successful motion he moved in parliament in May. The Auditor-General will now conduct a performance audit into the licence allocation process which will cover not only the gaming auction, but the pre-auction club offer as well as the transfer scheme, which is scheduled to take place in September.

Mr Hall said the previous gaming license auction had been a disaster for the State Government.

“The amount of $981 million is all that was raised in the whole of the allocation process when everybody in the industry estimated it would be a minimum of $1.5 billion and up to around $3 billion,” Mr Hall said.

“This inept and incompetent government lost in order of between $1 billion and $2 billion potential revenue in one single day!”

Mr Hall said machine entitlements ranged in prices from $5,500 to just over $143,000 in the auction process with many of the country pubs and clubs paying higher prices.

“I’m sure this investigation will explore why the industry expected revenue was so out of kilter with the actual revenue achieved,” Mr Hall said.

“I think you have to wonder whether an auction is the best way to allocate machine entitlements. Auctions only work when you have competition and I don’t believe there was a great deal of competition or else we would have seen higher prices.”

Mr Hall also blamed the minimal reserve prices set by the Government saying they were “unrealistic”.

He said one sporting club had advised the auction process was flawed after the price for a machine license dropped from $49,000 down to $38,000.

“None of the participants can work out how the actual price that they were prepared to pay went down as the day progressed,” Mr Hall said.

Mr Hall said the whole process had been “a real lemon” and he hoped the Auditor-General’s investigation would reaffirm this so that it could be changed.

“Because of this Government’s incompetency we as Victorian taxpayers have missed out on significant revenue which could have funded a raft of new services. We can’t allow this to happen again,” Mr Hall said.