10 questions asked at 2022 Lottery Corp AGM
January 7, 2023
Here is the text of the 10 questions asked at the 2022 Lottery Corp hybrid AGM held on November 8, plus a brief summary of the answers. Watch the 84 minute webcast.
1. Did any of the 5 main proxy advisers - ACSI, Ownership Matters, Glass Lewis, ISS and ASA - recommend a vote against any of today's resolutions? Which of the proxy advisers are covering us and has their been a material proxy protest vote against any of today's resolutions? Will you disclose the proxy votes before the debate on each resolutions so shareholders can ask questions about the reasons if there have been any protest votes? Also, why not disclose the proxies to the ASX with the formal addresses like others now do?
Answer: They were all supportive - watch video via Twitter of chair Steven Gregg incorrectly saying "they all voted in favour". Besides ASA, proxy advisers don't vote, they just recommend how paying institutional clients should vote. Then, later on, watch this rubbish response from the chair justifying delaying disclosure of the proxy position until after the debate.
2. At the recent Tabcorp AGM, the chair made a strong call for restrictions on gambling advertising, arguing that there is too much gambling advertising in Australia, particularly on television. Do we currently face any legislative and regulatory constraints on where and how we advertise our gambling products and do we support the introduction of any further restrictions on gambling advertising?
Answer: Chair said our advertising is much more subtle than other gambling companies and our position is different to Tabcorp. We're not advocating for any change but will do a submission to the Federal inquiry into online gambling. Watch video of exchange via Twitter.
3. Our former parent company Tabcorp has been a long term donor to the major Australian political parties and has traditionally showered entertainment benefits on politicians through techniques such as inviting MPs and Ministers to the Tabcorp marque at the Melbourne Cup. Given the sensitivities around government licenced gambling companies seeking to influence the political and regulatory process, will we commit to a zero donations policy like BHP, Rio Tinto and Aristocrat. How much political expenditure did we make last year?
Answer: Chair said Lottery Corp doesn't make cash donations but will continue to pay for access to political events to talk to the politicians and understand what is going on. Watch video of exchange via Twitter.
4. As a former Tabcorp director, could Anne Brennan and the chair comment on who came up with the idea to install an entrenchment device into our constitution at clause 8.1.j.3 on page 31 which requires external board candidates to seek the approval of >100 shareholders to nominate. These sorts of constitutional amendments were tried by the likes of Lend Lease and Orica but rejected by their shareholders. Woolworths didn't put it into the Endeavour Group constitution where Anne also serves. Will you normalize the constitution next year by removing this excessively high nomination requirement?
Answer: This is a technical question and we'll look into the detail but chair Peter Gregg said he believes there should be some sort of barrier to nomination.
5. As a former senior public servant in Queensland, could Doug comment on what constitutional, legislative or licensing requirements our company has inherited from the Queensland Parliament or Queensland licensing requirements. Also, are there any head office or director location requirements from other jurisdictions.
Answer: There are no head office or director constraints.
6. It is good to have John on the board, given his background as a top lawyer, CBA general counsel, investment banker and Coalition candidate to chair ASIC. Given his expertise in takeovers, could John comment on whether there are any unusual provisions in our constitution, licences or state legislation that would make a foreign takeover difficult. For instance, could Blackstone launch a bid and take over Lottery Corp like they did with Crown Resorts, or are there constraints that don't apply to other companies? Could the chair also comment on any takeover barriers at Lottery Corp.
Answer: There are no takeover constraints, unlike Tabcorp. Watch full exchange via Twitter.
7. Do all demerged companies have to appoint their auditor at their first AGM or was this driven by our constitution? Did we go to tender or are we intending to go to tender on the audit? As a long term Tabcorp director, our chair is being remarkably distant from Tabcorp today. Can he recall when Tabcorp last tendered its external audit and does he have any insight on market practice as to whether demerged companies tend to just soldier on with the same external auditor. Is that our plan?
Answer: EY did a good job at Tabcorp and we have no plans to change given they know the business well and this approval was required by the Corps Act. Watch video of exchange via Twitter.
8. Given the interesting discussions across a range of topics today, including the remuneration report, could the chair undertake to make an archived copy of the webcast plus a full transcript of proceedings available on the company's website? The likes of Nine, AGL, ASX, ANZ, Domino's and Lend Lease all produced their 1st AGM transcripts in 2021. Will you follow suit today after our debut AGM? This is something IAG has been doing since 2003.
Answer: We'll think about it.
9. Could Megan comment on her experience of the recruitment process to join the Lottery Corp board and how rigorous the various gambling regulator approval issues were to endure. Did we use a recruitment firm? I support her election and commend her record in private business and public boards.
Answer: chair Steven Gregg took this one explaining that a head hunter was involved in a rigorous process and the gaming regulator process was intense and normally took 6-9 months but it would be inappropriate to go into the detail.
10. We have over 150,000 shareholders but less than 5,000 will have voted today as us small investors feel overwhelmed. When disclosing the outcome of voting on all resolutions today, including this LTI grant, could you advise the ASX how many shareholders voted for and against each item, similar to what happens with a scheme of arrangement? This will provide a better gauge of retail shareholder sentiment on all resolutions and was a disclosure initiative adopted by your former parent Tabcorp only last week. Go on, chair, commit to being as transparent as Tabcorp, even if the law doesn't require it.
Answer: The "go on chair" bit was censored by Patrick the company secretary but the answer was that they'll think about it.
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