Federal Group
| Company type | Private |
|---|---|
| Industry | Tourism, hospitality, retail, transportation, gaming |
| Founded | 1885 |
| Founder | Farrell family |
| Headquarters | Australia |
Area served | Australia |
Key people | Greg Farrell (managing director), John Farrell (director of business development), Julia Farrell (director of interior design), Deborah Lee (board member), Jane Farrell (board member) |
| Products | Casinos, hotels, retail outlets, transportation of nationally sensitive freight |
| Owner | Farrell family |
Federal Group is a family-owned private enterprise engaged in sectors such as tourism, hospitality, retail, and the transportation of nationally sensitive freight. It is particularly recognized for its casino and gaming operations in Tasmania, often described as a highly lucrative venture. Previously operating under the names "Federal Hotels" or "Federal Hotels and Resorts," the company remains under the ownership of the Farrell family: Greg Farrell (managing director), John Farrell (director of business development), Julia Farrell (director of interior design), Deborah Lee (board member), and Jane Farrell (board member).
Federal Coffee Palace
As Australia's longest-standing hotel group with uninterrupted operations, Federal traces its origins back to Melbourne in the 1880s.
In June 1885, The Federal Coffee Palace Company Limited erected a seven-story temperance hotel timed to coincide with the 1888 Centennial Exhibition. At that time, it was Melbourne’s tallest structure, housing 450 guest rooms alongside the nation’s largest dining hall.
Financial difficulties during the late 1880s and early 1890s Depression led to substantial losses, prompting management to obtain a liquor licence in order to attract a more profitable clientele. Subsequently renamed Hotel Federal, this establishment became the cornerstone for what would evolve into Federal Group.
Over the following decades, Federal broadened its holdings by acquiring hotels such as The Menzies, Savoy Plaza, The Windsor, Hotel Australia, Lennons Hotel in Brisbane, and Hampton Court in Sydney.
Australia's first casino
Federal made its initial investment in Tasmania in 1956 by purchasing the Wrest Point Riviera Hotel located in Sandy Bay, Hobart.
During the late 1960s, Federal collaborated with the Tasmanian Government to obtain Australia's inaugural casino licence for Wrest Point. This initiative aimed to mitigate Tasmania’s seasonal tourism fluctuations by establishing an attraction that would operate year-round.
A referendum held on 14 December 1968 asked residents whether they supported issuing a casino licence for Wrest Point Hotel. Despite this public consultation, the Government circumvented the referendum outcome by passing legislation prior to the vote amid accusations of corruption involving prominent figures such as Kevin Lyons.
The casino’s creation was narrowly approved with a 6% margin, resulting in enactment of the Wrest Point Casino Licence and Development Act 1968.
On 10 February 1973, Australia’s first legal casino commenced operations amid extensive media coverage including a record-setting fireworks display and a televised show featuring entertainer Jerry Lewis. Opening day attendance surpassed expectations with over 2,000 visitors and hotel accommodations fully booked for three months thereafter.
Initially designed primarily as an entertainment and convention venue with a modest casino component, the facility rapidly shifted its focus as poker machines became widespread throughout the premises. Over time, restrictions on both casino gaming and poker machines were relaxed, leading to their pervasive presence within the community. Contrary to early forecasts predicting tourism growth, most gambling losses were sustained by local Tasmanian residents rather than visitors.
Second casino licence
In 1979, Federal Group obtained a second casino licence for Northern Tasmania, leading to the launch of the Country Club Casino and Resort in 1982. Subsequently, the company expanded by purchasing the neighbouring Country Club villas.
The architectural design and interior of Country Club drew inspiration from the grand residences typical of the American South. Greg Farrell senior, the former Chairman, admired the Georgian architectural style, considering it well-suited to Launceston’s rural surroundings.
Today, the casino is encompassed by residential suburbs and local communities.
9/11 bottleshops
Capitalizing on its exclusive control of Tasmania’s poker machines and detailed knowledge of lucrative locations, Federal Group acquired the 9/11 chain of bottle shops in 2006 to complement its existing operations. In February 2024, Coles Liquor reached an agreement to purchase all 20 of Federal Group’s 9/11 outlets, which were subsequently rebranded as Liquorland stores.
Controversy
Tasmanian writer James Boyce, in his 2017 publication Losing Streak, contends that Federal Hotels’ poker machine monopoly has been detrimental to the public while generating approximately $30 million annually for the company over a span of thirty years.
A parliamentary inquiry recommended a substantial reduction in poker machines and a reassessment of Federal Group’s agreement. Reports indicate that clubs retain merely 10-30% of pokies losses, with the majority of revenue flowing to Federal Group, which contributes minimal tax payments to government coffers.
2018 election and potential pokie ban
In August 2017, Federal Group proposed relinquishing their poker machine monopoly in return for lower taxes, which are already among Australia’s lowest gambling levies. The Liberal government chose to preserve pokies but hinted that exclusivity in licensing might not continue for Federal Group.
By December 2017, under leader Rebecca White, the Labor Party committed to eliminating all poker machines from pubs and clubs by 2023, citing health risks and an annual $110 million loss suffered by Tasmanians. Federal Group opposed this initiative, warning about potential job cuts and halting donations to Labor. The Liberal Party largely echoed Federal Group’s stance, even utilizing their promotional materials against Labor; over half of Liberal donations—amounting to more than $400,000—originated from gambling sector contributors.
Labor’s proposal gained widespread backing from the Greens, Jacquie Lambie Network, and prominent individuals such as David Walsh, MONA’s owner and a key adversary of pokies. Public sentiment also leans toward reducing or removing poker machines across Tasmania.
Former interests
- Strahan Village
- Freycinet Lodge
- Cradle Mountain Hotel
- Gordon River Cruises
- West Coast Wilderness Railway
Tourist accommodation
- Wrest Point Hotel Casino
- Country Club Casino
- The Henry Jones Art Hotel
- Saffire-Freycinet
- MACq01 Hotel (2017)