On 11 December 2008, the Victorian Government released the Gambling Regulation Further Amendment (Licensing) Bill Exposure Draft (Exposure Draft Bill). The Exposure Draft Bill proposes: the regulatory framework for gaming machine arrangements under the 2012 industry structure, a single independent monitoring licence be awarded via a competitive process, and new responsible gambling measures relating to advertising.
The government invited comment from stakeholders and the community in relation to the gaming machine arrangements outlined in the Exposure Draft Bill Explanatory Statement.. You can download your own copy of the discussion paper by clicking here.

Set out below is the the PokieWatch.org Submission to this second Gambling License Review. Your participation by posting comments to the thread is welcome.

The PokieWatch.org submission was divided into three parts;
1. Censorship of prior submission
2. 35% Cap
3. Local Impact Assessment

While comments were invited on the advertising measures in the draft bill, I have interpreted this narrowly. Should the opportunity arise to comment on responsible gambling generally, I would like to provide information on the need to exclude children from the sights, sounds and presence of pokies in Victorian pubs and clubs.

1. Transparency and Censorship of prior submission

It is acknowledged that the Project Director reserved discretion to exclude material from public inspection that may be defamatory, vilifying or otherwise considered to be inappropriate.

Whole sections of my previous submission were blacked out from the public record. (Attached to this web page is a pdf showing the blacking out by the Department of Justice) While lengthy argument in this document on government censorship will not assist best practices consideration of Victorian pokie regulation; the matters blacked out were either
• statements of fact or
• opinions and submission based upon those facts

In every case they were relevant to the matters stated to be under consideration by this review; particularly, the reduction of competition and the implementation of the 35% ownership cap.

To exclude the information and my submissions based upon it from public consideration casts doubt on both the transparency and probity of this review.

2. 35% Cap

Caps should apply to clubs

In order for the government’s stated goal of delivering greater competition be achieved, pokies in clubs must be considered. Otherwise, provided regional caps, pokie density and the 105 pokies per venue limitations are met, it will be technically possible for one licensee to hold all club licenses. While this is unlikely, it does allow for undue dominance by clubs with stronger fiscal backing such as the clubs or social clubs associated with professional sporting teams.

Draft bill confusing

It is not clear that the concept of associated interests as existing in the present legislation will apply to the 35% cap. While this expression is used in Division 2 (Section 3.2A.2), it is not used in Division 3 (Section 3.2A.7).

The explanatory statement uses the expression “individual or organization”. The effectiveness of the 35% cap would be avoided if, taken together, an entitlement holder and its associates controlled more pokies than the cap allowed.

It is noted that the new concept of a ‘prescribed connection’ is mentioned but the process of ‘prescription’ is not defined. It is also noted that it is intended to supplement these 35% rules with further regulations. Given its importance, it is submitted that comments be allowed before such regulations are submitted for legislation.

Prohibition on Profit Sharing

Management and leasing arrangements should be taken into account when considering the 35% cap.

Please refer to the matter of the Manningham Club which is the subject of a decision of the Victorian Casino and Gaming Authority in June 2004 (http://www.vcgr.vic.gov.au/CA256F800017E8D4/WebObj/4E46F0263CE8FB84CA25701D00451525/$File/ManninghamClub29June2004.pdf) and a later letter from that club which can be read here - http://www.justice.vic.gov.au/wps/wcm/connect/DOJ+Internet/resources/file/ebecc84203fa7ff/CBS%20Submission%20-%20Manningham%20Club.pdf

In that matter it was found that a lease entered into by a company now associated with Woolworths Limited had what could be described as a profit sharing arrangement with that club. From later correspondence it would seem that this same arrangement continues and club status is enjoyed notwithstanding. The Woolworths’ associate’s web site characterises this and other club facilities as its own. http://www.alhgroup.com.au/vic_venues.html
The Authority found stated in paragraph 32 of that decision as follows:
“Overall there does not seem to be a great deal as would distinguish the Club and its activities from those offered by many hotels. Also, in this case the Club is managed in the same interests as the adjoining hotel licensed premises and freehold owner. While it is not unusual for club gaming venues to be on land where the freehold is not vested in the venue operator, we see paragraph (a) as identifying the possibility that where the premises are owned by outside interests, the preferential tax rate on gaming revenue, intended for clubs because of their community contribution will actually benefit the freehold owner. We are fortified in this view by the increasing trend of clubs with gaming licenses being seen as attractive investment vehicles for private investors.”
It would seem that arrangements such as these impede the objectives of the community benefit fund. This statement would apply whether the consideration be for a fixed fee, or some relationship to pokie, alcohol, food or some other measure of turnover at a club where pokie gambling is licensed.

Furthermore, competition in the Victorian pokies industry will be reduced if organizations are able to have any management interest whatsoever whether it be a pub or a club. This reduction will become undesirable if it applies in more than either 35% of pubs or clubs, an effective limit of 17.5% of Victorian pokies. This expression is deliberately wide to include arrangements whether for fixed fee or otherwise relating to not only to the supply or operation of pokies, but also the sale of food, alcohol or other services or lease of land, premises or equipment by or from the entitlement holder.

Arrangements such as these should be in the public record as a transparent safeguard ensuring compliance. Draft section 3.4.28E should be amended accordingly. The public interest is best served by waving aside vague notions of commercial sensitivity when key principles of the legislation are potentially being avoided.

It is noted that the RSL submitted (in response to question 6.5 (a)) that service providers be licensed. Ensuring that all arrangements are publicly available will assist small venues in knowing that they have a ‘good deal’ and maximise their benefit to their respective community.

3. Local Impact Assessment

applaud the adoption of a process that will pre-qualify bidders and look forward to the guidelines for the terms and conditions document referred to in paragraph 2.2.2 of the December 2008 Explanatory Statement.

It is noted that several written submissions to the first inquiry requested certainty in the planning process. Information such as the SEIFA index is available. Couple this with the data mentioned in paragraph 2.2.13 of the December 2008 Explanatory Statement will provide both applicants, state and local government authorities with a more complete sense of the impact of pokies in any given locality.

It is of concern given local council opposition to recent VCGR applications such as Club Edgewater, Romsey Hotel, and Matthew Flinders Tavern that no further guidance was provided other than reference under paragraphs 2.2.6 and 2.2.8