Branbeau PL v Victorian Commission of Gambling Regulation [2005] VCAT 2606 | Case summary

Branbeau PL v Victorian Commission of Gambling Regulation [2005] VCAT 2606 | Case summary | Zoe

[19]

14 The Family Hotel in Drouin is a traditional hotel in a main street. The hotel operates pursuant to a general licence under section 8 of the Liquor Control Reform Act 1998. It has a public bar, a large dining area and a bottle shop. Essentially it is proposed to establish a new public bar in adjoining premises and to convert the existing public bar into a gaming room. This area, which is approximately 50 square metres, is substantially less than 25% of the gross floor area of the hotel. As the hotel has been in operation for many years, no planning permit is required to install and use gaming machines. It is proposed to source the gaming machines from Tattersall's.

15 Drouin is a town with a population of approximately 6,000 persons, located about 110 kilometres east of Melbourne. Drouin is the second largest settlement within the shire. The largest settlement is Warragul, with over 10,000 residents. Warragul is only six kilometres east of Drouin.

16 At the time the application was made there were three venues within the shire which were approved for gaming. All of these were in Warragul. The venues were the Club Hotel (30 machines), the Warragul Club (70 machines) and the Warragul Country Club (40 machines). In July 2005 the Warragul Club was permitted to increase its number of machines from 70 to 80 machines. Also in July 2005 the Warragul Country Club was permitted to increase its number of machines from 40 to 45 machines. In each case the council did not oppose the increase in the number of machines. Thus there are presently 155 machines approved for operation in the shire, all of which are located in Warragul.

17 In documents supporting its application, the applicant projected that the weekly revenue earned by each of the proposed 20 machines would be $1,400; with a total annual revenue of $1,456,000. It further estimated that some 60% of this revenue was likely to be transferred from existing expenditure on gaming within the shire. Hence it projected that the new expenditure on gaming emanating from the shire would be $582,400.

18 A report from the economic and planning consultants UrbisJHD was submitted in support of the application. It pointed to a number of demographic, economic and social statistics to demonstrate that Drouin was a growing, but otherwise typical, Victorian town. It claimed that the provision of 20 gaming machines at the Drouin venue would address an appropriate demand for responsible entertainment and would generally provide support for local clubs and patrons.

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39 Although the tribunal must proceed without any presumption as to the correctness of the decision under review,[16] it will usually be appropriate for the tribunal to give weight to the Commission's decision in the matter. There are two reasons for this. First, the Commission has particular expertise in the area of gaming. Second, there is a public interest in consistency of decision making in the exercise of powers under the Act and this may be advanced if weight is given to Commission decisions.

40 Section 3.3.7(1) of the Act provides that the Commission (and, on review, the tribunal) must not grant an application for approval of premises as suitable for gaming unless it is satisfied as to three matters. These relate to the authority of the applicant to make the application, the suitability of the premises for the management and operation of gaming machines and the net economic and social impact of approval. Section 3.3.8 of the Act then provides that the Commission (and, on review, the tribunal) must determine an application by either granting or refusing to grant approval. This means that, even if the Commission (or the tribunal) is satisfied as to the three specified matters in section 3.3.7(1), it still retains a discretion to refuse an application having regard to other factors which are relevant under the Act. Neither section 3.3.7(1) nor 3.3.8 impose any onus, or burden of proof, upon an applicant; the role of the Commission (and, on review, the tribunal) is inquisitorial in nature rather than adversarial.[17]

41 The Act does not seem to address who is a party to an application for review to the tribunal, whether that application be by the person who has applied for the approval of the premises as suitable for gaming or by a responsible authority which has made a submission. Hence it was appropriate that the tribunal join the council as a party to the proceeding, as it clearly has an interest which is affected by the proceeding.[18] Similarly, if the application for review had been by the responsible authority, it would have been appropriate to join the applicant for approval as a party.

42 The Act clearly contemplates that the responsible authority (which will usually be the relevant municipal council) will have a significant role in the process of determining an application for the approval of a venue as suitable for gaming. Municipal councils constituted under the Local Government Act 1989 are democratically elected. That Act provides that the primary objective of a council is to endeavour to achieve the best outcomes for the local community having regard to the long term and cumulative effects of decisions. In seeking to achieve this objective, a council must have regard to the social, economic and environmental viability and sustainability of the municipal district and the overall quality of life of people in the local community.[19] This means that the Commission (and, on review, the tribunal) must seriously consider a submission made by a municipal council. But this does not give a council a licence to dictate the terms of the decision, or to advance an argument simply based upon a moral objection to gambling or gaming machines, or to disregard empirical facts. Further, notwithstanding the importance of the role of a municipal council, the decision must be made within the context of the framework of the gaming machine industry established under gaming legislation.

43 It is clear from section 59 of the Victorian Civil and Administrative Tribunal Act that the Commission is a party to the review. In the present case the Commission appeared via counsel and made very helpful submissions. However, in future cases, the Commission may decide to let a responsible authority or an applicant be the contradictor (depending upon who is the applicant for review) and otherwise abide by the result. I think the appropriate course is best left to the Commission.[20]

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44 I now return to the question of the meaning of the test in section 3.3.7(1)(c) of the Act that the net economic and social impact of approval will not be detrimental to the well-being of the community of the municipal district in which the premises are located.

45 The use of the word "net" recognises that there may be both positive and negative impacts on the well-being of the local community and that a balancing process is required.

46 Although there is a distinction between economic impacts and social impacts, there is likely to be such an overlap between the concepts that it will generally be more helpful, and more convenient, to consider these impacts together.

47 The impact of "approval" should be taken to be the impact that results from the approval of premises as suitable for gaming. This impact will not only depend upon the location and nature of the premises concerned, but also upon any conditions that may be imposed upon the approval, including a condition as to the number of gaming machines permitted or a condition that existing machines in other venues be removed. The test requires a focus on the marginal impact that is likely to result from the approval of premises; it is not directly concerned with existing impacts or with the average impact of gaming machines.

48 The test is only concerned with the well-being of the community of the municipal district in which the premises are located. This may produce anomalies, particularly in relation to a proposed venue near the boundary of two municipal districts.[21] However there is no reason why the Commission (or, on review, the tribunal) could not consider the well-being of the community of the adjacent municipal district in exercising the discretion under section 3.3.8 of the Act.

49 The test does not require the Commission (or, on review, the tribunal) to be satisfied that there will be a net positive economic and social impact of approval; it is sufficient that the Commission (or, on review, the tribunal) be satisfied that the net economic and social impact of approval will be either neutral or positive.

50 It is unlikely that the Parliament intended that the Commission (or, on review, the tribunal) conduct a quasi Royal Commission into gaming machines each time it was required to determine whether or not to approve an application of premises as suitable for gaming. Rather Parliament should be taken to have intended that the question be considered in the context of the framework of the Act and the framework of the gaming industry established under the Act. Thus the tribunal ought to consider the test in the context that the operation of up to 27,500 gaming machines in Victoria is lawful, that gambling is a valid activity for Victorians, and that responsible gambling should be fostered, not only to minimise harm caused by problem gambling, but also to accommodate those who gamble without harming themselves or others. Given the statutory framework, it would be illogical for the tribunal to conclude that the net economic and social impact of the approval of premises as suitable for gaming will always be detrimental to the well-being of the community of a municipal district in which the premises are located.

51 Although the test requires consideration of the impact of approval on the well-being of the community of the municipal district in which the premises are located, logic and common sense require this to be considered in the context of the spatial impact of the gaming machines to be installed in the venue concerned. Thus, in the present case, the primary impact of approving the venue, with 20 machines, will be upon persons living or working in Drouin. Lesser impacts are likely in relation to persons living or working away from Drouin; with little or no impact likely further away, even though such areas might be within the municipal district concerned. It is quite unlikely that approval of the proposed venue in Drouin will have any impact upon persons living or working in Trafalgar or in Noojee.

52 The installation and use of gaming machines in a particular location will usually result in a reduction in gaming expenditure at other locations. Expenditure on any newly provided good or service usually involves the transfer of expenditure from existing goods or services; although some of the new expenditure may be from savings. In an established market, the most common form of transfer is from the provision of the same good or service in another location. I suppose it is theoretically possible that an expenditure transfer may have a relevant impact on the community by diminishing the overall level or quality of facilities available to the public.[22] But in most cases this is unlikely to be an issue. What is clear, however, it that where there is likely to be a transfer of gaming expenditure from existing venues within a municipal district to a new venue (or a venue with additional machines) within that municipal district, this will be a relevant consideration in assessing both positive and negative impacts on the community of the municipality. Further, it will be a factor that must be taken into account in assessing the likely increase in gaming expenditure for the municipal district as a whole.

53 I should add that the nature of the test - which requires a balancing of positive and negative impacts of an economic and social character - is not dissimilar to the test of "net community benefit" which has been used in planning decisions over the last 30 years.[23] Thus the assessment of the net economic and social impact of an approval is not just concerned with direct impacts. It is also concerned with any indirect effect of the approval, provided there is a sufficient nexus between the approval and the effect. In this respect the test is similar to that under the Planning and Environment Act 1987, which I dealt with in Australian Conservation Foundation v Minister for Planning.[24] In that case I observed that:

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54 There is a fundamental dilemma when it comes to the control of gambling.

55 For many people, gambling is fun. For convenience, I will call this "recreational gambling". The recreational gambler makes a free choice: as to whether or not to gamble; as to the event the subject of the gamble; and as to the amount to be gambled. In Victoria, the Parliament has decided that recreational gambling should be accommodated in a fair, taxed and corruption-free system. Thus there is a case for recreational gambling to be reasonably accessible, as this will tend to provide opportunities for the enjoyment of gambling. It will also provide economic benefits to the State, not the least of which is the contribution it makes to taxation revenue.

56 But it is also true that gambling causes social harm. Sometimes this is described as "problem gambling". It has been estimated that about 1% to 2% of gamblers are problem gamblers;[26] although the amount these gamblers lose is likely to be a much higher percentage of all gambling losses. Gambling problems can cause economic ruin, family breakdown, crime and depression. A problem gambler inflicts harm on others. Often society has to pick up the pieces.

57 In theory, gambling might be regulated so as to allow recreational gambling, but prevent problem gambling. But experience tells us that this is impossible. People who are, or who might become, problem gamblers are not of any particular age, gender or ethnic background. Such people do not live in particular suburbs or country towns. They do not universally belong in any particular socio-economic class or group. They do not carry a badge on their forehead. There are problem gamblers, or potential problem gamblers, in the midst of every sector of society. This is particularly the case with gaming machines. The "good" achieved by making gambling opportunities more accessible will always be accompanied by the "bad" of increasing the prospect of problem gambling. This is the fundamental dilemma when it comes to gambling control.

58 There are methods of addressing problem gambling, other than by depriving or restricting access to legal gambling: for example, controls over advertising and automatic teller machines, the provision of counselling and education, and the like. These methods have little impact upon the recreational gambler, who is left free to exercise an individual choice as to whether or not to gamble. However it is also clear that these methods will not eliminate problem gambling.

59 Not everyone would agree that the decision to engage in gambling should be left to the individual. Some would regard gambling - or certain forms of gambling - as immoral. Others would regard gambling, especially the use of gaming machines, as mind numbing activities. As a result, these people would have it that gambling, or certain forms of gambling, should not be permitted or, at least, should be discouraged. However, in my opinion, it is not the role of the Commission or the tribunal to give effect to these sentiments in making an assessment pursuant to section 3.3.7(1)(c) of the Act. The Parliament has enacted laws to foster responsible gambling. In doing so, it has sought to balance competing considerations. On the one hand, the Parliament has sought to accommodate those who gamble without harming themselves or others; and, in so doing, generate substantial tax revenue which can be used to provide public goods and services. On the other hand, Parliament has sought to minimise harm caused by problem gambling. Commissions and tribunals must seek to give effect to the decision of Parliament.

60 For what it is worth, I also believe that people should be free to spend their money as they choose, unless there is an overwhelming reason to the contrary. There will always be critics who will assert that certain people waste their money, whether on cars, large houses, alcohol or the like. But it will rarely be the case that prohibition is the answer. Our society is built upon freedom of choice and its flip-side, individual responsibility.

61 In my opinion it is also clear that the Parliament intends that the Commission and the tribunal make their judgments on the basis of an empirical understanding of the relevant facts, not by reference to philosophical or moral values.[27]

62 Given the nature of the dilemma I have identified, I suggest that one method of assessing net impacts will be: first, to make factual findings concerning the impacts generally; second, identify positive impacts; third, identify negative impacts; and, fourth, balance the positive with the negative to ascertain the net impacts. I should not be taken as laying down some universal approach. Sometimes a particular factor will stand out; with the consequence that this may be an over-riding consideration. However, I think this four stage approach is appropriate in the present case.

63 Over the last ten years there have been a number of important studies into the social and economic effects of gambling, particularly in the context of gaming machines. Thus, before embarking on this four stage approach, it may be helpful if I refer to some previous evaluations of the social and economic effects of gaming. I propose to summarise three of the most relevant studies.

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64 In 1997 the VCGA published a study titled "Social and Economic Effects of Electronic Gaming Machines on Non-Metropolitan Communities".[28] The study covered the social and economic benefits and costs in five regions, one of which was the Shire of Baw Baw. Overall the study suggested that increased gambling expenditure was at the expense of savings, rather than expenditure on other items, such as retail goods, with the result that the gaming industry was generating increased economic activity and employment in Victoria. The authors of the study also commented that, based upon the data they collected, it would appear that the social consequences for most gaming machine users were benign.

65 In November 1999 the Productivity Commission[29] published a report titled "Australia's Gambling Industries". The method used in this report was one based upon the discipline of welfare economics, whereby all impacts are assessed under the umbrella of economic impacts. This method relies heavily on notions such as consumer surplus, producer surplus and the identification of social costs. The Productivity Commission identified the principal benefit of gaming as comprising the increased satisfaction that consumers gain from having access to legalised gambling; whereas the costs relate mainly to problem gambling and its social repercussions. The Productivity Commission sought to make a "ball park" assessment of the dimensions of these benefits and costs. It concluded, on the basis of this analysis, that the benefits from gambling (including tax revenue) range from $4.4 billion to $6.1 billion per annum for 1997/98; and the costs of gambling range from $1.8 billion to $5.6 billion per annum for the same year. Hence the Productivity Commission concluded, using "ball park" estimates, that the impact of gambling in Australia was somewhere between negative $1.2 billion to positive $4.3 billion per annum.

66 In March 2000 the VCGA published a report titled "The Economic Impact of Gambling" which had been prepared by the National Institute of Economic and Industry Research ("the NIEIR"). The methodology used in this report was to trace cash flows from gaming by use of an econometric model and to then calculate the resultant impact upon economic activity. The NIEIR study alleged that there was a fundamental flaw in the Productivity Commission study. It said that the Productivity Commission compared long run gross benefits from gambling with current social costs of gambling; which had the effect of considerably underestimating the net benefits of gambling. The NIEIR claimed that most gambling had been financed out of net cash savings and had had the effect of increasing economic activity. Further its report claimed that most gamblers, even heavy gamblers, can afford to do so.

67 Certainly these three studies provide general support for the current application. But the Parliament clearly desires that there be a localised assessment of the social and economic impact of a particular venue operating gaming machines. In turn this must be predicated on the proposition that the character, and composition, of different areas may determine whether the social and economic impact is good or bad.

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68 No-one has suggested that the installation of 20 gaming machines in the Family Hotel at Drouin will be unsuccessful. Rather there is a consensus that the hotel is likely to achieve its projection and that each of the gaming machines is likely to earn $1,400 per week. This represents a total machine income of $1,456,000 per annum.

69 Because the approval will make the Family Hotel more profitable, this increases the chances that the hotel facilities will be upgraded in the future. This is also made more likely because upgraded facilities will be necessary for the venue to compete with existing gaming venues in Warragul. Evidence was given in this case of an actual intention on the part of the applicant to upgrade the hotel if the application was successful. I accept that evidence, as it is inherently likely.

70 I find that it is likely that a substantial proportion of the additional gaming expenditure will be derived from persons who live or work in Drouin; with a lesser proportion deriving from persons who live or work in Warragul. Some of the expenditure will be derived from persons who live or work in the balance of the shire, with a smaller proportion again deriving from persons who live or work outside the shire. This reflects the diminishing attraction of a gaming machine venue with distance.[30] It also reflects the fact that gaming machine venues exist in many rural towns, so there is generally no need for patrons to travel long distances to engage in gaming. Surveys have shown that a substantial proportion of gaming patrons live or work within 5 kilometres of a gaming venue.[31] A survey of Family Hotel patronage confirms a similar pattern exists at the moment, with 74% of bistro patrons living in Drouin.

71 I also find that a substantial proportion of the expenditure which will occur using the 20 proposed machines at Drouin will be transferred from existing machines in Warragul. Some expenditure may also be transferred from machines outside of the shire, for example those in Pakenham or Moe. It is difficult to precisely ascertain the proportion of expenditure at Drouin which will be "new" expenditure, as opposed to existing gaming expenditure by members of the community of the shire which will be transferred to the Drouin venue. However I would regard the applicant's estimate to be reasonable: namely that 40% of the expenditure will be "new" and 60% will be transferred by existing members of the community of the shire to the new venue. In support of this conclusion I rely upon evidence which was placed before the tribunal as to the impact of new venues on existing venues. I also take account of the fact that Drouin (and, for that matter, Warragul) are located towards the centre of the shire and, as twin towns, are relatively self contained.

72 It follows from the foregoing that I also find that the approval of the venue with 20 gaming machines will increase the total gaming expenditure by residents of the shire by about $600,000.[32]

73 It is desirable to now refer to relevant statistics about the shire, and gaming within the shire, in order to set this increase in gaming expenditure in context. According to Department of Sustainability and Environment estimates, the 2004 population of the shire was 37,639. The adult population of the shire in this year was 27,610. At present there are three gaming venues within the shire, which house a total of 155 gaming machines. Hence the number of gaming machines per 1,000 adults in the shire is 5.62. This is to be compared with the number of gaming machines per 1,000 adults in country Victoria generally, which is 7.15. The approval of the proposed venue in Drouin, with 20 machines, will increase the number of gaming machines per 1,000 adults in the shire to 6.34. Significantly, this ratio will still be substantially below the ratio for country Victoria generally.

74 In the year 2003/04 gaming machine expenditure in the shire was $9,275,577. Since this time 15 additional machines have been approved in Warragul. If those machines had been in operation in 2003/04, and after allowing for transferred expenditure, it is likely that the total spending would be about $9,700,000. If the 20 additional Drouin machines had also been in operation in 2003/04, and after allowing for transferred expenditure, I find that the total spending would be about $10,300,000 per annum. Thus, if the proposed venue is approved, the average gaming machine expenditure per adult will be $373 (up from $351 if the venue is not approved), which is still substantially less than the Victorian country average of $474 and very much less than the State average of $600.

75 The shire - and in particular Drouin - is not disadvantaged. On most statistical scores, the shire registers as average. For example, using the Australian Bureau of Statistics "SEIFA Index of Relative Socio-Economic Disadvantage"[33], the shire scores 1009.66, compared with an average for Victoria of 1014.59 and an average for country municipalities of 998.86. It is very close to the average for the State in terms of socio-economic character. The unemployment rate for Baw Baw is 4.3%, compared with a rate for the State of 5.7% and a rate for country Victoria of 7.0%. Indeed, the unemployment rate for Baw Baw West (which includes Drouin and Warragul) is only 3.9%. This indicates a very healthy local economy.

76 Thus, if the proposed venue is approved it will result in a penetration of gaming machines per adult that is lower than for the rest of Victoria; and a gaming expenditure per adult which is less than the rest of Victoria. And this will occur in a municipality which is not comparatively disadvantaged.

77 It is desirable to briefly discuss the impact of approving the proposed Drouin venue, with 20 machines, on the flow of monies. As I have explained, if the Drouin venue is approved, the residents of the shire will spend approximately $600,000 more on gaming than they do at present. One-third of this amount ($200,000) will be paid to the State Government as additional tax. A further 8.33% ($50,000) will be paid to the State Government's Community Support Fund. This fund is primarily used to fund public facilities and services. A further 33% ($200,000) will be paid to the operator of the gaming machines, which in turn will be spent on wages, supplies, taxation and dividends. The balance (25% or $150,000) represents the net earnings of the venue operators at both the Drouin venue and the venues from which gaming expenditure will be transferred. As the gross revenue received by the Drouin venue will be 25% of, say, $1,456,000 ($364,000), there will be other venues that will see a reduction in gross revenue as a result of the competition from the Drouin venue. But the fact that some venue operators will be losers is of no real moment: there is no evidence that any of these existing venues will be put out of business if the Drouin venue is approved.[34]

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78 There is little doubt that the approval of the proposed Drouin venue would make gaming more accessible to persons living or working in Drouin. To the extent that such persons engage in "recreational gaming" - and not "problem gambling" - this would be a positive social and economic impact. It may be useful to describe some of the dimensions of this impact.

79 To the extent that additional gaming expenditure emanated from persons engaged in "recreational gambling", conventional economic theory would identify such expenditure as giving rise to a "consumer surplus" - that is, the consumer should be regarded as having received a benefit from expenditure made in the exercise of the consumer's free choice. But it is not necessary to rely upon the discipline of welfare economics. It is sufficient to conclude that, for recreational gamblers, the improved accessibility of a gaming venue to Drouin residents and workers will confer substantial economic and social benefits. This will be reflected in greater convenience; as well as a reduction in travel time, with related benefits in terms of road accidents and vehicle operating costs.[35] Indeed, it is likely that much of the gaming expenditure that is transferred from Warragul to the proposed Drouin venue will be from Drouin residents. Hence the approval of the Drouin venue will mean that more Drouin spending will stay in Drouin, generating jobs and economic activity in Drouin.

80 Another social and economic benefit of approving the proposed Drouin venue is that it will increase the choice available to the consumer. In part the improved choice available to the consumer will be the availability of a facility which is more accessible to Drouin residents and workers: and, to that extent, is substantially the same benefit as that outlined in the previous paragraph. However there is another dimension. The provision of the proposed venue will also offer a social and economic benefit by improving the choice available to, for example, Warragul residents. Some of these residents may prefer gaming in an hotel to a club; and may not like the service of the hotel facility in Warragul. The fact that the choices available to the consumer are enlarged also promotes competition between venues which, in turn, might be thought to improve the facilities and services that are made available.[36]

81 It is also apparent that the increase in net gaming expenditure is likely to generate at least some increase in net economic activity in the shire. To the extent that gaming expenditure is transferred from existing venues to the proposed venue, it may be assumed that there will be no change in economic activity in the shire (although this may be redistributed). Further, to the extent that the remaining net expenditure on gaming is not transferred from other local expenditure (in particular retail expenditure), but comes from savings or expenditure outside of the municipality, then this expenditure will cause some increase in local economic activity. This increase would be expressed in additional employment and associated expenditure. Such an outcome, although modest, would be consistent with the December 1997 study into social and economic effects of electronic gaming machines on non-metropolitan communities.

82 The approval of the venue for gaming will also lead to an upgrading of the hotel facilities, for the benefit of all patrons, not just those who engage in gaming. The details of this are outlined in the Commission's decision. The upgraded facilities will be of social and economic benefit to the community of the shire.

83 It is also likely that the approval of the proposed venue will result in greater support being given to community and sporting organisations within Drouin. In this respect evidence was given by directors of the applicant of an intention to use some of the proceeds of gaming to support local community and sporting organisations. In my opinion, the likelihood of this support being offered is significantly greater if approval is given than if it is refused. The fact that gaming venues must lodge a Community Benefit Statement each year, which outlines donations which have been made to community organisations, is a further factor that makes this likely.

84 As I outlined earlier, a major beneficiary of Victoria's gaming industry are Victorians as taxpayers or recipients of services. It must be remembered that a significant proportion of the additional gaming machine revenue which will result from the approval of the proposed venue[37] - indeed, possibly up to 50% - will eventually be collected as tax. In turn these funds will be spent on facilities and services - or to reduce other taxes - for the benefit of all Victorians, including citizens in the shire. Admittedly, it is hard to directly relate additional spending in the shire (or reduced taxes from the shire) to the additional tax collected by the approval of the proposed venue. But it remains true that this is yet another benefit of the proposal which must be brought into account.

85 The approval of the proposed venue in Drouin will also reinforce the objectives of the Baw Baw Planning Scheme in relation to the development of Warragul and Drouin. The municipal strategic statement, which forms an important part of the scheme, identifies the development of Warragul and Drouin as "twin towns". For example, clause 28.08-1 states that planning policies:

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The Productivity Commission identified that, when analysed on a State by State basis, there was a positive correlation between gambling expenditure per adult and the incidence of problem gambling. However I am unaware of specific evidence as to the impact of a new gaming venue on problem gambling when residents of the area concerned already have good access to gaming opportunities.

90 In the absence of specific evidence, it is possible to theorise. One theory might be that the provision of a venue in Drouin will make no difference to the incidence of problem gambling, because problem gamblers would hardly be put off by the need to make a short trip to Warragul. Another theory might be that the approval of the proposed venue in Drouin will increase the proportion of Baw Baw gamblers who are problem gamblers, because Drouin residents are currently protected from gambling. But the theory that I would regard as most likely is that while the absolute number of problem gamblers within the shire may increase, the proportion of gamblers who are problem gamblers will remain much the same. Further, the size of this absolute increase is likely to be modest.

91 This raises the thorny problem of who must take responsibility for problem gambling. As gambling is an individual choice, there must be individual responsibility. But as society has chosen to establish and maintain a gaming machine industry, it is also a matter of societal responsibility. The difficult task is to determine to what extent we should favour free choice and personal responsibility; and to what extent we should deny free choice in order to protect the vulnerable. In particular, when should adults be denied access to gaming machines so as to protect the small minority who are likely to suffer harm as a result of their use?

92 Although there have been many studies of problem gambling, I am unaware of any study which analyses the spatial dimension of the problem in terms of towns, suburbs and local government areas. Yet the discretion that must be exercised in proceedings such as the present have a spatial dimension. The decision relates to a particular venue, which will draw its demand from surrounding areas, and is to be based upon the well-being of a discrete spatial unit. Frankly, it is necessary to theorise.

93 Recent legislative and government policy concerning the location of gaming in Victoria seems to be based on two theories. First, problem gambling is more likely if an area has a high number of gaming machines per adult person. Second, problem gambling is more likely if an area is relatively poor. Certainly these theories form the foundation of the regional limits on gaming machines provided for in section 3.2.4 of the Act. Generally such regional limits have been imposed in respect of regions that have a comparatively high number of machines and are relatively poor: such as the western and northern suburbs of Melbourne, Dandenong and the Latrobe Valley.[40] Indeed, in announcing the regional limits on 2 March 2001 the Minister for Gaming concentrated on the comparative number of gaming machines, and the comparative level of gaming expenditure, per adult in each of the areas the subject to a limit.[41] For example, in relation to the Maribyrnong Plus region in western Melbourne, he said (in reference to the Maribyrnong community):

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95 In my opinion, the positive impacts of the proposed venue substantially outweigh the negative impacts. Thus I am satisfied that the net economic and social impact of the approval of the proposed Drouin venue, with 20 gaming machines, will not be detrimental to the well-being of the community of the Shire of Baw Baw. Obviously I make this assessment by reference to what I regard as the relevant test; and, in particular, I make it in the context of the gaming industry established under the Act.

96 It is significant that Victoria's Parliament has decided to accommodate those who use gaming machines without harming themselves or others. The Government has permitted 30,000 gaming machines to be used throughout Victoria to give effect to Parliament's decision. I think it must be inferred that the Parliament would not have made such a decision if the Parliament considered that the net economic and social impact of its decision would be detrimental to the well-being of the Victorian community as a whole. Given this, broad statistics would suggest that it is improbable that the approval of the Drouin venue, with 20 machines, should be regarded as being detrimental to the well-being of the Baw Baw community. First, the Shire of Baw Baw is a typical Victorian community - indeed, in some respects, it is comparatively advantaged. Second, when looked at comparatively, the shire is not overloaded with machines or venues; and gaming expenditure per adult in the shire is substantially less than that in country Victoria and the State. Logically, these issues do not determine the question, but, in my opinion, they are powerful considerations. If additional gaming machines are not appropriate in Drouin, how could 30,000 gaming machines be regarded as appropriate in Victoria?

97 In any event, when one looks beyond broad statistics, it is clear enough that the positive impacts of the proposed venue substantially outweigh the negative impact that there will be some slight increase in the level of problem gambling. It is unnecessary to repeat the list of positive benefits. On any view they are broad ranging and substantial. By contrast, the impact on problem gaming is likely to be modest, albeit difficult to define and, to some degree, a matter of speculation.

98 I regret that I cannot agree with the Commission's reason for refusing to approve the proposed Drouin venue. No evidence was placed before the tribunal to support the theory that people may be choosing to live in Drouin because it does not presently have any gaming machine venues. I think it is an unlikely theory. The choice to live in a particular town is usually the result of some historical association, a family or social link, or - even more commonly - the existence of employment opportunities. I cannot accept that some persons, susceptible to problem gambling, would deliberately choose to live in Drouin so as to prevent their exposure to gaming. Most adults living in Drouin either have a car or access to a car. Warragul is extremely convenient to Drouin residents. For those wishing to play the gaming machines but without a car, the Warragul Club offers a courtesy bus and the Warragul Country Club offers a taxi subsidy. I have no doubt that most Drouin residents regularly go to Warragul. If a Drouin resident was susceptible to problem gambling it is difficult to see how the proposed Drouin venue would substantially increase the temptation that already existed by reason of the facilities in Warragul.

99 When it comes to problem gambling there is a risk that too much faith can be placed in decisions to approve particular venues as suitable for gaming, on the theory that such decisions will have a substantial impact on the incidence and seriousness of the problem. I am sure that it will never be possible to eliminate problem gambling - unless gambling itself is eliminated. The task of minimising problem gambling requires a multi-dimensional approach. It goes well beyond the approval of venues or the regulation of the number of gaming machines. It is likely to include education, venue architecture, control over operating hours, the availability of electronic teller machines, the method of paying prizes, the provision of support services, community partnerships, advertising control and government advertising designed to discourage problem gambling. Further, it is essential that these measures be properly informed by research. With more than $800 million being taken each year as tax from Victorian gaming machine users, there is every reason to think that the State could adopt a multi-dimensional approach to tackle problem gambling with vigour.

Branbeau PL v Victorian Commission of Gambling Regulation

At a glance

Court

Decision date

Before

Source

Judgment (111 paragraphs)

Branbeau PL v Victorian Commission of Gambling Regulation (Occupational and Business) [2005] VCAT 2606 (16 December 2005)

Parties

Cases Cited (4)