Section 3.3.14(2) Gambling Regulation Act 2003; Approval of premises as suitable for 50 electronic gaming machines; Net economic and social impact not detrimental to wellbeing of community; Risk of problem gambling; Accessibility and convenience of gambling in Brighton and Bayside; Definition of community to be considered - whether Brighton or Bayside.

Owners Corporation of 68 Bay Street and 1 Barkly Street, Brighton

Bright Newbay Pty Ltd v Bayside CC [2010] VCAT 1347

1. The decision of the Responsible Authority is set aside.
2. In permit application 2009/427 a permit is granted is granted and directed to be issued for the land at 329 - 331 New Street, Brighton in accordance with the endorsed plans and subject to the conditions set out in Appendix A. The permit allows:
   • Buildings and works pursuant to clause 34.05-4 of the Bayside Planning Scheme; and
   • Use and installation of not more than 50 electronic gaming machines pursuant to clause 52.28 of the Bayside Planning Scheme.

1. The decision of the Victorian Commission for Gambling Regulation dated 1 April 2010 is varied subject to the following conditions:
   • That approval does not take effect until the Commission is satisfied that the grant of approval is in compliance with the direction made by the Minister for Gaming under section 3.2.3 of the Gambling Regulation Act 2003, relevantly the maximum number of gaming machines permitted to operate in the State, the proportion of which is to be located outside the Melbourne Statistical Division and the allocation between hotels and clubs.
   • That approval does not take effect until the Commission has notified the applicant in writing that the premises have been inspected for the purposes of section 3.3.7(1)(b) of the Act and the Commission is satisfied that the premises are suitable for the management and operation of gaming machines.
   • That approval does not take effect until the applicant satisfies the Commission that the applicant has obtained a permit under the Planning and Environment Act 1987 permitting the premises to be used for gaming on gaming machines.

Mr C Canavan QC and Ms S Porritt, barrister instructed by Bazzani Scully Brand lawyers.

• Ms C Peterson, town planner of Ratio
• Mr K Twite, town planner of SJB Planning
• Mr M Clyne, gaming industry consultant (his evidence was accepted by all parties without cross-examination)
• Ms M Lughermo, accountant (her evidence was accepted by all parties without cross-examination).

• Ms V Colmer, social planner of Bayside City Council
• Mr D Iles, town planner of Hanson Planning.

For First Respondent/Victorian Commission for Gambling Regulation

Ms C Hooper of Victorian Commission for Gambling Regulation.

For Owners Corporation of 68 Bay Street and 1 Barkly Street, Brighton

The New Bay Hotel comprises a two-storey hotel building on the southwest corner of New and Bay Streets in Brighton and an open-air gravel car park on the northwest corner of the intersection. The hotel currently contains a public bar and dining/lounge areas towards the front and middle of the building; a rear restaurant/bistro area (currently disused); a TAB between the bar and the bistro; and an upstairs function area and associated office areas.

P3510/2009 - to undertake buildings and works to existing hotel and to use and install gaming machines.

B111/2010 - the approval of premises as suitable for gaming (installation of 50 EGMs).

P3510/2009 - section 77 Planning and Environment Act 1987

B111/2010 - section 3.3.14(2) Gambling Regulation Act 2003

Clause 34.05-4 to construct and/or to construct or carry out buildings and works to the existing building in B5Z.

Clause 52.28 to install and use electronic gaming machines (EGMs)

Beretta's Langwarrin Pty Ltd v Frankston CC (includes Summary) (Red Dot) [2009] VCAT 74

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

CK & Sons Pty Ltd v Bayside CC [2010] VCAT 505

Kilsyth and Mountain District Basketball Association Inc. v Victorian Commission for Gambling Regulation [2007] VCAT 2

Macedon Ranges Shire Council v Romsey Hotel Pty Ltd Anor [2008] VSCA 45

M & S Whelan Investments Pty Ltd v Alpine SC [2008] VCAT 291

Prizac Investments Pty Ltd v Maribyrnong CC [2009] VCAT 167

Romsey Hotel Pty Ltd v Victorian Commission for Gambling Regulation Anor [2009] VCAT 2275

Shimmerbridge Pty Ltd v Bayside CC [2008] VCAT 1428

1. Bright Newbay Pty Ltd purchased the New Bay Hotel in 2007 and is seeking planning and gaming permission to undertake buildings and works to improve the facilities offered at the hotel, which will include offering electronic gaming machines (EGMs) within the hotel for entertainment.
2. The hotel operates under a general liquor licence, that allows 342 patrons on the premises between the hours of 10.00am and 11.30pm Sundays[1], on Good Friday between 12.00pm and 11.00pm, on Anzac Day (not being a Sunday) between 12.00pm and 1.00am the following day, and all other days (e.g. Monday to Saturday except for those days listed above) between 7.00am and 1.00am the following morning.
3. It is proposed to refurbish the existing hotel to provide a relaunched bistro area, a sports bar, a new café and lounge area, new function rooms and a new gaming/TAB area. These internal alterations will result in various minor buildings and works to the Bay and New Street façades of the existing hotel building, including frameless electronic glass sliding doors as part of a new entry to the hotel in the Bay street façade that will include an internal airlock and an entry canopy to match the existing canopy on the New Street façade. The proposal also includes the rear bistro area being converted into a gaming room that will contain 50 EGMs.
4. The planning application was lodged with the Council in August 2009. It was publicly advertised and the Council received 16 objections that raised amenity and parking concerns; the hotel's location within a strip shopping centre; the risk of problem gambling and the appropriateness of new gaming machines in Bayside and the proximity to a number of educational facilities. On 7 December 2009 the Council resolved to refuse the permit application because a net community and social benefit had not been demonstrated to the wider Bayside community; the proposal was detrimental to the community's wellbeing; the location was not compatible with adjoining and nearby land uses within a strip shopping centre; and it failed to meet the tests and requirements of the Bayside Electronic Gaming Machines Policy 2008.
5. On 15 December 2009, the Council resolved that the application to the Victorian Commission for Gambling Regulation (the Commission) to install 50 EGMs at the New Bay Hotel had not demonstrated there would be a net community benefit. It made a submission to the Commission in these terms in respect of the application to approve the premises as suitable for gaming machines. The Council highlighted concerns regarding the increased gaming machine density particularly in the suburb of Brighton; the potential for an increase in problem gambling; the impact on the neighbourhood character and residents' perception of their community; the diversion of discretionary expenditure away from other businesses; the location of the venue close to the schools and other community facilities; and the impact on residential amenity.
6. On 1 April 2010, following a full hearing, the Commission determined to approve the New Bay Hotel as a suitable venue for gaming with 50 EGMs. The Commission stated that the issues of detriment raised by the Council did not outweigh the benefits raised by the applicant and found that the net economic and social impact of the approval would not be detrimental to the wellbeing of community.

1. There are distinct considerations that need to be made as to the appropriateness of this proposal in light of the separate gaming and planning legislative controls that exist.
2. The buildings and works to the existing hotel were not in dispute amongst the parties present at the hearing other than in relation to how they might impact upon the use and installation of the gaming machines, which we will deal with in the reasons for our decision. Hence, the focus of the hearing was upon the appropriateness of the gaming machines in this venue and in this location.
3. Two discrete permissions are required. The planning permission is focused upon whether it is an appropriate location suitable for gaming and, secondly, the social and economic impacts of the location. The gaming considerations include whether the net economic and social impact of the machines would or would not be detrimental to the wellbeing of the community of the municipal district in which the premises are located. Hence, it is our view that a more detailed analysis of the economic and social impacts upon the community is a matter that is best dealt with as part of the consideration under the Gambling Regulation Act rather than as part of the planning application.

1. Having regard to the submissions and evidence presented by the parties, the issues that we must consider are:
   1. Is the subject land within a strip shopping centre such that the installation and use of the proposed gaming machines would be prohibited?
   2. If the proposal is not prohibited, is the proposed location and premises appropriate having regard to the social and economic impacts of the location of gaming machines and other planning considerations more generally?
   3. Are Council's 2008 and 2010 gaming policies relevant, and, if so, what weight should be given to them?

1. Clause 52.28-4 of the planning scheme provides that the installation or use of a gaming machine(s) is prohibited in a strip shopping centre if the schedule provides that a gaming machine is prohibited in all strip shopping centres on land covered by the planning scheme, which this schedule does.[3] The remainder of the clause then characterises a strip shopping centre as being in an area that meets all of four specified requirements.
2. The parties agreed that the first (business zoning), second (at least two separate buildings on at least two separate, adjoining lots) and fourth (in an area in which a significant proportion of the lots abut a road accessible to the public) of these requirements were satisfied by the subject land. The dispute before us centred on whether the area was one "in which a significant proportion of the buildings are shops". We were taken to a number of Tribunal decisions bearing on this question, including Prizac.
3. Both parties presented planning evidence as to the appearance, function and characterisation of the buildings forming part of this neighbourhood centre, as delineated by the Business 5 Zone. We also undertook a detailed inspection of the centre midway in the hearing.
4. We consider that of the 18 buildings comprising the neighbourhood centre, only two are used as shops - a café occupying two tenancies on the south east corner of the intersection and a fireplace sales outlet (albeit connected with a trade supplies component to the rear).[4] The remainder of the buildings are developed and used as offices, service industries, a function centre, two dwellings and other miscellaneous uses that are not in our assessment regarded as shops under the planning scheme definition in clause 74 or on a plain view.
5. Having regard to the overall number of shops including their position, scale and functioning, we find that they cannot reasonably be regarded as constituting a "significant proportion" of the buildings within this centre, even if this term could be satisfied by less than a majority of buildings being used as such.[5] Instead, we find that they form a minor proportion of the buildings within this centre.
6. Even when putting the determinative phrase to one side, we strongly doubt that an ordinary person would regard this centre as having the character and function of a strip shopping centre, rather than as a small commercial centre with an office/service focus. This position is reinforced by the relatively light level of pedestrian activity observed within the area by all witnesses and confirmed on our inspection.
7. We have considered the findings of the Tribunal in Shimmerbridge Pty Ltd v Bayside CC[6] in which Member Komesaroff (as she was then) held that it may be reasonable to have regard to whether certain buildings had been developed to be capable of use as a shop/s. We distinguish this case on its facts, since we consider that this approach is not generally warranted where there is an almost 100% occupancy rate within the centre such that the use of each building is readily apparent, as is the case before us.
8. In this regard we note that the test in this clause is whether a significant proportion of the buildings "are" shops, which to our mind denotes an intention that this assessment is to be made 'on the ground' at the time of considering an application for the installation and use of gaming machines at a particular premises. Another major distinguishing fact is that the use of land as a shop in the Business 5 Zone would be prohibited, such that any building not currently being used as a shop could not be converted over to such use unless that land was rezoned.
9. Mr Canavan also submitted that such a finding would be generally consistent with what he considered the intent behind the prohibition on gaming within strip shopping centres. He referred to this as policy to prevent gaming from establishing in centres serving a day-to-day convenience role, whereby exposure to gaming opportunities may be heightened and a decision to gamble might be made more impulsively. We have always understood this to be one plank underlying the policy in clause 52.28, although it is not expressly borne out by the wording of the provision or the documentation during the course of the clause's evolution. In any event, for the reasons outlined below, we do not consider that this neighbourhood centre plays such a role and accordingly, we are not convinced that a gaming component could not be suitably established within it.
10. It follows that the application before us would not contravene the requirements of clause 52.28-4.

Is the proposed location and the premises appropriate for the location of gaming machines having regard to the social and economic impacts?

1. The Council expressed concern that there are already two gaming venues in the suburb of Brighton, and this proposal will lead to an unacceptable concentration. The fact that there are other gaming venues nearby does not preclude the introduction of new venues. There is no minimum separation distance required between venues, nevertheless we note that the New Bay and Marine Hotels (being the closer venue) will be separated by about one kilometre.
2. The Council described this proposal as creating a large scale gaming venue in the anchor building of this neighbourhood centre. Having inspected this centre, we think describing the hotel as the anchor is debatable, particularly given our finding in the previous section that this centre has the character of a small commercial centre with an office/service focus. Mr Iles suggested the gaming machines component of the hotel should be innocuous, but we do not agree. There is no such requirement in either the planning or gaming legislation. We are of the view the appropriate way to consider the appropriateness of the New Bay Hotel as a gaming venue is to look at the scale of the use and the layout of the use.
3. In regard to scale, this is essentially a retrofit of an existing building with a mix of activities. The measurement of the floor area occupied by gaming machines per se is not a good guide of the appropriateness of the premises. In this case, it is acknowledged that the floor area for the gaming is lower than the 25% that used to be a requirement in the planning scheme and that is referenced in the Council's 2010 policy (a matter we will comment further on shortly). The number of machines (50) is the same as the Marine Hotel, the only difference is the amount of floor space dedicated to the provision of the machines. We have inspected both Milanos and the Marine Hotel in Brighton (the other two existing venues). We note these premises have variations in the gaming floor area that creates differing atmospheres at each. However, at the end of the day, the gaming area is but one component of a range of services and facilities offered within each of the premises. This proposal is no different.
4. In regard to the layout of the premises, we agree with the concern expressed by the Council about the direct accessibility of the gaming room. This is to be contrasted with the Marine Hotel where the gaming room is essentially "internal" to the building. Ms Peterson's evidence was that visibility to the street is not of concern since the gaming room sits behind a smoker's area and Mr Twite's evidence is that there were no significant "ant trails" past this site along New Street such as could be expected along a regular pedestrian route of passage, particularly comprising school children. On questioning by the Tribunal, Ms Peterson agreed that it would be desirable to limit direct access from the street to the gaming room, hence we find that the doorway into the gaming room from New Street should be closed and replaced with a wall. Ms Peterson also indicated a preference for there to be as much separation as possible (having regard to the constraints associated with the layout of the existing premises) between the gaming room and the smoking room. As such, she suggested, and we agree, that closing the door between New Street and the gaming room will have the added benefit of requiring patrons to move through the café to access the smoking room to encourage a greater break in EGM play. Ms Peterson also suggested a change to the wing wall between the proposed cafe and gaming room so that it runs in a east-west direction rather than partly north-south and partly east-west, and we support this change. Aside from these changes, we consider that the layout of the premises and the range of activities offered within it would otherwise be suitable for the introduction and use of 50 EGMs.

Are Council's 2008 and 2010 gaming policies relevant and, if so, what weight should be given to them?

1. As far as the 2008 policy is concerned, we find it is relevant as it has been adopted by the Council. We agree with the Tribunal's findings in CK & Sons that it should be given little weight because it is not contained in the planning scheme as either a reference of incorporated document; and it has not been through a public consultation or review process, such as a planning scheme amendment process. Further, it has for all intents and purposes been replaced by the 2010 gaming policy that has been adopted by the Council and forwarded to the Minister for Planning for authorisation to form part of a planning scheme amendment.
2. In regard to the 2010 policy, again we find that it is relevant because it is a Council adopted policy such that it represents the Council's views on the appropriateness of gaming within its own municipality and reflects its current strategic analysis. There are aspects of the policy that we consider are appropriate such as its intent to provide further detail on potentially appropriate (or inappropriate) locations and premises for gaming machines given clause 52.28 is fairly generic and lacking in specific guidance on how to assess this. Clearly, a range of factors will be relevant in considering the appropriateness of a location and, to this extent, factors such as the density of machines and the zoning of the land as well as how close it is to a sensitive use appear to us to be suitable considerations in determining the appropriateness of a location and a premises.
3. The Council submitted that the absence of a gaming policy in its local section of the planning scheme now essentially means that this 2010 policy should be given greater consideration as it is not contrary to and does not compete with any existing planning policies in the planning scheme. We find this argument flawed for two reasons. Firstly, this argument can only be entertained if there is inherent legitimacy in the policy making process; and secondly, if there are problems with the wording of the policy as drafted, it brings into question the weight that should be given to the policy.
4. We see a number of potential problems associated with the 2010 policy, including:
   • The policy has not been the subject of any consultation with the community. The consultation that has occurred was in regard to the 2008 policy and is, in our opinion, limited. It consisted of three focus group sessions with 15 representatives and did not include a fully representative participation on behalf of the gaming industry[7]. It also included "18 submissions" and we think this description is a little generous given the 18 included two comments in a Leader newspaper and four phone calls[8].
   • One of the objectives of the policy is "to ensure that gaming venues achieve a net community benefit". In our opinion, this objective is contrary to clause 11 of the State Planning Policy Framework, which contains an endeavour to integrate the range of policies relevant to the issues to be determined and to balance conflicting objectives within those policies in favour of net community benefit and sustainable development. We agree with the findings in Prizac Investments Pty Ltd v Maribyrnong CC[9] and CK & Sons Pty Ltd v Bayside CC[10] that clause 11 does not set out a particular test, unlike the provisions contained within section 3.3.7 of the Gambling Regulation Act 2003 - that the net economic and social impact will not be detrimental to the wellbeing of the community of the municipal district in which the premises are located. We agree with Prizac that there are different roles and responsibilities under the gaming application and the planning application. It appears to us that this 2010 policy objective may be contrary to the gaming legislation that mandates no net community detriment (as opposed to achieving a net community benefit). Ultimately, we agree with the findings in Prizac and CK & Sons that a proposal does not necessarily fail if an applicant cannot demonstrate a net benefit, particularly in a case where there may be a neutral outcome. At the same time, the objective to balance policies in favour of net community benefit where possible is generally relevant to planning permit applications for the use of land for gaming.
   • The policy states that gaming machines should be located more than 800 m from sensitive community facilities including schools, childcare centres, libraries, medical centres, etc. We have some concern about the appropriateness of the inclusion of this threshold distance. Ms Peterson provided a map showing the practical impact of this distance, which when applied to just the schools demonstrate that much of the municipality could not incorporate gaming machines. When other sensitive uses (as found in the Melways) are added in to the map, there is little of the municipality remaining available for gaming machines. We note that Mr Iles acknowledged that this aspect of the policy "may be challenged as it might not be helpful". Mr Iles' opinion was that the threshold distances may be halved. In our opinion, the incorporation of a distance sets an expectation for both Council and the community that may be unreasonable. We note that other gaming policies that exist in local sections of other planning schemes at present tend to include more generic references to have regard to the location of sensitive uses and pedestrian movement, which may be a more appropriate approach. At a minimum, causal linkages between sensitive uses and gaming venues should be investigated further through research, including the sensitivity of uses such as a library, medical centre and the like.
   • The Council relied upon the gaming policies contained in the Hume and Greater Bendigo Planning Schemes in support of its policy's inclusion of a requirement to achieve a net community benefit. However, the content of the gaming policies are likely to vary depending upon the socioeconomic profile of the municipal district. For example, Ms Peterson pointed out that the socioeconomic profiles of the municipalities of Hume and Greater Bendigo vary to that of Bayside, hence the content of the policy in general terms would not be readily transferable to a policy that would be geared towards the socioeconomic profile of the municipal district of Bayside. Further, Ms Porritt highlighted that these policies were incorporated into their planning schemes prior to the Prizac and CK & Sons decisions. As such, it seems to us that there should be a review of the existing gaming policies within all planning schemes to ensure that a requirement to achieve a net community benefit is modified to accord with clause 11 and/or the Gambling Regulation Act 2003.

1. The key issue of concern to the Council is the accessibility of gaming machines within its community, which is linked to a concern about the opportunity for "convenience gambling". As a result, there were three factors that the Council emphasised in expressing its view that this hotel is not an appropriate location for gaming. They are:
   • This neighbourhood centre serves a role of providing for the daily needs of the surrounding community;
   • There is pedestrian traffic in the vicinity of this site; and
   • It is located close to sensitive uses, particularly schools.
2. We are not persuaded that this neighbourhood centre focuses on providing for the daily or general convenience needs of the surrounding community. At present, the centre contains (amongst others) a fireplace shop, an art gallery and café, a motor repair business and a range of commercial premises including a large proportion of offices. We are not persuaded by the submissions and evidence that these uses form part of the day-to-day convenience needs of residents. Rather, we agree with Mr Twite that these uses are more likely to be a destination visit for a particular reason - i.e. to purchase a fireplace or a piece of artwork, to meet with a service provider or to have a car serviced. These are goods and services that, in our view, are not daily purchased goods or regular services for most people.
3. Whilst there is some pedestrian movement along Bay and New Streets, we are persuaded by Mr Twite's evidence that the hotel is not located on an obvious "ant trail". The closest school is Firbank Grammer School, which is located approximately 270 m to the southeast. There was no evidence provided of any regular pedestrian activity associated with the drop-off and pick-up of school students in proximity to this hotel. We note that the Marine Hotel already provides exposure to gaming for sensitive uses in this area including the schools. We find the interviews with the two school principals in this area did not reveal any known problems of gambling amongst their students at present. Ms Colmer and Ms Peterson both gave evidence that there is no causal link associated with underage gambling as a result of the proximity of gambling venues to schools.[11]

1. In summary, we find this location and this premises appropriate for gaming because:
   • This is a small commercial centre;
   • The existing hotel provides some services/entertainment and the proposal will increase the range of services/entertainment available;
   • Gaming will be one component of the range of services/facilities offered;
   • The premises is not situated in close proximity to any sensitive uses; and
   • The premises is not located on an obvious "ant trail".
2. We have already explained some changes are necessary to the layout and access to the gaming room, which will be included in the permit conditions. We also note the applicant has reached agreements with some objectors about the inclusion of further permit conditions, including relocation of the Bay Street entry and measures to limit the use of the car park to staff and patrons. These are also included in the permit conditions.

1. Pursuant to section 3.3.7 of the Gambling Regulation Act 2003, the Commission, and upon review the Tribunal, must not grant an application for approval of premises as suitable for gaming unless (amongst others) the net economic and social impact of approval will not be detrimental to the wellbeing of the community of the municipal district in which the premises are located. The remaining preconditions were generally agreed between the parties and documented in the Commission's decision.
2. It must be remembered that the Commission has a particular expertise in the area of gaming and its role in administering the Gambling Regulation Act 2003 provides consistency of decision making in the exercise of discretion under the Act[12]. As such, we have given its reasoning and findings considerable weight[13].
3. The Council seeks a review of this approval on the basis that the Commission failed to properly define the community that would be affected; failed to properly determine the detrimental factors to the wellbeing of the community; gave inadequate weight to the detrimental impacts of a large electronic gaming machine venue on a prominent corner site in the local neighbourhood; and failed to consider the disproportionate scale of the proposed gaming use in the context of a range of facilities that should be provided in a hotel with gaming.

1. The Council submitted that the test is not the wellbeing of the municipality but rather the wellbeing of the relevant community within the municipal area and relied upon the Court of Appeal findings in Macedon Ranges Shire Council v Romsey Hotel Pty Ltd Anor[14] that social impact means the impact on the society or community or some part or parts of it in which the gaming machines are proposed to be located.
2. The Council's submission was that an assessment of the impact upon the community should be limited to that of Brighton. The Gambling Regulation Act makes it clear that prima facie the area of enquiry is the municipal district as a whole. On the facts before us, in our opinion there are no particular factors that would warrant a confinement of the area of enquiry from the municipal level when considering the wellbeing of the community. At the same time, we accept that it may be appropriate to focus more keenly on the projected primary catchment of the venue as part of this enquiry. If one was to look more locally, we agree with the evidence of Ms Peterson that it would include the suburbs of Brighton, Brighton East and Hampton as these suburbs fall within the 5 km radius that is likely to form the patronage of the proposed premises, being areas subject to the most direct impacts of the venue.

The detrimental factors to the wellbeing of the community

1. The Council highlighted a number of detrimental factors it considered relevant, including:
   • this is a large scale premises that will adversely undermine the character of this neighbourhood centre;
   • there is an oversupply of EGMs in Brighton such that the proposed approval would lead to a density of EGMs within that suburb that would be well above the state average;
   • it is proximate to schools and other sensitive uses;
   • it will have a negative impact on the Brighton residents' perceptions of their community;
   • it is likely to have an increase in gaming machine losses and problem gambling; and
   • it is likely to result in a divergence of expenditure from local businesses.

1. The Council described this proposal as a large scale premises, but we agree with Ms Peterson's evidence that 50 EGMs represents a medium sized gaming room. Indeed, we are of the opinion the size of the gaming facility is commensurate with the layout and scale of the venue and is not an overly intensive activity. Rather, the gaming activity is just one of the range of entertainment services and facilities that will be available at the hotel.

1. Ms Colmer accepted that density alone may be a relatively blunt instrument, albeit in her view it was the best measure of accessibility (convenience) and risk. We agree with Morris J (as he then was) in Kilsyth and Mountain District Basketball Association Inc. v Victorian Commission for Gambling Regulation[15] that the density of gaming machines is one factor that needs to be considered in the analysis mandated by the Act:

... it is unrealistic for municipalities to expect that the number of gaming machines in their municipality per 1,000 adults will be average or below average. It is almost inevitable that the average number of gaming machines per 1,000 adults in some municipalities will be greater than the metropolitan average; and in other municipalities less than the metropolitan average. I would have thought that from a social viewpoint municipalities have a robust population, and who are not comparatively disadvantaged, might be better placed to absorb a higher concentration of gaming machines than disadvantage areas. ...[16]

1. Having regard to the immediate Brighton area (as is sought by the Council) the EGM density following this approval would be 9.3 machines per 1,000 adults compared to the metropolitan average of 6.81 machines per 1,000 adults - an increase of 22%.
2. We agree with Ms Peterson's evidence that focusing on Brighton is too narrow an analysis. We also agree with her that the opening of a new venue has a greater accessibility impact upon the community (when compared to an application to increase the number of machines in a premises already offering gaming). However, as Brighton already has two gaming venues, there is already access with commensurate opportunities. Generally speaking, gaming venues are encouraged to be located in proximity to activity centres or, in this case, a neighbourhood centre and hence there is nothing unusual about its proposed location in this instance.
3. We note that Bayside has approximately 50% less EGMs per 1,000 adults than the metropolitan average and approximately 49% less EGMs per 1,000 adults than the Victorian average (as it currently contains six gaming venues). The approval of this application would increase the total number of EGMs to 285 (including the Marine Hotel increase already approved) which is less than the maximum number of machines permitted in Bayside of 726.[17] We note Ms Peterson's evidence that this proposal would increase the density of machines to 3.89 per 1,000 adults.
4. By late 2012, Milanos and Sandringham Hotel will reduce the number of machines by 17 (as a result of the recent auction) and so the total impact on the municipal district with this venue and the 10 new machines at the Marine Hotel will be an increase of 43 machines.

1. We have already dealt with this in the planning section of our reasons and reiterate that we are not persuaded this premises is inappropriate for the introduction of gaming having regard to the location of the surrounding schools and the lack of any evidence of obvious "ant trails".

The impact on residents' perceptions about their community

1. We adopt Ms Peterson's evidence that research shows 85% of Victorians see gaming as a problem and therefore some opposition amongst this community to gaming is consistent with the Victorian perception generally.
2. Whilst there is a risk of problem gambling, it must be remembered that gambling is also a recognised form of recreation and entertainment to the community generally. This is reflected in both the legislative scheme and also the recent findings of the Productivity Commission[18].
3. We are not persuaded the level of consultation undertaken by the Council as part of its development of the 2010 gaming policy is sufficient to substantiate the Council's concern about the negative impact upon the residents' perceptions of their community. In this regard, we refer back to our findings under the planning application about the limited aspects of the consultation process.
4. We note the Council did not rely upon the petition tendered at the Commission's hearing given Mr Kane explained the Council has some doubts about its legitimacy.

1. The Council accepted the evidence of Mr Clyne and Ms Lughermo without cross-examination. Hence we accept Ms Lughermo's financial model that a minimum of 50 EGMs is required to make this proposal, including the upgrading of the facility and the creation of new activities, sufficiently viable for this operator. We also accept Mr Clyne's summary that the level of transferred expenditure is between 60-80% (which is in the order confirmed by the Commission) with the predicted level of gaming expenditure at $270.00 per EGM per day in its first year of trade.
2. We are persuaded by Ms Peterson's evidence that the application will have a positive economic impact on the community because:
   • the increase in gaming expenditure is well below the Victorian and metropolitan averages and so will not have a detrimental impact on the community;
   • the likely household expenditure as a result of additional gaming machines will be consistent with the level spent on other nonessential or luxury items;
   • the primary catchment of patrons is an area that displays little sign of any social or economic disadvantage;
   • the proposal will create 16 additional EFT positions; and
   • it is likely that much of the gaming expenditure that is transferred from other venues to this venue will be from residents from the catchment area and from the wider area, hence more local spending will stay in the local area.

1. We acknowledge that there is a risk of problem gambling both within this municipality and generally across Victoria whenever additional EGMs are proposed to be introduced in an area. However none of the factors prevalent for problem gambling are evident in the patron profile as identified by Ms Peterson:
   • Very high SEIFA index scores;
   • Significantly higher than average weekly household income, with a much lower number of low income earners;
   • Significantly higher disposable income;
   • A well educated community;
   • A low level of single parent families;
   • Low levels of renting, particularly in social housing;
   • High level of home ownership;
   • High JSS[19] ranking;
   • Low unemployment; and
   • Excellent ability to raise emergency funds.
2. In combination with existing access and the overall density of machines, we do not regard this as a factor sufficient to counterbalance the other positive aspects of the approval.
3. The operator of this gaming venue has made a commitment to provide community donations on a yearly basis in the order of $50,000 to be distributed to local community groups by an appropriate fund.
4. Ms Peterson has suggested that a Gaming Management Policy should be prepared prior to the commencement of the operation of the gaming machines as a condition of the planning permit. She also pointed out that the proposal increases employment opportunities and provides a mix of hotel activities.
5. Importantly, the gaming operator is happy to limit the start of the gaming room to 11.00am and to close the premises at 1.00 am on weekdays and Saturdays and 11.30pm on Sundays, reflecting the hours of approval under the liquor licence for the premises. Ms Peterson pointed out that this would create a break in the opportunity to undertake gaming at this premises of at least 10 hours, which is well in excess of the recommended break of at least 4 hours.
6. We are persuaded by Ms Peterson's evidence that:
   • the proposal will result in a positive social impact on the local community as gaming is a legitimate recreational and entertainment activity;
   • donations and contributions will be made to the local community through a Community Fund;
   • the risk of a potential increase in problem gambling is limited in part by the lack of any signs of any significant social or economic disadvantage in the area of the likely patron catchment;
   • a venue specific Responsible Gaming Manual will be put in place to ensure the venue is appropriately equipped to deal with problem gambling; and
   • whilst there is a general feeling across Victoria of concern about gaming, there is no evidence that this venue will have a negative impact on that community.
7. Hence, we agree with the findings of the Commission that the issues of detriment raised by the Council do not outweigh the benefits raised by the applicant.
8. Our conclusion, therefore, is that there will be no net economic or social detriment to the wellbeing of the community of the municipal district in which the premises is located.

1. Having regard to the submissions of the parties, we find that it is appropriate to require some changes to the building in order to minimise the direct relationship between the gaming room and New Street, as well as providing some separation between the gaming room and the smoking area. We will impose the hours of operation of the gaming room suggested by the permit applicant. Both of these conditions will attach to the planning approval.
2. The Council suggested in its draft permit conditions that a section 173 agreement be required to effectively lock in the Community Contribution Fund of $50,000.00 per year. Mr Kane explained the idea for imposing this condition came from the Beretta[20] decision where the applicant agreed to a similar condition. We would have concerns with such a condition on a planning permit since clause 52.28 focuses upon the appropriateness of the location of the gaming machines rather than specifically the social and economic impacts of the machines themselves.
3. The parties generally acknowledged that such a requirement may be better dealt with through the gaming approval as the Gambling Regulation Act 2003 provides the opportunity for the Commission to impose any condition its sees fit.[21] There was general agreement, including from Ms Hooper on behalf of the Commission, that such condition could be imposed as part of the gaming approval or potentially as a condition of the venue operator's licence.
4. However, Ms Porritt pointed out that Bell J by way of obiter dictum in the Romsey[22] decision (since that application was ultimately refused) found that the Commission did not have the power to impose a condition with respect to making community donations as part of the approval of the premises as suitable for gaming. He stated:

... Supporting community organisations through donations from gaming machine income is not part of the commission's (or the tribunal's) function. That is the function of the Community Benefit Fund. This subject is not closely connected with the premises or directly associated with them. Moreover, a condition of this kind may be difficult to define and enforce, place the commission in the position of being seen to mandate donations of a particular kind to particular groups and have unforeseen consequences.[23]

1. We have given due weight to Justice Bell's findings that a condition requiring community contributions would not be appropriate under the gambling legislation. We have also had regard to the taxes and levies upon EGM operators as part of this legislation which includes 8.33% of revenue from gaming machines in hotels being paid into the State Government's Community Support Fund which is focused on projects that benefit communities and measures to minimise problem gambling and resultant harm. This level of contribution has apparently been confirmed as being required following the 2012 changes to the industry. It is also not practical to expect this requirement to be included as a varied condition of the venue operator's licence, given the timing of this approval and the procedures required.
2. At the same time we record that, like the Commission, we have given express consideration to this community contribution as a positive aspect of the application, particularly since it is directed towards local benefit. In this context, we note the undertaking that the venue operator has given to make an annual minimum $50,000 contribution to local community and sporting groups through a Community Fund to be established, to include representatives of the local community and the Council.

1. The decision of the Responsible Authority is set aside and a planning permit is granted subject to conditions.
2. The decision of the Commission is varied.

Use and installation of 50 electronic gaming machines and building and works to an existing hotel in accordance with the endorsed plans.

The permit must contain the following conditions:

1. Before the use and development starts three copies of revised plans drawn to scale and dimensioned must be submitted to and approved by the Responsible Authority; when approved the plans will be endorsed and will then form part of the permit. The plans must be generally in accordance with the Application Plans but modified to show to the satisfaction of the Responsible Authority:

1. The new entry to the Hotel in the Bay Street façade, including the internal air lock, must be relocated to the corner of Bay Street and New Street generally in the location of the existing northeast window. 2. Windows to Bay Street designed in such a manner that precludes them from being used as access.

1. Children's games area located in the north western corner of the bistro.

1. Modify the café internal north-south wall to be east-west to reduce the gaming area. 2. Removal of the entry door to the gaming room from the smoking area along New Street and replacement with a wall. 3. Works identified in condition 7.
2. The use and development as shown on the endorsed plans must not be altered without the written consent of the Responsible Authority.
3. No more than 50 gaming machines are permitted to be installed or used in the gaming area.
4. The use of the gaming room is only permitted during the following hours:

Sunday (being Christmas Eve or Day; New Year's Eve or Day)

Between 11.00am and 1.00am the following morning except for the morning of Good Friday.

1. Before the use commences, a Patron Management Plan is to be submitted to the satisfaction of the Responsible Authority. When approved, the plan will be endorsed and will then form part of the permit. All activities forming part of the uses on the subject land must comply with the endorsed plan. The plan must include:

1. Measures designed to ensure the orderly arrival and departure of patrons; 2. Signage to be used to encourage responsible off-site patron behaviour;

1. The training of staff in the management of patron behaviour;

1. Staff communication arrangements; 2. Compliance with the Liquor Control Reform Act 1998, including confirmation that all persons engaged in the serving of liquor must undertake Responsible Service of Alcohol Training provided by or approved by Liquor Licensing Victoria within 2 months of employment; 3. The keeping of a complaints register and procedure for dealing with complaints;

g Confirmation that all persons engaged for employment in the gaming lounge must undertake Responsible Service of Gaming training by or approved by the Victorian Commission for Gambling Regulation; and

1. The contact details of an appropriate person for residents to contact in the event of a complaint arising with respect to the operation of the premises.

The Plan, including the matters specified herein, may be amended to the satisfaction of the Responsible Authority (including being circulated to all nearby residents to the satisfaction of the Responsible Authority).

1. Before the use commences, a Responsible Gaming Manual must be submitted to the satisfaction of the Responsible Authority. When approved, the manual will be endorsed and will then form part of the permit. The manual is to assist staff in undertaking responsible gaming practices at the premises including:

1. Confirmation that all persons engaged for employment in the gaming lounge must undertake Responsible Service for Gaming training by or approved by the Victorian Commission for Gambling Regulation. 2. Procedures to foster and maintaining linkages between the Hotel operator and Bayside City Council, regional Gambler's Help services, community groups and organisations and industry stakeholders regarding responsible gambling/customer care practices and initiatives;

1. Monitoring to ensure the Hotel's compliance with its Responsible Gambling Policies and Procedures, its Responsible Gambling Code of Conduct and Self-exclusion Program, the Victorian Gambling Regulation Act 2003 and its associated regulations, and requirements as set by the Victorian Commission for Gambling Regulation ("the Commission");

1. Developing staff resource documentation to support the Hotel's Responsible Gambling Policy and Procedures Manual and to provide training for the Hotel's staff in responsible gambling/customer care practices; 2. Work with regional Gambler's Help services to identify and trial additional responsible gambling/customer care initiatives aiming at continuous improvement and "best practice"; and 3. A requirement that the policy be reviewed prior to or as soon as practicable after the introduction of any significant regulatory changes affecting the operation of gaming machines including (if necessary) prior to the changes associated with the implementation of the gaming auction commencing 2012.
2. Before the use commences, the hotel car park must:

a Be signed to identify that it is to be used by hotel patrons only;

b Be secured by fencing, with gates at the entry and exit points;

c Have a ticket machine installed at the entry point; and

1. Employ a "token" parking system whereby customers of the hotel can exchange their tickets for a token which provides car park exit;

1. External lighting must be designed, baffled and located so as to prevent any adverse effect on surrounding land to the satisfaction of the Responsible Authority.
2. Signage must be displayed near all entrances/exists requesting patrons to leave the premises in a quiet and orderly manner so as not to disturb nearby residents to the satisfaction of the Responsible Authority.
3. This permit will expire if the installation of the new electronic gaming machines is not completed within four (4) years of the date of the permit.

The Responsible Authority may extend the periods referred to if a request is made in writing before the permit expires, or within three months afterwards.

[1] Except if the Sunday falls on Christmas Eve, Christmas Day, New Years Eve or New Years Day when the hours are 10.00am to 1.00am the following morning.

[2] We consider that this question involves a mixed question of fact and law, relating to the construction of a term within the planning scheme and its application to the proposal. For the avoidance of doubt, this part of our reasons is determined by Member Cook, a legal practitioner, notwithstanding any language to the contrary.

[3] Or alternatively, if the particular strip shopping centre is specified in the schedule, which is not the case here. We also note that other specified exemptions in this clause do not apply to the facts before us.

[4] We do not consider that Pantone fashion forecasters is a shop in that its real and substantial purpose is as an office/consultancy. Even if this view is overly rigid, it would not influence our overall assessment that the proportion of shops within the centre is minor.

[5] Referring to the Tribunal's finding in M & S Whelan Investments Pty Ltd v Alpine SC [2008] VCAT 291, a decision of Member Rickards (as she was then).

[6] [2008] VCAT 1428.

[7] Of the 15 focus group attendees, only two gaming venues were represented (one attendee was from the Hampton Bowls club and three attendees were from the Beaumaris RSL).

[8] As opposed to 18 written submissions with address details and their interest clearly defined.

[9] [2009] VCAT 167.

[10] [2010] VCAT 505.

[11] We are persuaded by Ms Peterson's evidence that the existing studies, surveys and literature regarding underage gambling have been criticised and, for example, Gambling Research Australia in "A Review of Australian Gambling Research" (2008) states on page 63 that it would be necessary to conduct inter-jurisdictional research at the same point in time and include both regional and metropolitan schools as well as all years 8-12 students excluding 18 year olds to ensure that this area of research had a genuine underage sample.

[12] A view expressed by Morris J in Branbeau PL v Victorian Commission of Gambling Regulation [2005] VCAT 2606.

[13] A view expressed by the Court of Appeal in Macedon Ranges Shire Council v Romsey Hotel Pty Ltd & Anor.

[14] [2008] VSCA 45.

[15] [2007] VCAT 2.

[17] As required by the order of the Minister for Gaming order on 19 June 2009 regarding the maximum permissible number of gaming machines for each municipal district in Victoria.

[18] For example, refer to the Overview of the Productivity Commission Report (23 June 2010).

[19] Jesuit Social Services - Jesuit Social Services and Catholic Social Services release reports on social disadvantage using 26 variables. The latest report is February 2007.

[20] [2009] VCAT 74.

[22] [2009] VCAT 2275.