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[2013] VCAT 26
Victorian Civil and Administrative Tribunal
2013-01-11
Original judgment source is linked above.
In Council's submissions [the] proposal offers little real benefit to the community of Whittlesea. Council recognises that additional community funding, if distributed appropriately, would be beneficial to the community. Similarly, if major renovation works were undertaken at the subject premises, this could be appreciated by the community. If employment at the Club were to increase, that would be a benefit to the community (provided it is employment related to the gaming machines). However it is strongly submitted that these potential benefits are strongly outweighed by the likely and foreseeable harm to be suffered by the community, in the likely increase in problem gambling flowing from the increase in EGMs.
The tribunal must have regard to the vulnerability of the Whittlesea community to suffer increased problem gambling among its residents, Given the findings by the productivity Commission that on average, 40% of gaming expenditure is derived from the 2-3% of adults who are problem gamblers or at risk of problem gambling, there is a high risk that a significant portion of the additional expenditure derived from 10 extra EGMs at the subject premises, will come from problem gamblers. This unacceptable risk is undoubtedly a disbenefit of the proposal.
"$2.8 million was lost to Pokies (or Electronic Gaming Machines) in 2011/12 at the Bowls Club.
$102 million was lost to Pokies (or Electronic Gaming Machines in the 2011/12 financial year in the City of Whittlesea ALONE"
Council's key concerns with the proposal are: that the proposal includes no immediate social benefit to the community; that the risk to a vulnerable community of an increase in problem gambling posed by the increase by 10 of the number of EGMs at the venue outweighs the social benefits that might accrue from the proposal; and that the proposed increase to the number of EGMs within the municipality would increase gaming expenditure for a municipality where expenditure is historically among the highest in Victoria.
Mr Geoffrey Aldous, in his fifth year as chairman of the club;
Mr David Baldi, general manager of Mercury Group Victoria;
Ms Jacqueline Hutchison, compliance officer of the Mercury Group;
The Club supports other not-for-profit organisations with in-kind and cash contributions. In 2012 the Club's cash donations and sponsorships amounted to about $22,000.00 With the increased gaming income from the new state gaming tax system and the extra gaming machines, the Club will make a specific allocation of 15% of its surplus to community contribution while it is repaying loans and entitlements and thereafter rising to 30%. On the current forecasts this amounts to approximately $70,000 per annum in the first 5 years and then $150,000 thereafter.
It is estimated that the increase of 10 EGMs at the Club's Venue will increase the Club's NGR [net gaming revenue] from between $163,284 and $284,879 and that 50% will be transferred from other venues in the LGA. These figures could also be lower after removal of the ATM in July 2012 and the effect on the Club's revenue is assessed. The expected increased competition in the LGA and particularly the Bridge Inn will affect the Club's revenue as other venues replace old product and introduce new product.
The provision of gaming will facilitate the continued development of the Whittlesea Bowls Club, providing the growing community with access to enhanced social opportunities and facilities, while generating increased employment opportunities.
This application will enable the Club to reduce debt to be in a better position to increase financial benefits to the local community, including developing a more formal charitable donation structure to local groups. With additional machines, the intention is to increase contributions in the short term to 15% of surplus income after loans. This is expected to amount to $70,000 - $100,000, increasing significantly over the next 4-5 years once debts have been repaid.
There is expected to be a negligible transfer of gaming expenditure from firstly other gaming venues which are concentrated a significant distance away in the south of the municipality, and secondly will have virtually no impact on other businesses in Whittlesea. In fact, there is potential for additional economic activity to be retained in Whittlesea to the benefit of local businesses.
The impact of problem gambling is expected to be negligible also, influenced by -
96. The Club has now accepted as a reasonable mid-point of the two experts agreed during the VCGLR hearing which was that Net Gaming revenue at the venue is expected to increase by $319,000 in 2012-13 as a result of the 10 additional EGMs. However, 50% of this additional revenue is expected to be transferred from existing gaming venues in the municipality. Gaming expenditure in the City of Whittlesea is therefore expected to increase by just 0.16% of the 2011/12 gaming expenditure for the municipality as a result of this application. Following 2012-13, the venue expects its gaming revenue to decrease due to the impact of the Bridge Inn. The venue hopes to maintain its revenue position in the face of increasing competition with the opening of the Bridge Inn gaming facilities. Without the additional machines, the Club's financial position will undoubtedly be inferior.
The risk of an increase in problem gambling is the major negative social consequence of gaming that needs to be weighed up against the positives of this application. However, I consider the risk of an increase in problem gambling as a direct result of this application to be minimal. This assessment is based on consideration of the risk factors for problem gambling in relation to this application, and is evaluated in the context of a small incremental increase of EGMs in an existing venue.
44 I now return to the question of the meaning of the test .... 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.
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.
[The Act] does not specify the matters which the decision-maker must consider in deciding whether this 'no net detriment' test is satisfied. (There is an express requirement to consider any submission made by the responsible authority concerning the economic and social impact of the proposal [3.3.7(3)], but this takes the matter no further). The identification of the matters which the decision-maker is bound to consider is, accordingly, a matter of implication from the subject matter, scope and purpose of the Act.
In the present case the statutory signposts are provided by the test itself. The decision maker must consider:
'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. The 'well-being' of a community is to be measured (at least) by the extent to which the community is healthy, happy, contented and/or prosperous.
Whilst there is much to be said for a precautionary approach in these gaming matters, the true precautionary approach would be to continue the ban which existed in Victoria until just over 20 years ago upon electronic gaming machines and their predecessors, the mechanical poker machines. Cynics at the time suggested that the exclusion of these machines from Victoria was dictated in the decision-making of some governments, not so much by the desire to protect the community from problem gambling, but rather to entrench the share of the gambling dollar available to, for instance, thoroughbred horse racing...Whatever the virtues of this approach may be, the State has turned aside from it two decades ago. The legislation to which reference has been made requires a balancing of factors. I agree with [counsel] that, in coming to grips with the issue of problem gambling, decision-makers are doing no more than 'stabbing in the dark'. This only goes to show how difficult it is to come by reliable data on these difficult issues. The element of 'stabbing in the dark' is further emphasised by the difficulty in comparing putative benefits and disbenefits against one another. How does one value for instance, the damage to the lives of some problem gamblers as against a community contribution of say $50,000 or the benefit to the local economy of a major renovation. Problem gambling is a phenomenon that cannot be accurately measured and even if it could, its consequences are impalpable and difficult to subject to a purely economic analysis.
The community using the Whittlesea Bowls Club is vulnerable to problem gambling, particularly in the context of ongoing trauma following the 2009 bushfires and a relatively low resilience to economic downturn. Unemployment in the City of Whittlesea and in the Whittlesea Bowls Club catchment area is currently increasing at a significantly faster rate than the metropolitan average. There is significantly more community opposition than support for an increase in the number of EGMs at the Club.
Research by the Justice Department suggests 12,000 Victorians contemplate suicide each year and 6,000 contemplate breaking the law because of the problems caused by playing the poker machines.
The identified impacts and costs of problem gambling are multi-dimensional and numerous including higher rates of depression and alcohol consumption, financial stress, financial hardship amongst family members, relationship stress and breakdown, child abuse and neglect, disruption to work, reduction in work performance and potential bankruptcy. The financial losses for Whittlesea in the 2011/12 financial year are estimated at $102,300,000.
City of Whittlesea
Victorian Commission for Gambling and Liquor Regulation