Melbourne CC v Kingfish Victoria Pty Ltd & Anor [2013] VCAT 1130 | Case summary

Melbourne CC v Kingfish Victoria Pty Ltd & Anor [2013] VCAT 1130 | Case summary | Zoe

[45]

The Exchange Hotel has operated for more than two decades in the ground floor of a period building at 120 King Street in Melbourne's central city. Under new ownership since 2011, it is proposed to create a new gaming room at the very rear of the interior of the hotel, featuring 54 electronic gaming machines (EGMs). The broader aspects of the proposal are significant refurbishment of the hotel interior; expanding the 'use' approval for the hotel at ground level; and waiving the loading and unloading requirements and bicycle parking facilities.
Gaming approval is required for the proposed 54 EGMs under the Gambling Regulation Act 2003. While this was opposed by Melbourne City Council (MCC), gaming approval has been granted by the Victorian Commission for Gambling and Liquor Regulation (Commission). Planning permission is also required under the Melbourne Planning Scheme and related legislation, with MCC as the Responsible Authority issuing a Notice of Refusal to Grant a Permit.
MCC seeks a review of the Commission's gaming approval and Kingfish Victoria Pty Ltd (the Applicant) seeks a review of MCC's refusal to grant a planning permit. Each of these review applications were heard together in a combined hearing over nine days in December 2012 and May 2013. We heard submissions from the three parties and received numerous witnesses' evidence. After the hearing, we carried out an unaccompanied inspection of the hotel and the surrounding area including an external inspection of Ebsworth House and its entrances. We also inspected the two closest existing gaming venues in this western CBD area[2].
To provide an overview of the content of the reasons for our decision, the first sections (Parts B and C) provide information about the hotel and locality (notably the adjacent Ebsworth House social housing facility), the nature of these proceedings, how this hearing unfolded, details of the proposal and of Ebsworth House, and each party's case. Our reasons then explain:
- What weight we have given to the Commission's decision (Part D).
- The distinct and separate requirements, and different assessment processes of the gaming and planning applications (Part E).
Part F deals with the gaming application, which requires consideration of whether the likely net social and economic impacts of the gaming proposal would cause any net detriment to the wellbeing of this community. Some of this information is presented in table form. We conclude at the end of Part F that gaming approval should be granted.
Part G deals with our assessment of the planning merits of the proposal, which involves a locational assessment of whether it would be an acceptable planning outcome. We ultimately find the proximity of the hotel to the adjacent Ebsworth House social housing facility run by Wintringham is not an acceptable location for EGMs.
In Part H we make some concluding comments about these proceedings.

[48]

We understand the current tenant Kingfish Victoria Pty Ltd purchased the Exchange Hotel facility in March 2011. It is in a four storey period building, being the former Melbourne Wool exchange, on the north-east corner of the intersection of King and Little Collins Streets in the western end of the central city. This western area of the CBD includes a mixture of commercial, retail, legal, office and residential uses, including the existing social housing facility in the Ebsworth House building located on the other side of the laneway (i.e. Gallagher Place) to the east of the review site.
There was little disagreement regarding 'who is the community' for the gaming assessment, and also regarding 'the unique features of Melbourne CBD'. We consider the position of the parties at the hearing to be fairly consistent with the comments of the Tribunal on these two issues in the Francis Hotel decision[3]. To avoid duplication, suffice to say we are conscious that the Melbourne CBD has a 24/7 character and a strong emphasis on tourism and entertainment. In Victoria, the CBD alone has no cap on EGMs, no restrictions on EGMs in retail areas and features Crown Casino, which includes 2,500 EGMs. The CBD also provides a mix of land uses and activities 'shoulder-to-shoulder', sometimes involving quite different land uses.
With respect to 'who is the community', the key point here is that a very distinctive feature of the CBD is that most of the people using it are not residents but workers, students or visitors. It is self-evident that universities feature strongly in this municipality and that the CBD has over time retained its dominant role as a focus for employment in greater Melbourne (with huge numbers of office/retail workers commuting into the central city Monday-Fridays). Visitors to Melbourne include Melburnians from the suburbs visiting for an event or an appointment, as well as regional, interstate and overseas visitors. King Street has an entertainment strip that also attracts visitors, particularly in the evenings and early hours of the morning. Consistent with the Francis Hotel decision, the 'community' here is not merely local residents, but also workers, students and visitors to the central city.

[49]

These combined proceedings were scheduled for a five day hearing over 10-14 December 2012. We made procedural orders during the course of the hearing[4]. All parties made opening presentations, Council called all of its witnesses, and the Applicant called six witnesses. As it became evident there would be insufficient time to complete the combined proceedings and to allow the parties the opportunity to review other relevant gaming decisions being handed down by the Tribunal[5], on the fifth hearing day by consent we allowed an adjournment. We then made various procedural orders dated 19 December 2012. These orders facilitated the parties providing any supplementary evidence and allocated four more hearing days, commencing 12 March 2013.
Over the intervening period the Applicant sought further gaming expenditure data from the Commission. When the Commission indicated it would not provide all of the information sought, the Applicant requested a Directions hearing before the Tribunal to obtain an order directing the Commission to provide all of the information. The Tribunal issued further interim orders dated 13 February 2013 providing that the four day hearing commencing on 12 March 2013 be vacated, but with the first day converted into a one day Directions hearing before a presidential member.
Deputy President Dwyer conducted this Directions hearing and declined to make the 'further disclosure of data' order sought by the Applicant. The four day hearing was rescheduled for 6-9 May 2013, and DP Dwyer provided his written reasons on 28 March 2013[6].
The hearing then resumed and was completed on 6-9 May 2013. The Applicant called the balance of its sworn witnesses. The Tribunal had received a written gaming expenditure report on behalf of the Applicant from Mr Clyne, but he was not called to give oral evidence at the hearing.
Although we had allowed one of the Wintringham residents Ms Newman (represented in practice by a housing support person in the form of Ms Reeve) to make submissions to us as an 'interested person' in relation to the planning proceeding during the initial hearing days, neither Ms Newman nor Ms Reeve attended the 6-9 May 2013 hearing days.

[50]

The Commission took a relatively neutral role during the hearing.
Council accepted there are different circumstances here compared to those before the Tribunal in the recent decision of Francis Hotel Pty Ltd v Melbourne City Council[7], which was also a CBD hotel case. For example, Council did not pursue issues of 'clustering of gaming venues' or this proposal inappropriately allowing the EGMs to be visible or immediately accessible from the public realm. Council also indicated that it did not see the gaming expenditure as central to this case. Rather, Council's submission focused on whether the particular location of the proposed gaming facility was compatible with its immediate surroundings, particularly Ebsworth House. Whilst there was some passing reference to the nearby Stella Maris seafarer's facility and the Eltham College city campus, we note:
- Council's expert planning witness Mr Milner did not see any significant compatibility issues with either of these neighbouring uses. Rather, he saw the critical interface issue was with Ebsworth House. Council similarly relied on the sworn evidence of Ms Rice and Ms Hartnett regarding 10 of the 24 Wintringham residents being more specifically vulnerable to problem gambling. Similar concerns were expressed by Ms Reeve.
- It was confirmed during the May 2013 hearing days that the nearby campus of Eltham College had closed.
On this basis, while there was still considerable discussion of the 'no net detriment' test under the gaming legislation, the Council's case appeared to focus on what it sees as the fatal locational problems arising from the close proximity of the intended gaming venue to Ebsworth House in the context of the requirements of Clause 52.28 of the Planning Scheme. The Council's opening submissions flagged that:
- It saw compatibility problems with Ebsworth House as the stand out issue, which Council submitted had not been addressed in the hearing before the Commission; and
- It did not particularly take issue with the Applicant's expert planning evidence prepared by Ms Peterson other than for the role and impact upon Ebsworth House.
The Applicant put to us that the proposal would have a strong range of positive social and economic impacts; there would be a very professional level of management of the venue; and the intended location of the gaming room at the very back of a full-service hotel was favourable. While acknowledging issues of 'problem gaming' per se, the Applicant submitted they would be minimised here through 'responsible gaming' and 'harm minimisation' management practices. The vibrant 24/7 nature of the CBD was emphasised, as was the proximity of Crown Casino and two other existing venues in the western end of the CBD[8]. The lack of a cap on EGMs, no restriction on EGMs in retail areas, and the number of CBD of gaming venues including Crown casino were also highlighted.
With respect to the compatibility issues arising from the proximity of Ebsworth House to the Exchange Hotel, the Applicant relied on its various witnesses and the CBD location in arguing that the review site is an acceptable location for the EGMs and would cause no net detriment. It was submitted a strong feature of the CBD is that very different uses can exist 'cheek by jowl', noting that there are already other gaming venues within walking distance of Ebsworth House.
Given the concerns about Ebsworth House, Mr Smith (as the publican of the hotel) gave evidence that:
- he or his staff can recognise a number of the Ebsworth House residents; and
- any recognised Ebsworth House resident entering the hotel off Little Collins Street, would be immediately advised that their patronage was declined and the resident would be asked to immediately leave the premises.

[52]

Kingfish Victoria Pty Ltd already operates two other gaming venues at Racecourse Hotel in East Malvern and the Golden Fleece Hotel in South Melbourne. With respect to the Exchange Hotel, the Applicant is a tenant of the building and the hotel operator. The hotel offers a 100 seat bistro food area, bar area, a TAB facility and restaurant/function areas at the rear. There is also some live music offerings, typically on a Friday or Saturday night and sometimes involving crowds of between 300-700 persons. Rear parts of the hotel are currently used as "back of house" and "store" and are seen by the Applicant as under-utilised. The Applicant advised the typical clientele are white collar city workers between 20 and 40 years of age. Extra business can arise from major events nearby, such as a football match at Ethiad Stadium. Customers who wish to smoke currently do so in the alcove area facing Little Collins Street, and this arrangement will remain as part of this proposal.
The hotel has a late night (general) liquor licence that allows up to 995 patrons and trading hours for consumption on the premises that include 7am to 4am the following day, Monday to Saturday (except Anzac Day morning) and 7am to 1am the following morning Sunday. Mr Smith's witness statement includes the 'red line' plan that indicates this liquor licence applies to the whole of the premises (hotel, restaurant/bar and rear office/storage).
This proposal for 54 EGMs forms part of a larger program of internal works and various changes to the management framework for the Exchange Hotel. The evidence of Mr Smith near the end of the hearing was that, in addition to the new gaming room at the rear of the hotel[9] operating until 1.00 am, the 'hotel' area of the ground floor would be expanded and overall $950,000[10] worth of internal refurbishment would occur. Of this figure, he indicated that about 16% would be spent on the gaming room itself. The balance of the refurbishment would create a new upmarket 'sports bar' area and improve the hotel's ability to cater for multiple functions. We were provided with some artists impressions of how the upgraded interiors are intended to look.
In relation to the proposed gaming room at the rear, the Applicant intends that there will always be two staff monitoring the gaming area. No 'free drinks' would be provided, although a 'loyalty system' would probably operate. The Applicant throughout the hearing reiterated that there would be a strong commitment to 'responsible gaming' and 'harm minimisation' by the hotel management. The Applicant has prepared a Code of Conduct (which is a standard document and requirement) together with a more tailored Responsible Gaming Policy. The intended Gaming Manager is Mr Lanning, who has nine years of previous experience in this role and currently works at the Olympic Hotel in Preston. Mr Lanning confirmed that the operation of the gaming room would include using an innovative "QR Code' system, where a form of bar code on each EGM can be scanned with a smart phone app to provide information including support services available and who the staff at the venue are.
Mr Smith confirmed that the upgraded hotel would continue to cater to more upmarket patrons (mostly city workers) and a full range of services, i.e. not only gaming but functions, meals, bar areas, a TAB facility and some functions/live music. This proposal also offers some changes to the operation of the hotel which Mr Smith confirmed were:
- A new requirement that any live music in the hotel cease at 3 am rather than 4.00 am.
- The anticipated employment of 10 EFT staff (8 associated with the gaming room).
- A reduction in the overall number of patrons in the hotel from 995 to 895.
- Improved lighting, CCTV and signage in the Gallagher Place laneway area between the hotel and Ebsworth House, together with greater security personnel after 8 pm on Thursday and Sunday evenings[11].

[53]

Ebsworth House is a four storey building with the three upper storeys containing 24 single occupancy residential apartments. These apartments have two entrances[12] but the residents primarily use the Gallaghers Place entrance as it has access to a lift. Ebsworth House is owned by Housing Choices Australia (HCA), a social housing developer and provider; and it is managed by Wintringham Specialist Aged Care Services (Wintringham). HCA are the landlords, maintain the building and enter into rental agreements with the tenants. Wintringham provides the support services and (as part of a protocol with HCA) select the tenants for the building. Residents pay rent to HCA but the Wintringham support services are provided at no charge to them through government funding[13].
There was general agreement in the hearing that Wintringham operate the only two specialist social housing facilities for disadvantaged elderly people in the CBD, being Ebsworth House and a similar facility in Guildford Lane. Other central city social housing facilities discussed at the hearing were Drill Hall and Elizabeth Street Common Ground[14]. We understand that these two facilities cater for a range of disadvantaged residents of varying ages, as opposed to specifically catering for the elderly.
During the December 2012 hearing days, we were advised Ebsworth House residents have an average age of 67-68 years; the oldest current resident is 86 years old; and one third of the residents are older women. Ms Rice described the residents in her witness statement as typically vulnerable, poor, aged and previously homeless with a complexity of needs. Ms Rice and Ms Hartnett gave similar evidence that Ebsworth House residents are a relatively stable group with about 2 evictions in the last 11 years and about 4 vacancies in the last 12 months as a result of death or requiring a higher level of residential care.
Ms Rice and Ms Hartnett both expressed concern the proposed EGMs will have a detrimental social and economic impact upon the wellbeing of their residents. During the first hearing days Ms Reeve advised us seven residents have gambling problems, of which six are specifically EGM related. She also advised that there are at least another 4 residents who are seen as being at-risk in terms of exposure to EGMs. However, it was common ground at the hearing that the residents generally do not visit the Exchange Hotel now, noting that it currently includes a TAB facility.

[55]

Previous Tribunal decisions and the Court of Appeal have found that the decision of the Commission (the VCGLR and its predecessor, the VCGR) should be given weight as an expert decision.
With the case before us, we understood the Commission's own position over most of the duration of the hearing to be that:
- the earlier Commission hearing involved no consideration of the adjacent Ebsworth House as its existence was not known to the Commission and Ms Rice, Ms Hartnett and Ms Newman were not involved in that hearing; and
- the Tribunal hearing involved different submissions and witness evidence about the implications of the proposed EGMs, including being located next to Ebsworth House.
By way of example of the Commissions' position, during the final hearing days there was a discussion of the order in which the Applicant's witnesses would be cross-examined by Council and the Commission. As part of this discussion, Mr Hooper for the Commission emphasised the different nature of the issues before the Tribunal and indicated that the Commission was taking a 'neutral' approach to the Tribunal hearing.
Given this, we were rather surprised that as part of his closing submissions, Mr Hooper took a somewhat different tack. At this point, Mr Hooper queried whether the differences between the Commission and the Tribunal hearings were that significant, and (following this approach) whether it might be appropriate for us to give a higher level of weight to the Commission's decision.
We are not persuaded by the Commission's last minute questioning about how we should deal with this issue. We agree with some of the observations set out in the Francis Hotel[15] decision about the weight to be given to the Commission's decision, namely:
- Each case will turn on its own facts;
- Often proposals have evolved since the Commission's decision and different submissions and material per se will be presented to the Tribunal; and
- A Tribunal hearing is not just a review of the previous process but a de novo hearing, i.e. reviewing the merits of a proposal afresh.
In this case, it is clear the Commission's decision considered the then Eltham College and also the Stella Maris seafarer's facility, but not Ebsworth House. In addition, we are satisfied that there has been a significant shift in the focus of the debate between the two hearings. We received considerable submissions and witness evidence that was not presented to the Commission. At the Tribunal hearing, concerns regarding the seafarers' facility and Eltham College fell away and, by the end of the hearing, the key issue arising before us was the relationship between the proposed EGMs in the hotel and Ebsworth House residents. Given these circumstances, we have given the Commission's decision 'due weight' as relevant to the issues before us for consideration.

[57]

It is important to recognise that while there are some overlapping aspects to the planning and gaming considerations, the two proceedings before us have distinct assessment and approval requirements.
Section 3.3.7 of the Gaming Regulation Act 2003 provides that the VCGLR (and upon review, the Tribunal) cannot grant approval for the use of premises for gaming unless, in particular, the net economic and social impact of such approval will not be detrimental to the well-being of the community of the municipality in question[16]. A simpler way to describe this is that, in essence, a gaming proposal must at least result in a 'break even' situation in relation to the net social and economic impacts of its approval on its municipal community, assessed on a composite basis. The Commission has supported the proposal because it has concluded this 'no net detriment' test is satisfied with the proposed 54 EGMs at this location.
In relation to planning approval, Knox City Council v Tulcany Pty Ltd[17] is authority that the key requirement is whether or not the proposal would be an 'acceptable' outcome. The Planning Scheme encourages consideration as to whether a proposal achieves 'net community benefit' and 'sustainable development'. For the removal of any doubt, Prizac Investments Pty Ltd v Maribyrnong CC & Ors[18] is authority that 'net community benefit' is not a specific test, but rather a policy consideration.
Turning now to the different assessment requirements, the gaming approval has more of a 'big picture' focus on the implications of a proposal for the wellbeing of the community of the municipality in question. The gaming legislation expressly requires the decision maker to consider the likely social and economic impacts of a proposal on the relevant community; hence the gaming assessment tends to involve more high-level comparisons between sometimes competing considerations. For example, compared to the planning approval, the gaming approval alone involves:
- considering the implications of the proposal over a much wider physical area. For example, a less than ideal particular location for new EGMs might still be favourable, if the new EGMs are seen as at least achieving a break-even outcome across the broader municipality. However some common sense still needs to be applied and previous gaming decisions[19] have found that for municipalities with more diverse socio-economic characteristics, it is appropriate in the gaming assessment to take carry out a more focused analysis on the applicable area of the municipality, rather than literally benchmarking the proposal against the whole of the municipality;
- a more overt ability to trade-off likely positive impacts of the proposal against likely negative ones; and
- more emphasis (in practice) on considering how much weight to give to the competing factors in the assessment process.
By contrast, the planning review process is more specific because it is primarily a spatial assessment exercise based upon the location of the proposed EGMs. While Clause 52.28 of the Planning Scheme still requires consideration of the social and economic impacts of the proposal, there is a narrower spotlight shone on whether the social and economic impacts of the particular location would be an acceptable planning outcome.

[83]

Mr Whitehouse then prepared an Addendum document providing 'Additional information submitted during and following the VCGLR hearing', which revised the likely annual gaming expenditure to be in a range of $4,821,810 to $5,089,688, with an expected transfer expenditure rate of 80%. This would represent an increase in the level of municipal spending on gaming of between 1.45 to 1.52%.
Mr Whitehouse's November 2012 evidence report to the Tribunal stated:
- The expected annual spending on the new EGMs would be in a range between $5,327,123 and $5,623,074.
- The expected transferred expenditure rate was 80%. Following this approach, the net new annual gaming spending arising from the proposal would be between $964,362 and $1,017,938.
- This net new spending would represent an increase of between 1.52 to 1.6% in spending on this municipality.
Mr Whitehouse's April 2013 updated evidence report to the Tribunal stated:
- The expected annual spending on the new EGMs would be in a range between $5,330,771 and $5,626,925.
- The expected transferred expenditure rate was 80%. Following this approach, the net new annual gaming spending arising from the proposal would be between $1,066,154 and $1,125,385.
Whilst he was not called to give oral evidence, Mr Clyne's evidence report filed with the Tribunal on behalf of the Applicant included:
- He essentially supports Mr Whitehouse's estimates of the annual new gaming expenditure generated by the 54 new EGMs, albeit Mr Clyne considers that a lower level would apply during the first year of their operation; and
- Mr Clyne describes Mr Whitehouse's anticipated 80% transferred expenditure rate as "...at the upper end"[26].
In the course of presenting his sworn oral evidence to us and responding to cross-examination, Mr Whitehouse orally referred to the predicted 80% transfer expenditure rate as 'a guide'.
Mr Waddington's evidence report used 'gravity based modelling' and 'Melbourne CBD Clue Data Grid Areas' to assess the proposal[27]. His evidence was that the likely annual gaming expenditure for this proposal is $4.5 million and the level of transferred expenditure is 85%.
The was no competing economic expenditure evidence called by Council as the Council conceded that it did not see this as a central issue in this proceeding.
Net additional gaming spending generated by the proposal which is not connected to problem gambling is an economic benefit of the proposal. We shall return to the issue of problem gaming further below, in discussing the likely social impacts of the proposal.
On the one hand, it does not inspire our confidence in Mr Whitehouse's evidence that he has now given four different sets of figures regarding the expected annual gaming expenditure generated by the proposal. Similarly there is a discrepancy in the evidence as most of Mr Whitehouse's figures regarding the expected annual gaming spending on the 54 EGMs are above $5 million, whereas Mr Waddington puts this figure at $4.5 million.
We also see a lack of consistency in:
- Mr Whitehouse's expected level of transferred expenditure dropping from a discussion figure as high as 90% in his November 2011 report down to '80% as a guide' in his oral evidence before us;
- Mr Waddington's equivalent figure being 85%; and
- Mr Clyne describing 80% transferred expenditure as 'at the upper end'.
Given these shortcomings of the evidence and related concerns about expenditure analysis and evidence raised in previous Tribunal decisions[28], our own view is that:
- the likely annual gaming expenditure generated by the proposal would be somewhere between Mr Waddington's $4.5 million figure and Mr Whitehouse's figures in the very low $5 million range; and
- an anticipated transferred expenditure rate of 80-85% seems ambitious. It is very difficult to nominate a realistic figure on the information available; suffice to say that we agree with Council that the figure seems likely to be somewhere in the range of 60-80%[29].
Even allowing for these various uncertainties, the indications are that the proposed 54 EGMS would generate a level of net new annual gaming expenditure somewhat higher than Mr Whitehouse's nominated figure of around $1 million. While the indications are that a significant minority of this net new spending will be associated with problem gaming (see our discussion below), we acknowledge that:
- one would expect that the majority of this net new gaming expenditure will come from ordinary gaming patrons; and
- this should be treated as an economic benefit which can be given some weight, although tempered by the already gambling-intensive nature of the central city.

[85]

Kingfish Victoria is proposing to provide a community contribution of $81,000 per annum indexed to CPI for a period of 10 years to the 20th Man Fund Inc. This charity was created by Mr Twentyman in 1984 and it provides a range of services for disadvantaged youth in Melbourne and wider Victoria. Mr Twentyman gave evidence that this will allow the employment of a full time youth worker who will primarily work in the central city, including around Crown Casino. He explained he has someone in mind who has 30 years experience. He said intervention is not just short term but potentially has life-long benefits for the typically disadvantaged young people his charity assists. He agreed with Mr Hooper's suggestion that the 20th Man Fund Inc has positive benefits for a cross-section of society in terms of socio-economic status and geographic location.
We accept that there is a real and tangible economic benefit here. Firstly, it is important that the community contribution will directly benefit a CBD-oriented charity. The full time youth worker position that would be created by the community contribution would be very much based in, and be for the benefit of vulnerable youth in the central city. Secondly, we can see an indirect economic benefit as well as a homeless/vulnerable/at-risk young person substantially supported by the new full time youth worker is much more likely to be able to improve themselves, including having a wage, paying taxes and spending money on goods or services including in the CBD community. This obviously has social benefits as well, as discussed further below.
We are conscious that there was a previous lack of certainty about the ability to lock in such a community contribution as part of a gaming approval, which was seen at [58-66] of the Francis Hotel decision as a problem for considering the economic benefit of this aspect of gaming proposals. However, the Castlemaine decision has ratified the ability of a gaming decision maker to include a formal condition requiring the on-going community contribution payment to be made. As such, we find the proposed community contribution to be a significant economic benefit in this case.

[108]

We have already discussed above that we accept that the proposal involves about $800,000[31] worth of refurbishment to the non-gaming interior of the hotel, which will improve its offer to the public. While hardly a new idea, the artists' impressions provided to us indicate that the intended new upmarket sports bar may well have considerable patron appeal.
While the actual sum involved of $800,000 is unremarkable in the CBD context where huge projects are not unusual, Mr Smith's evidence at the hearing included his position that the proposed gaming room is an essential part of his preference that this remain one of the few larger/traditional hotels in Melbourne. Mr Smith stated that as the current profitability of this hotel is marginal, if the proposed gaming room does not go ahead, the hotel instead is likely to change in the short to medium term, e.g. changing to the type of nightclub or adult entertainment venue that already dominate the King Street entertainment precinct.
We acknowledge that having a more traditional form of full-service hotel located in the King Street entertainment precinct does have a significant social benefit, in diversifying the late night options for visitors to this entertainment precinct. This is a benefit for this community, where it is common ground that hundreds of thousands of workers and visitors will use this King Street precinct over any one year. Following this approach, it is fair that we give real weight to the fact that very large numbers of people (notably visitors, students or workers) using this entertainment precinct in more late-night situations will have the benefit of a more low-key licensed venue, for drinking or eating purposes (as well as the proposed gaming offering). Particularly in the situation where the King Street entertainment precinct has a 'less than pristine' reputation for late night excessive behaviour, we can see a real social benefit in having a more traditional hotel trading into the early hours. With respect to Mr Smith's evidence that a failed gaming application might lead to a nightclub or adult entertainment proposal, while this might be one scenario coming out of this proposal being unsuccessful, it involves speculation and is not a matter upon which we place much weight.

[110]

To recap from our analysis of the economic expenditure evidence, it appears the proposal would generate somewhat in excess of $1 million of annual net new gaming spending. In the situation where not even the Applicant was suggesting this proposal can completely avoid problem gamblers, it seems fair to say that it is inevitable that some of this additional gaming spending will come from problem gaming. As mentioned, the Productivity Commission estimates that about 40% of all gaming revenue is from problem gamblers. However, we reiterate that in this gaming assessment, the issue is to what extent the proposal would worsen problem gambling as a social impact in the CBD community.
This assessment is made more difficult by the fact that, compared to say alcoholism, problem gamblers are harder to identify and quantify. However there is little doubt from the available research data and information that problem gambling is a long-running and well established social problem. Indeed, even the Applicant and its witnesses acknowledged per se the seriousness of this problem.
Council's witness Dr Livingstone took the approach that the available research indicates that any increase in the number of EGMs will inherently exacerbate the extent of problem-gambling. Dr Livingstone noted that the available research indicates that while the overall percentage of the community involved in gambling has been dropping in recent years, the proportion of those persons still gaming who are affected by 'problem gambling' has stayed fairly constant. At page 10 of his report, Dr Livingstone's evidence was that studies and reports over recent years provide "strong indications of a relatively robust relationship between EGM density, the prevalence of moderate risk and problem gambling, and the level of per capita EGM expenditure". Following this approach, regardless of the nature of the proposed venue, the location and/or the operator involved, Dr Livingston sees it as inherent that the potential approval of the 54 additional EGMs will in turn proportionally worsen problem gambling in this community[32].
By contrast, the evidence of Mr Jeynes, Mr O'Kane, Mr Lanning and Mr Smith (all on behalf of the Applicant) was that, if approved, this venue would operate in a very professional manner and have a strong commitment to 'responsible gaming'/'harm minimisation' practices. There would always be two staff in the gaming area and appropriate liaison with related stakeholders such as 'Gamblers Help'. They put to us that a dress code and the intended location of the gaming room at the very rear of the hotel interior would make it less attractive to problem gamblers. They also emphasised (as did Ms Jordan and Ms Peterson) that there is no issue here of a 'clustering of gaming venues', or a streetscape presentation of the gaming area to the public realm (which is the case with the Batmans Hill venue and which was an issue in the Francis Hotel decision).
With respect to the proximity of other existing gaming venues, the witnesses emphasised that the Mail Exchange and Batmans Hill venues already exist a few hundred metres away, as well as Crown Casino. Following this approach:
- there is already considerable gaming activity in this locality, and the approval of these 54 EGMs would not be a fundamental shift; and
- at worst, the approval of the proposal would only marginally increase any problem gambling in this community.
A further relevant factor here is the demographics of the community in this municipality, notably in the CBD. In particular, what proportion of this municipality's community (notably in the CBD) are more disadvantaged and seen as more at risk per se of problem gambling?. In this regard, it was the evidence of Ms Peterson that the overall level of disadvantage in this CBD community is quite modest. In reviewing the available demographic evidence for all users of the central city, her evidence was that:
- It needs to be kept in mind that local residents only make up a very small proportion of all users of the CBD, with workers, students and visitors dominating[33].
- The socio-economic profile of this central city community is relatively favourable, when one factors in not only the local residents but the large numbers of white collar workers, students and visitors using the CBD[34].
- In relation to the relevant SEIFA ranking results for residents living in this western CBD location using the SEIFA Index (which is a measure of the level of social disadvantage amongst the residents of any one area), these ranking results indicate that there is no significant level of disadvantage for these residents[35].
This emphasis by Ms Peterson on the particular demographic characteristics of this CBD community can be contrasted with Dr Livingstone's concession (during his cross-examination about the CBD location) that his assessment of the proposal had not been 'location specific'[36]. The general picture set out above is consistent with the evidence of Mr Milner on this issue, who conceded during his cross examination that the resident profile for the CBD generally is not one of a significantly disadvantaged community.
Dr Livingstone's approach that more EGMs inherently causes more problem gambling is simplistic. Indeed, as part of the Applicant's cross-examination of Dr Livingstone, he did not dispute the proposition that his evidence was more 'high-level' in nature, rather than specific to this particular proposal and the particular demographics of this CBD location.
In assessing the extent to which this proposal would exacerbate problem gaming in this community, we consider that we need to balance:
- on the one hand, the well established and significant nature of problem gambling as a social problem, including the difficulty in practice of identifying and treating problem gamblers; and
- on the other hand, the credible sworn evidence from Mr Jeynes, Mr O'Kane, Mr Lanning and Mr Smith that a high priority will be given to 'best practice' in terms of managing the venue so as to minimise any adverse 'problem gaming' consequences of the proposal on this community. We acknowledge that all of these witnesses have expertise and experience in their fields of managing gaming rooms and/or hotels. Apart from the gaming area being monitored by two staff and a dress code applying, we agree that it is a benefit for the proposal that the gaming room would be at the very rear of the interior of the hotel.
On balance, it seems virtually inevitable and unfortunate that the approval of 54 new EGMs in this hotel would contribute to some degree of increase in problem gambling in this community. Indeed, none of the Applicant's witnesses or advocates suggested that the proposed gaming venue could be 'problem gambling free'. However, we are satisfied that the 'problem gambling' social disbenefits of the proposal are tempered by:
- the available data indicating that there is no particular level of social disadvantage amongst this CBD community;
- the abovementioned strong management commitment to 'responsible gambling'/'harm minimisation'; and
- the fact that the proposed 54 EGMs would be the third gaming venue of this type in the western end of the CBD (where the casino also lies).

[112]

We acknowledge a risk that the proposed 54 EGMs might cause increased problem gambling behaviour by any of the 24 Ebsworth House residents is an important issue. Dr Livingstone saw the potential impacts on Ebsworth House as 'potentially catastrophic' as his evidence was that (despite their very modest 'income') persons living off social security can still become problem gamblers .
It is common ground that these residents are typically elderly, previously homeless and vulnerable. We were told by Ms Rice and Ms Hartnett that they pay 25% of their welfare payments as rent and can ultimately face eviction if they get behind in their rent payments because of addictive behaviour such as problem gambling. The submission made by Ms Reeve stated that currently 10 of the 24 residents either have a history of problem gambling involving EGMs or are specifically seen as being 'at-risk' of problem gambling. We are also conscious that Ebsworth House is one of only two such social housing facilities in the CBD catering specifically for elderly people[37].
It must be remembered that, being a gaming application, the question here is the likely social disbenefit of a risk of problem gambling for the CBD community of this municipality and not just some of the adjacent 24 residents. When assessed on this basis, it has to be said that:
- 10 of 24 Ebsworth House residents is a small number of people who are particularly at risk of lapsing or re-lapsing into problem gambling when balanced against
- the hundreds of thousands of central city users that live in, visit, study or work in the CBD (notably the King Street precinct) over any one year, who may gain a social benefit from the proposal going ahead[38].
It is our understanding that the Commission was unaware of the existence of the social housing facility in Ebsworth House and the concerns of its owner, manager and residents at the time of the Commission's hearing. Hence, this social housing facility is not a factor that was specifically considered.
Whilst there is no doubt the impact on Ebsworth House residents is an important consideration, the nature of the gaming assessment explained above means that we can give no more than medium weight to the likely social disbenefit of the risk of additional problem gambling by the adjacent residents. The Commission decision of Re Schwartz Family Company Pty Ltd dated 30 November 2007 reinforces the appropriateness of at least 'medium weight' being applied despite the small number of Ebsworth residents involved. In that case the Commission refused 30 proposed EGMs at the Victoria Hotel in the eastern section of Little Collins Street primarily due to the hotel's very close proximity to the 'Urban Seed' support organisation founded by the then Reverend Tim Costello of the Collins Street Baptist Church. At paragraph 103 the Commission concluded:

[118]

The clear economic benefits and the 'break even' situation in terms of social benefits and disbenefits means we are satisfied that the likely social and economic impacts of the proposal will not cause any net detriment to the wellbeing of this CBD community. Hence we find gaming approval should be granted subject to conditions based on our findings of the discussion about such conditions that took place at the end of the hearing (see Appendix 1 for the conditions). We have made various amendments to these conditions, both as a matter of 'good drafting', and also to ensure they still make sense where no planning approval has been granted.
Our 'good drafting' changes include making proper provision for the charitable contribution payments to operate for 10 years. Although it seems a real point for debate whether there should be any sunset date at all to this 'charitable contribution' requirement if the venue operator might continue to make profit from the machines over a longer period, and we are conscious that the draft gaming conditions provided to us make no reference to any such sunset date, we see a reasonable compromise as being that it is left to the Commission's discretion whether or not any revised charitable contribution needs to be formally renegotiated at the end of the 10 year period. (See the new conditions in Appendix 1).
We have also built into the conditions what we regard as a more realistic and sensible 'grace period' arrangement to deal with the possibility of the venue operator being in default of paying the necessary charitable contribution payment - see Condition 6 in Appendix 1. Under this revised arrangement, if there is an on-going default situation, the machines cannot be used in the meantime (which we see as a more appropriate outcome than the approval completely lapsing).
We have also inserted new Conditions 7-9, which assume the gaming venue has become operational and deal with the possibility of the Venue Operator gaining commercial approval to keep operating the 54 EGMs in these premises beyond the initial 10 year period during which community contributions must be paid. Unless such on-going entitlements have already separately dealt with the issue of ongoing community contributions, we see it as important that Conditions 7-9 provide an on-going basis (subject to the discretion of the Commission) for the Venue Operator to keep making the charitable payments to the 20th Man Fund beyond the initial 10 year period. We say 'important' because in the situation where we understand these charitable payments will be fully funding a valuable role in the form of a CBD youth support worker, we consider that ideally this worker:
- should have continuity of employment if the 54 EGMs continue operating after the initial 10 year period; and
- should remain funded by this charitable contribution for so long as the 54 EGMs keep operating at this venue.

[120]

We move now to assessing the planning merits of the proposal. As explained above:
- the Knox City Council v Tulcany decision tells us that the requirement here is that the proposal be an 'acceptable' planning outcome;
- the planning assessment focuses on locating EGMs in appropriate locations and premises taking into consideration the social and economic impacts of the location of the EGMs;
- the planning decision maker needs to take into account the relevant planning controls and policies, and the relevance of previous decisions.
We have no concern with the proposed expansion of the hotel use to the rear parts of the ground floor interior. The necessary loading/unloading and bicycle waivers are also acceptable. We find the proposal has a number of positive features, as follows:
First, during the hearing we received extensive sworn evidence from Mr Jeynes, Mr O'Kane, Mr Lanning and Mr Smith regarding the proposed operation of the new gaming room. In particular, they dealt at length with the intention that this venue give a high priority to 'responsible gaming' and 'harm minimisation' as part of the operation of the proposed 54 EGMs. In summary, we are satisfied that there is a bona fide intent that this be an important part of the management of the facility and that these witnesses all have experience in their respective fields of managing gaming rooms and/or hotels.
Second, this is a proposal for a full-service traditional hotel with the new gaming room would be at the very rear of its interior. There will only be one entrance to the new gaming room, enabling easy monitoring by staff. There is no line of sight between this hotel and the other nearest gaming venues. Our inspection of the hotel reinforced that it has an unusually large ground floor area providing a range of offerings such as a bar area, bistro, live music area and areas for functions. We accept that a positive feature of the proposal is the new gaming room would be only one of various offerings of the hotel and that someone wishing to use the gaming room will need to walk past/through the other offerings to get to the gaming room at the rear of the interior, which may discourage some problem gamblers from using the facility.
Third, the nearest existing gaming venue (the Mail Exchange hotel) is about 350 metres away and it was common ground that there is no issue of 'clustering' of gaming venues (an issue in the Francis Hotel case).
Fourth, the proposal involves about $800,000 of spending on the refurbishment of the non-gaming areas of the hotel interior, including the creation of a new upmarket sports bar area and enhanced functions areas. We also acknowledge that part of the overall proposal involves live music needing to cease by 3 am rather than 4.00 am, and the cap on patrons being reduced from 995 to 895 persons. A further positive feature is the proposed upgrading of the Gallaghers Place security, signage and lighting arrangements.
Fifth, apart from Ebsworth House, we accept that there are no other nearby uses of any particular sensitivity or risk of unacceptable social or economic impacts as a result of the proposed EGMs.
Sixth, we accept the expert acoustic evidence of Ms Hui about potential noise impacts on Ebsworth House from live music at the hotel. The intention is for the live music to be part of the mix of full services offered by the hotel rather than a dominant feature. Through good management and the use of a 'noise limiter' to minimise the potential for 'noise escape' through the east-facing side door of the hotel, we regard this aspect of the proposal to be acceptable.
However this brings us to other important planning issues, which are more complex and require closer consideration. These more challenging issues are:
- Reviewing the applicable planning framework and the extent of planning framework support for the proposal.
- Considering the implications of previous Tribunal decisions involving gaming proposals for sites near social housing facilities.
- Analysing whether or not it is appropriate for the Tribunal to assess the proposal here on the basis that the hotel publican can exclude Ebsworth House residents from entering any part of the hotel.
- Whether the compatibility issues between the proposal and the adjacent Ebsworth House are unacceptable.
We shall now consider these issues in more detail.

[146]

After some further discussion, excluding footnotes for convenience, the Tribunal then stated as follows (with our underlining):
1. Having made a finding that the social and economic impacts of a gaming proposal on a proximate community of disadvantage may in certain circumstances lead to a conclusion that the location of a venue is inappropriate, thereby weighing against the grant of a permit, our decision now hinges on the proper application of the evidence in front of us. This is where we consider the responsible authority's case fails.
2. We acknowledge that the factors that influence a propensity to game and the likelihood of this activity causing significant social impacts are very complex and layered. Assessing social and economic impacts at the level of detail we are required to do is even more of a challenge.
3. Social planning evidence relating to the impacts of gaming (possibly more so than the economic impacts of gaming) is still at a level one might refer to as the "big picture" level, although new research is constantly emerging and being (sic) refining. We consider that there is a need for much more detailed local analysis in particular applications such as this one if opposition to applications is to proceed.
The Tribunal then went to on assess the evidence put forward, particularly that opposing the proposed 40 EGMs. Importantly for our purposes, it then found as follows:
1. An additional complication for the responsible authority's case in terms of evidence is that Mr Weston did not satisfy us of the increased risk that might be posed to the public housing community compared to that which already exists by their ability to access thousands of similar machines at Crown Casino, less than 700 metres away. While we might assume that a local venue may be more attractive to these people for a number of reasons and/or likely to be used more frequently, there was no reliable evidence presented on this issue. Similarly, there was no persuasive evidence presented that increased availability or more frequent use would necessarily equate to higher numbers of problem gamblers or other social/economic vulnerabilities in this case.

[149]

The Tribunal also quoted with approval paragraph 48 of the Bells Hotel decision, which we have set out above.
Kingfish Victoria Pty Ltd v Port Phillip CC[43] was a planning application involving the proposed installation of 25 EGMs into the Golden Fleece Hotel in Montague Street, South Melbourne (which the Tribunal approved). Similar to the Bay and Bridge Hotel case, there was social housing about 400 metres from the review site. In finding the situation to be acceptable, the Tribunal emphasised at paragraphs 32 that the noisy nature of the direct route between the hotel and the social housing (plus needing to cross a busy four lane road) made it unlikely that this would be a '...desirable or highly patronised route to travel'. The Tribunal also saw it as significant that there would be no lines of sight between the social housing and the subject site.
In the recent Queensberry Hotel decision, it was proposed to install 30 EGMs at the subject hotel on the corner of Swanston and Queensberry Streets (being on the north-east corner of the overall Grocon CUB site). At paragraph 83 the Tribunal concluded that the proposed new Grocon redevelopment of the CUB site may result in the proposed EGMs unreasonably promoting 'convenience gambling' of the type which Clause 52.28 is seeking to avoid.
At paragraphs 76-77 the Tribunal reflected on the concerns being raised by Council and objectors about the degree of proximity between this hotel and public/social housing in this area. Whilst confirming that its refusal of the proposal was based on other factors, the Tribunal indicated in passing that it saw difficult issues arising in terms of 'where to draw the line' with the proximity of new EGMs to disadvantaged communities and how many such disadvantaged persons would need to be involved. While providing good food for thought, it seems fair to say that this commentary does not go beyond identifying some useful factors to be considered.
What can we learn from these previous decisions? On the one hand, the Trio Taverns decision seems an example of a case involving a social housing issue which very much turned on its own facts i.e. the EGMs were already there when the social housing facility was built nearby, plus it was a 'top-up' EGM application.
On the other hand, we see the Bells Hotel decision as having broad applicability (particularly the text we have underlined). It contains some useful points of reference where EGMs are proposed for a site in proximity to an existing social housing facility, notably that:
- the consideration of the interplay between the site of proposed EGMs and a nearby community seen as more vulnerable to the social and economic effects of the proposal is an appropriate factor for the Tribunal to consider in its discretion;
- if the interplay issues are acute enough, it may be that the review site is simply unsuitable for the proposed installation of EGMs;
- whilst the Tribunal was concerned about the proposed EGMs being across the road from a public housing facility, this line of objection failed essentially due a lack of substantiating evidence. A lack of corroborative evidence was also seen as a key consideration in the Bay and Bridge Hotel decision_._
We consider the balance of the cases discussed support an approach that:
- A Council and/or objector wishing to rely on a submission of 'increased risk of problem gambling' as part of opposing proposed EGMs needs to provide sufficient material and/or call substantiating evidence of same, rather than merely making assertions.
- While there is no 'magic formula', there is an obvious compatibility issue when the interplay involves an existing social housing facility adjacent to the site of the proposed EGMs.
- The extent of the intervening distance and the characteristics of that distance need to be considered carefully . For example, in the Golden Fleece Hotel decision the Tribunal saw the intervening distance of 350-400 metres as acceptable on the strength of a person walking along that intervening area needing to cross a major road and put up with high noise levels. In other words, the Tribunal was satisfied that these practical factors would in practice discourage residents of the nearby social housing facility from using the new EGMs. In the Queensberry Hotel decision the Tribunal noted that in theory a social facility could be 100 metres away from proposed new EGMs as the crow flies, but on the other side of a river; or it could be further along a tram line[44].

[151]

As part of the sworn evidence of Ms Rice, she was asked by the Applicant whether Wintringham would be prepared to work in partnership with the hotel, so as to minimise any impacts of the proposal on the Wintringham residents. It was queried for example whether this partnership could include facilitating the more at-risk residents formally 'self-excluding' from the proposed gaming facilities in this hotel. Ms Rice's response in no uncertain terms was that Wintringham regarded any such partnership as inappropriate and was conscious of respecting the privacy of any one resident. Hence the proposal needs to be assessed in the expectation that there will be minimal 'working together' between the gaming operator and Wintringham. A similar position in relation to Housing Choices Australia emerged from the sworn evidence of Ms Hartnett.
In the December hearing days, Mr Jeynes and Mr Lanning gave evidence that Ebsworth House residents could be strongly discouraged from using the proposed gaming room, but could not be excluded other than by self-exclusion. Near the end of the hearing, Mr Smith gave evidence that, as the publican of this hotel, any Ebsworth House residents seeking to enter the hotel would:
- be told straight away by the door staff that their patronage is declined; and
- be asked to leave the premises straight away.
Further aspects of this evidence are that Mr Smith indicated that he (or his staff) know a considerable number of the existing Ebsworth House residents, and that he believes he has the legal power as the publican to exclude the residents from the premises. However he conceded at the time of giving his evidence that he had not received any specialist legal advice about this 'power to exclude' issue[45].
While the Commission did not take any particular position on this issue, Mr Larkins for Council put to us that this proposed 'complete exclusion' of the residents would be both unlawful and also likely to have a negative impact on the self-esteem and dignity of any Ebsworth House resident put in this 'excluded' position. While it seems fair to say that the legal aspect to this debate was more addressed in passing rather than considered in detail, Mr Larkins in his closing submissions submitted that the total exclusion of the Ebsworth House residents from the hotel would be personally damaging to any such resident and a breach of the Charter of Human Rights and Responsibilities Act 2006 (Charter Act). In his closing submissions, Mr Larkins at paragraph 52 also queried whether any permit condition dealing with such complete exclusion would be seen as lacking a proper purpose, applying the normal criteria for assessing a contentious permit condition[46].
This was denied by Ms Brennan on behalf of the Applicant. She submitted that in the situation where no cooperation was forthcoming from Wintringham, the proposed total exclusion of Ebsworth House residents from the hotel premises was an appropriate course of action and would not constitute any breach of the Charter Act or any other related legislation.
It is important for the Tribunal to reach a considered view whether or not it can properly take into account this aspect of the proposal. This is because if the Tribunal is satisfied with Mr Smith's position on this issue, then (putting to one side for the moment any broader ethical queries about this course of action) we acknowledge that much of Council's case in opposing the proposal would fall away.
On balance, we are unconvinced that this 'total exclusion of Wintringham residents' proposed course of action is actually practical to carry out. We are struggling to see how either Mr Smith or his hotel staff would have any reliable prospect of knowing the appearance of the 24 Ebsworth House residents at any one time, so as to be able to in practice action the proposed 'total exclusion' policy. Some particular problems we see here are that:
- There is not just a handful of Ebsworth House residents involved in this exercise, but 24 of them. Even Mr Smith's own evidence at its highest was that he or his staff simply know some of the Ebsworth House residents - it was not suggested there is a familiarity with most or all of them.
- There is some degree of turnover of Wintringham residents. We were told during the hearing that over the previous year about 4 new residents had come to Ebsworth House.
- We would expect Mr Smith and his staff to mostly need to spend their working days inside, not outside, the hotel. Whilst it is true there is an external hotel door facing east towards Gallagher Place and Ebsworth House, this is a secondary service-oriented door, not the main entrance to the hotel. It would seem a highly ambitious project for the hotel to try to utilise occasional use of this east-facing service door and occasional night time security patrols of this area to get to know all 24 residents.
- It cannot be assumed that an Ebsworth House resident looking to enter the hotel (i.e. if the 54 EGMs were installed) will look so rough-around-the-edges as to be immediately recognisable as coming from Ebsworth House. We raised during the hearing what we consider to be a real possibility that an Ebsworth House resident in this type of situation would wear smarter clothes to the extent necessary to meet the hotel dress-code, making it difficult to distinguish Ebsworth House residents from other patrons.
- Assuming for the moment that the proposal goes ahead and (despite the hotel's best intentions) an Ebsworth House resident is identified only after entering the gaming room, it does beg the question as to how the hotel could physically remove such a resident from the hotel if the resident refuses to cooperate. Mr Smith indicated that the hotel would not 'man-handle' the resident. We acknowledge and appreciate this but there remains the question of what to do when a resident simply refuses to leave?
- It was telling in this regard that the sworn evidence of the proposed Gaming Manager Mr Lanning (who is experienced in this area) was that as Gaming Manager, he would not stop an Ebsworth House resident entering the gaming room if that person met the hotel dress code. If he thought it better for such a resident to leave, Mr Lanning's evidence was that this resident could be 'made to feel uncomfortable in staying'. Critically though, Mr Lanning conceded that as the Gaming Manager he could not physically stop a person from continuing to play a gaming machine. While it is possible Mr Smith as the publican might have more legal authority than Mr Lanning, it still remains unclear to us how a non-cooperative resident would be physically removed from the gaming room.
The problems expressed above are not resolved by the possibility of the 'total exclusion' approach being written into a permit condition or a Section 173 Agreement, given the advice of Council at the hearing that it would dispute the validity of such a permit condition and would be very reluctant to in practice enforce such a planning control requirement. Without the usual potential for Council enforcement to 'focus the mind' and help ensure compliance in practice, it is a very fair question to ask as to whether any such permit condition or Section 173 Agreement obligation would become almost meaningless in practice.
Even with Mr Smith's good intentions to totally exclude Ebsworth House residents for their own good[47], we still have a major concern as to 'what would happen next' if either a new Manager becomes involved without any history in this planning process, or otherwise if Kingfish Victoria Pty Ltd on-sells its interest in the hotel to a brand new operator. We have no confidence that a new Manager (let alone a completely new operator of the hotel) will necessarily share Mr Smith's goodwill and good intentions towards the Ebsworth House residents. Nor are they likely to know whom the residents are. Rather, we see a real risk that a new Manager or operator might lack the commitment to enforcing the proposed 'total exclusion' approach for Ebsworth House residents. This situation is not helped by the Council's reluctance to enforce any such planning permit requirements.
In summary, while we accept it was put forward by Mr Smith with good intentions, we see major practical problems with his proposed arrangement that (if the proposal goes ahead) any Ebsworth House residents are totally excluded from the hotel. Our finding on this point is consistent with Dr Livingstone's view that it would be impractical for the hotel management to seek to exclude Wintringham residents from the using the proposed 54 new EGMs.
Having made this finding, it is unnecessary for the Tribunal to consider whether or not such 'total exclusion' would constitute a breach of the Charter Act or any related anti-discrimination legislation. Whilst this seems a possibility, it cannot be put any higher than that. If this issue does need to be properly resolved at some point, this is now an issue for another day.

[153]

We have already explained how Clause 52.28 is the key aspect of the planning framework for our assessment purposes here. Two particular factors here are:
- ensuring that gaming machines are located in appropriate locations; and
- reviewing the compatibility of the gaming proposal with adjoining and nearby land uses.
If the situation arises where the Tribunal does need to consider 'social housing facilities' as an example of reviewing the compatibility of a gaming proposal with such 'adjoining and nearby land uses', we have discussed relevant previous Tribunal decisions grappling with this issue. The key message coming out of these decisions is that the proximity of existing social housing facilities to the proposed location of EGMs is seen as a potential problem or even a fatal flaw. However, where such proximity concerns arise, they need to be supported with suitable corroborating evidence rather than mere assertions.
We have explained why we consider it inappropriate for us to consider that any Ebsworth House residents would (if the proposal goes ahead) be completely excluded. Rather, the reality is that the 'appropriate location' and 'compatibility' assessments to be considered (as appropriate) pursuant to Clause 52.28 need to be conducted on the basis that it is possible (assuming the resident does not actively self-exclude) for an Ebsworth House resident to visit and utilise the new gaming room at the back of the interior of this hotel.
This brings us to the critical issue on which this combined proceeding has turned, being whether there is an unacceptable compatibility issue between the proposal and the Wintringham social housing facility in the adjacent Ebsworth House.
In reaching our decision on this issue, we see the basic facts in question in the Bells Hotel decision as very comparable to the situation here. In both cases, the hotel in which the EGMs would be installed was/is across the road/laneway from a facility providing for a disadvantaged/vulnerable group of people who are more at risk of lapsing or re-lapsing into problem gambling.
Whereas in the Bells Hotel decision the only expert evidence called by Council (in opposing the proposal) was social planning evidence by Mr Weston, Melbourne City Council in this case has provided a much more comprehensive range of evidence, in the form of:
- not only sworn expert planning evidence from a very experienced planner in Mr Milner; but also
- a senior academic witness with specialist expertise in problem gaming, in the form of Dr Livingstone; plus
- direct sworn evidence from a Wintringham Manager in the form of Ms Rice, together with direct sworn evidence from the CEO of the landlord company Housing Choices Australia Ltd in Ms Hartnett.
In addition Ms Reeve addressed us on behalf of one of the Ebsworth House resident, Ms Newman.
In relation to the expert evidence, both Mr Milner and Dr Livingston expressed major concerns about the potential for new EGMs to place at least some of the Ebsworth House residents at a higher risk of lapsing or re-lapsing into problem gaming.
The thrust of Mr Milner's evidence was that while he otherwise did not have any major planning concerns about the proposal, he considered there to be unacceptable compatibility/proximity problems arising from the proposed installation of the 54 new EGMs in a hotel adjacent to the Wintringham facility. He emphasised the fact that Ebsworth House is not just near but literally across the laneway from the hotel. This very close proximity in his view unreasonably creates a 'convenience gaming' situation for those residents more at-risk of problem gambling. During his cross examination, Mr Milner expressed the view that 'responsible gaming' only goes so far and sometimes the best form of 'risk minimisation' is simply to avoid having a gaming venue so close to a vulnerable group like the Ebsworth House residents.
Key aspects of Dr Livingstone's evidence included that:
- persons prone to problem gambling often try to avoid walking past gaming venues, as such close proximity can contribute to lapsing/re-lapsing into problem gambling; and
- approving the proposal would put gaming 'virtually on the doorstep' of the Ebsworth House residents, with 'potentially catastrophic' results.
In our opinion, the most influential material and corroborating evidence about the compatibility of land uses came from the combined evidence of Ms Rice and Ms Hartnett (supplemented by the comments of Ms Reeve). We consider that in totality this is strong evidence that:
- This type of specialist social housing provided by Wintringham in the CBD for elderly, typically former homeless people with an attachment to the CBD is a 'scarce resource' and a quite specialised area of care. This is in the situation where both Mr Jeynes and Mr Lanning conceded as part of their evidence that they have not previously had to deal with a gaming venue located near a social housing facility like that run by Wintringham.
- Some of the Ebsworth House residents (currently 10) either already have a problem-gambling history with EGMs or are seen as specifically at-risk in this regard.
- While it is true that there are other gaming facilities in this western part of the CBD (including Crown Casino), the more at-risk residents typically (for their own welfare) seek to avoid walking past other gaming facilities, which is easier when currently the closest gaming venue is the Mail Exchange Hotel about 350 metres away.
- Ebsworth House residents usually do not work and often have little family or friends, and accordingly often experience isolation and/or loneliness. In this situation, gaming rooms can be attractive venues, as residents need to 'fill in their days' and gaming rooms offer the opportunity 'for a chat'.
- Ebsworth House residents will not necessarily self-exclude themselves from gaming venues, even if they have a history of problem gambling, and Wintringham cannot force them to do so.
- In terms of which disadvantaged (often currently homeless) elderly persons might be placed at Ebsworth House if a vacancy arises, Wintringham already has to exercise a degree of screening. We were advised of one potential resident who chose not to live there because of the proximity to Crown Casino in terms of problem gaming issues. If the proposed 54 EGMs are installed, this close proximity may make it harder for Wintringham to place new disadvantaged persons with a history of problem gambling at Ebsworth House.
- Residents at Ebsworth House are all living on welfare payments and need to pay 25% of same as rent. If any one resident was to experience problem behaviour such as problem gambling, this can in turn lead to that resident experiencing financial stress and potentially being unable to pay their basic bills e.g. for food and utilities. This can ultimately lead to the resident being evicted by the landlord Housing Choices Australia Ltd, a situation that is rare at present.
In the context of these existing constraints/complications to how the Wintringham facility at Ebsworth House operates, we are persuaded that installing 54 EGMs in the subject hotel, directly across the laneway from Ebsworth House, will have a negative social impact on the operation of the Wintringham facility and potential negative social and economic impacts if residents ultimately struggle and face eviction. In particular, having these new EGMs so close to the Ebsworth House residents will create for their purposes an increased potential for exposure to gaming (for at least the 10 residents identified during the hearing as having a specific risk of lapsing or re-lapsing into problem gambling behaviour).
This combined evidence outlined above satisfies us that Council has presented a strong case that there are major compatibility problems between the proposal and the adjacent existing Wintringham facility.
We do not see this compatibility issue as overcome by the various straightforward positive features of the proposal outlined earlier. Neither do we see this compatibility issue as overcome by the Applicant's reliance upon:
- the fact that there are already other existing gaming venues within walking distance of Ebsworth House; or
- the intention that the management of the new gaming room include a strong commitment to 'responsible gaming' and 'harm minimisation'.
With the first of these points, we see the more compelling aspect to this situation as being the strong evidence presented by Council that having new EGMs in this hotel adjacent to Ebsworth House will be a negative shift, in exposing the residents to a much closer proximity of gaming, thereby contributing to the risk of some of these residents lapsing or re-lapsing into problem gambling. As mentioned, we see the situation here as overlapping significantly with the in-principle concerns raised by the Tribunal in the Bells Hotel decision.
While the Applicant's commitment to 'responsible gaming' and 'harm minimisation' is worthy in itself, this in itself is not a panacea for dealing with problem gambling. We have already explained above why we consider an intended approach of 'the total exclusion of Wintringham residents from the hotel' to be problematic. We are also conscious that at a community-wide level, the issue of problem gaming remains a very live and serious one, despite greater awareness and effort in the gaming industry regarding 'responsible gaming' in recent years. This is consistent with DP Dwyer's following statement in the Castlemaine decision (with our highlighting):
1. Responsible gaming initiatives, such as the adoption of the Mercury Group responsible gambling guidelines proposed at Castlemaine, are also important. They further the purpose of the GR Act to foster responsible gambling and minimise harm. They reduce - at least in part - the weight and extent of the negative social impacts of gaming for the purposes of the 'no net detriment' test for a particular venue. However, equally, given all gaming venues claim to adopt responsible gaming guidelines and initiatives in one form or another, they are not a silver bullet to the ills of the problem gaming. The Productivity Commission report acknowledges that the prevalence of problem gambling has declined slightly since the 1990's - perhaps due in part to responsible gaming initiatives - but it remains a serious social issue despite several years of responsible gaming initiatives at gaming venues.
For the above reasons, our overall finding in the planning proceeding is that having regard to the key criteria in Clause 52.28, we consider:
- there is unacceptable compatibility between 54 EGMs in this hotel and the existing Wintringham social housing facility in Ebsworth House next door; and
- this fundamentally means the review site is a poor and unacceptable location for the proposed EGMs.
Ms Jordan and Ms Peterson gave evidence that 'which premises started operating first' is a relevant consideration. Whilst we agree in principle, we find in this case it is not determinative, as both Exchange Hotel and Ebsworth House have co-existed for over two decades. Indeed, co-existing land uses and their compatibility or otherwise is an inherent aspect of our planning system. This is not a situation like in Trio Taverns where a social housing facility made a voluntary decision to locate near EGMs; or HCA's decision to build a low income accommodation in Gaffney Street Pascoe Vale near a gaming room in Taverner Hotel[48]. In the event that the Exchange Hotel did open first[49], Wintringham did make a decision to locate next to a hotel. Nevertheless a gaming room in a hotel is a land use that requires planning permission and requires consideration of different matters to those relevant to a licensed premises. In accordance with clause 52.28, our decision is based upon the compatibility of this proposed land use and Ebsworth House and the social and economic impacts of the proposed location of the EGMs.
For the reasons we have already explained, we find the review site is an unacceptable location for the proposed EGMs. Accordingly in the planning proceeding we have made orders affirming Council's Notice of Refusal to Grant a Permit.

[154]

In the earlier section of these reasons, we provided an introduction to this combined proceeding and explained the different assessment process and approval requirements for the necessary gaming approval under the Gambling Regulation Act 2003, compared to the equivalent assessment/approval arrangements under the Victorian planning framework. We noted that given these differences, achieving approval under one framework does not mean that approval under the other framework will just follow as of course. Each is assessed on its own merits.
In the situation here, we are conscious that the Applicant has made a comprehensive application for review to the Tribunal, has indicated a strong commitment to 'responsible gaming' principles, and called a wide range of experienced witnesses. We see the Applicant's intention to seek to continue operating this establishment as a full-service hotel as commendable, particularly in offering more variety to a King Street entertainment precinct otherwise dominated by nightclubs and adult entertainment venues.
At an in-principle level, we would expect that in many other locational situations, the case which the Applicant ran before us would have justified both gaming and planning approval for the proposed EGMs. However the reality is that the review site here lies opposite a building providing a relatively rare form of specialist social housing for elderly disadvantaged persons, who were often homeless before moving to that facility. In finding that this close proximity still allows for gaming approval but is fatal to the necessary planning approval, we endorse the evidence of Mr Milner that sometimes the most appropriate form of 'harm minimisation' is to simply to avoid an unacceptable 'compatibility' situation arising in the first place. Hence it seems fair to say that in many ways the proposal is 'a victim of its own location'.
With this being to our knowledge the first Tribunal decision where gaming approval has been granted but planning approval refused, we make the following closing comments. Our overall findings throw the spotlight on how close any one gaming proposal can be to a social housing facility whose residents are more vulnerable to problem gambling, beyond which fatal planning problems arise. While this is always a question of degree, we have noted above that our findings in this case accord with the in-principle concerns raised by the Tribunal in the Bells Hotel decision.
Having acknowledged the more 'shoulder-to-shoulder' nature of different uses in the CBD, we would expect that the 'compatibility' problems under Clause 52.28 with this proposal would be less acute elsewhere in the CBD. However, ultimately, compatibility issues need to be assessed on their own facts. The facts of this case have led us to conclude the compatibility between this proposed gaming venue and Ebsworth House is unacceptable.

[155]

The use of any gaming machines within the premises must not commence until all buildings and works as detailed on the following plans have been completed - Drawing No. SK-101 Revision J and No. SK-103 Revision A or such other plans that accord with the applicable planning permit to the satisfaction of the Victorian Commission for Gambling and Liquor Regulation ("Commission").
The 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.
Subject also to the additional requirements of the following conditions, the current and any future venue operator of the premises ("the Venue Operator") must make an annual payment ("the Contribution") of $81,000 per annum (indexed each year to the relevant Consumer Price Index), to be paid as follows. The initial Contribution payment must be made by the end of the calendar year within which any of the 54 gaming machines permitted begin operating from the premises. If and when any such Initial Payment Date occurs, the Venue Operator must over the following nine years make a further Contribution payment of $81,000 plus the appropriate indexation on each anniversary of the Initial Payment Date by the end of each subsequent calendar year.
The Contribution must be paid on each of the relevant nominated dates to the 20th Man Fund Inc, or in the event that the 20th Man Fund Inc ceases to operate, to an alternative like charitable organisation to the satisfaction of the Commission.
In relation to each necessary payment of the Contribution, the Venue Operator must immediately provide written verification to the Commission that the payment has duly occurred.
If any Contribution payment on any of the anniversary dates is not made, the Venue Operator shall have a 14 day grace period to make such payment. The Venue Operator must provide the Commission with written confirmation by the end of this grace period whether the outstanding payment has been made. If by the end of this grace period the necessary Contribution payment remains outstanding, then the use of the gaming machines must completely and immediately cease for so long as the necessary Contribution payment remains outstanding.
If the Venue Operator is commercially entitled to keep operating the 54 gaming machines within the premises beyond the 10 year period provided for in Condition 3 above, then in relation to the period after the expiry of this 10 year period (subject to the proviso set out in the following sentence), the 'charitable contribution' arrangements set out in Conditions 8 and 9 below will continue to operate. The proviso is that if this on-going entitlement to operate the 54 machines after the expiry of the 10 year period includes the Commission[50] having already separately dealt with this issue of potential on-going charitable contributions, then these Conditions 7-9 shall be deemed to be void.
At least six (6) months prior to the end of the 10 year period referred to in Condition 3 above, the Commission[51] must advise the Venue Operator in writing whether (at the discretion of the Commission):
- (a) the requirement for the Venue Operator to make any form of annual charitable contribution shall completely cease at the end of the 10 year period; or
- (b) a revised annual charitable contribution arrangement must be re-negotiated and these conditions updated to incorporate that revised arrangement.

Melbourne CC v Kingfish Victoria Pty Ltd & Anor

At a glance

Court

Decision date

Source

Judgment (202 paragraphs)

Melbourne CC v Kingfish Victoria Pty Ltd & Anor (Includes Summary) (Red Dot) [2013] VCAT 1130 (25 June 2013)

Parties