Commission refuses application for additional 20 pokies at Club Officer

Friday, 29 December 2017

On 31 October and 13 November 2017, the Victorian Commission for Gambling and Liquor Regulation heard an application from Pakenham Racing Club Inc to increase the number of pokies at Club Officer, in the Shire of Cardinia, from 60 to 80.

The application was unusual, in that the additional pokies were to be installed at Club Officer but no significant changes made at this venue. Instead, the additional revenue from the pokies was to used by Pakenham Racing Club to refurbish its other gaming venue, the Cardinia Club, also located in the Shire of Cardinia. A new Mecure Hotel is to be constructed near the Cardinia Club and it is proposed for the club to provide food, beverage, entertainment and function requirements to hotel guests. Pakenham Racing Club considers a refurbishment is required to bring the Cardinia Club up to a suitable standard for these purposes. However, the Cardinia Club currently operates the maximum permitted number of 105 pokies, meaning Pakenham Racing Club cannot install more pokies there to generate the required additional revenue to fund the refurbishment.

The Shire of Cardinia opposed the application and appeared at the hearing.

On 4 December 2017, the commission refused the application.

After considering the material before it, the commission was not satisfied that the social and economic impact of the application would not be detrimental to the wellbeing of the Cardinia community. Accordingly. the 'no net detriment' test was not met.

Economic impact benefits and disbenefits

In making this determination, the commission weighed the following economic impact benefits and disbenefits.

Benefits

  • Expenditure on capital works at the Cardinia Club was given no to marginal weight. As no capital works are to be undertaken at Club Officer, this factor was given no weight.
    • The club proposed to undertake renovations at the Cardinia Club at an estimated cost of $1.5 million. While the amount of the renovations expenditure is significant, there is uncertainty about how much of the goods and services will be spent in Cardinia.
  • Complementary expenditure was given no to marginal weight at the Cardinia Club. As no estimate of new complementary expenditure was proposed at Club Officer, this factor was given no weight.
    • The club estimated that food revenue at the Cardinia Club would increase by $500,000 in the first 12 months as a result of the proposed renovations, while beverage revenue would increase by $350,000. However, the commission did not consider such new complementary expenditure as significant in the context of the Shire of Cardinia. The commission also considered a significant proportion of the new expenditure would be generated by commercial arrangements with the Mercure Hotel, which will be constructed regardless of the proposed renovations.
  • Additional employment was given no to marginal weight at the Cardinia Club and no weight at Club Officer.
    • In relation to the Cardinia Club, the commission considered there was a lack of evidence of the short-term employment benefits associated with the proposed renovations. There would be longer term benefits with a positive impact from the creation of an additional 9.5 full-time equivalent positions. However, this additional employment was not considered significant in the context of the Shire of Cardinia.
  • Community contributions was given no to marginal weight at Club Officer and no weight at the Cardinia Club.
    • Pakenham Racing Club proposed to increase community contributions from its Club Officer venue from $75,000 to $100,000 each year, with the contributions to be distributed to local sporting groups or clubs, local charities, local community organisations and local responsible service of gaming (RSG) providers. The commission considered these additional community contributions would have a relatively small positive economic impact. The commission also noted there would be no additional community contributions from the Cardinia Club venue.
  • Increased gaming competition in the Shire of Cardinia was given no weight.
    • The commission was of the view that the additional pokies at Club Officer will only increase gaming competition in a minor way, with a transfer rate of no more than 40 per cent. The number of additional pokies is small compared to the overall market in the Shire of Cardinia and the current utilisation rates of the current pokies does not suggest a substantive increase in gaming competition.
  • Increased tourism in the Shire of Cardinia was given no weight.
    • The commission noted the refurbished facilities at the Cardinia Club would be expected to provide a level of service to guests and function delegates staying at the new Mercure Hotel. However, these facilities are currently available at other venues in the Shire of Cardinia. The commission considered the applicant was unable to determine the estimated impact on tourism in the first 12 months of operation.
  • Gaming expenditure not associated with problem gambling was given no weight at the Cardinia Club and no to marginal weight at Club Officer.
    • The portion of new expenditure not attributable to problem gambling is an economic benefit. The commission considered the estimated levels of new expenditure at Club Officer to be minor in the context of the Shire of Cardinia. There was no evidence of the proposed renovations at the Cardinia Club resulting in increased gaming expenditure.

Disbenefits

  • Gambling expenditure associated with problem gambling was given low to moderate weight.
    • The portion of new expenditure attributable to problem gambling is an economic disbenefit. Communities characterised by socio-economic disadvantage and greater vulnerability are more susceptible to the harms arising from problem gambling. The commission considered the Pakenham precinct generally, including the areas surrounding the gaming venues, shares characteristics with those that are overrepresented as problem gamblers. In addition, the commission was not satisfied the club appropriately implements procedures or strategies in line with best practice guidelines and RSG practices at both venues. This reinforces the potential risk of an increase in gaming expenditure associated with problem gambling.

Social impact benefits and disbenefits

In making the determination, the commission also weighed the following social impact benefits and disbenefits.

Benefits

  • Increased gaming opportunities for those who enjoy gaming was given no weight.
    • The additional machines at Club Officer will better serve the needs of gaming patrons by providing additional opportunities and choice. However, the commission considered the benefits to be negligible due to the current utilisation rates at the club and the current number of pokies in the Shire of Cardinia.
  • Improved facilities enabling a greater range of services was given no to marginal weight.
    • Improved facilities at the Cardinia Club will provide social benefits. However, these facilities are currently available at other venues in the Shire of Cardinia. The commission also noted renovations to the TAB will make this area more prominent and remove the use of the sports bar as a non-gambling area. There was no evidence of improved facilities at Club Officer.
  • The creation of community hubs at both gaming venues was given no weight.
    • Pakenham Racing Club stated it intended to create a designated community hub at both the Cardinia Club and Club Officer at a cost in excess of $5,000. The hub is designed to a multipurpose information centre, where patrons could discreetly obtain information on a range of services, including gambling-related matters. It would also provide a break out area for more detailed or confidential discussions, as part of the chaplaincy program. The commission noted that no evidence was provided on the comparative success of community hubs at other gaming venues.
  • The creation of chaplaincy services at both gaming venues was given marginal weight.
    • Pakenham Racing Club stated it intended to contribute $18,000 each year to facilitate a non-denominational chaplaincy service at the Cardinia Club and Club Officer. The service would be provided by Chaplains Without Borders to patrons and staff dealing with a range of issues, including gambling. While the commission accepted the chaplaincy service is a social benefit, it noted there is limited evidence on the success of this type of service at other venues and assigned it marginal weight.
  • Social benefit derived from increased community contributions was given no to marginal weight.
    • The positive social impact of community contributions is by improving the social fabric of the community in which they are made. Pakenham Racing Club proposed to increase community contributions from its Club Officer venue from $75,000 to $100,000 each year, with the contributions to be distributed to local sporting groups or clubs, local charities, local community organisations and local RSG providers. The commission considered the amount of additional community contributions was relatively small and would have a positive social benefit of no to marginal weight. The commission also noted there would no additional community contributions from the Cardinia Club venue.

Disbenefits

  • The possibility of an increased incidence and potential impact of problem gambling on the community (including family violence) was given low to moderate weight.
    • Wherever accessibility to pokies is increased, there is a risk of an increase in problem gambling, which leads to other costs such as adverse health outcomes, family breakdowns and other social costs. The commission considered the Pakenham precinct generally, including the areas surrounding the gaming venues, as a community characterised by socio-economic disadvantage and greater financial vulnerability, which makes them more susceptible to the harms arising from problem gambling. In addition, the commission noted the large number of pokies and long operating hours of the gaming room at the Cardinia Club, and was not satisfied the club appropriately implements procedures or strategies in line with best practice guidelines and RSG practices at both venues. This reinforces the potential risk of an increase in gaming expenditure associated with problem gambling.
  • Community attitude was given no to marginal weight.
    • Overall, the commission was satisfied that there is a negative attitude to this application in parts of the Shire of Cardinia. However, as only a small number of submissions were lodged by community members and no community consultation process was undertaken, the commission was not persuaded that the submissions lodged represent the views of the community in the Shire of Cardinia generally. The commission recognised the Council's role in representing the community interest and its objection to the application.

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