Commission refuses application for additional pokies at Altona RSL

On 7 and 8 November 2018, the Victorian Commission for Gambling and Liquor Regulation heard an application from Altona RSL Sub-Branch Inc to increase the number of pokies at the Altona RSL from 58 to 80.

The City of Hobsons Bay opposed the application and appeared at the hearing.

On 4 December 2018, the commission refused the application. The reasons for decision were published on 20 December 2018.

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 well-being of the Hobsons Bay community. Accordingly, the 'no net detriment' test was not met and the application was refused.

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

Benefits

Gaming expenditure not associated with problem gambling was given positive impact, with nil to marginal weight.

• It was estimated that gaming expenditure at the venue will increase by $3.5 million in the first year of the additional 22 pokies being installed, with 88 per cent of the expenditure transferred from other gaming venues in City of Hobsons Bay. This would result in new expenditure of $413,996 in the first 12 months. The portion of new expenditure not attributable to problem gambling is an economic benefit. The catchment area of the club shows mixed relative socio-economic disadvantage. However, the commission considered that the patrons of the club include disadvantaged elderly Altona residents, the additional pokies will expand the club from a medium to a large venue, the club is located in a convenient location and past RSG practices at the club have not been robust. As a result, the commission gave this economic benefit nil to marginal weight.

Expenditure on capital works was given positive impact, with marginal weight.

• The club proposes to undertake renovations to the venue of $4.7 million if the additional 22 pokies are installed. Local and state-wide contractors will be invited to tender for the building works, but there is no guarantee that a local tenderer from City of Hobsons Bay will be successful.

Increased gaming competition in the City of Hobsons Bay was given positive impact, with marginal weight.

• The additional 22 pokies will result in a 4.1 per cent increase in the number of pokies in the City of Hobsons Bay from 535 to 557 and a 0.9 per cent increase in expenditure from $633 to $638 per adult. The commission considered this represents a negligible increase and noted the gaming room at the club is seldom at peak usage and the existing 58 pokies meet demand from gaming patrons.

Additional employment was given positive impact, with marginal weight.

• The additional 22 pokies may result in long term employment benefits due to increased patronage of the facilities at the club. The commission was satisfied 4 full time equivalent (FTE) positions would be created at the club and are likely to be filled by local residents. However, the commission considered there was not enough evidence to suggest the 4 additional positions would not be offset by job losses at other gaming venues in the City of Hobsons Bay.

Supply contracts and complementary expenditure was given positive impact, with no weight.

• No evidence or figures were given in relation to the economic impact associated with supply contracts or complementary expenditure. The commission noted observations by the Council expert that complementary expenditure, such as food and drink sales, would likely be transferred from other venues in City of Hobsons Bay and gave this benefit no weight.

Disbenefits

Gaming expenditure associated with problem gambling was given negative impact, with marginal to low weight.

• The portion of new expenditure attributable to problem gambling is an economic disbenefit. The club is located in a catchment area of mixed relative socio-economic disadvantage. However, patronage by disadvantaged elderly Altona residents, the expansion of the club from a medium to a large gaming venue, the convenient location of the club, the high concentration of gaming in City of Hobsons Bay and the less than robust RSG practices at the venue indicate that local residents have a level of vulnerability that may increase the incidence and potential impact on problem gambling in the community. While the club proposed to improve RSG at the venue, past non-compliance did not inspire confidence in its capacity to effectively mitigate the potential increase in risks and increased harm associated with problem gambling.

Diversion of trade from other gaming facilities was given negative impact, with marginal weight.

• The anticipated transfer rate of 88 per cent is expected to be spread across existing gaming venues within City of Hobsons Bay and, to a lesser extent, the City of Wyndham. Three venues in particular are likely to experience significant losses in revenue if the additional 22 pokies were installed - Altona Bowling Club (- 17.15%), Altona Sports Club (- 14.27%) and Kooringal Golf Club (- 15.88%). The commission considered that a transfer rate of this size is significant and will result in serious loss of revenue at these three clubs.

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

Benefits

Additional and improved services and facilities at the Altona RSL was given positive impact, with marginal weight.

• Social benefits that may be associated with the renovation works include the addition of a new cafe and children's play area which do not currently exist at the club. Further social benefits will result from the refurbishment of the existing facilities at the club, which have not been updated since 1996. The commission considered these improvements may not be completed for at least five years, as planning permission has not yet been granted, and gave this benefit marginal weight.

Increased gaming opportunities for those who enjoy gaming was given positive impact, with nil to marginal weight.

• The application will increase gaming opportunities by providing an additional 22 pokies at which patrons may choose to play. The commission considered this will provide only marginal benefit due to the number of pokies already at the club and at the other nine gaming venues within the City of Hobsons Bay, as well as the current utilisation rates of existing pokies at the club which rarely reach peak capacity.

Social benefit derived from increased community contributions was given positive impact, with marginal weight.

• Additional community cash contributions of $20,000 per year will be distributed to local sporting groups and non-profit organisations, with 10 per cent to be assigned to problem gambling service providers. These contributions are in addition to the cash and in-kind contributions made by the club. The commission found the additional contribution of $20,000 per year is small within the context of City of Hobsons Bay and considered it to be a small positive benefit with marginal weight.

Disbenefits

Possibility of an increased incidence and potential impact of problem gambling on the community was given negative impact, with low to moderate weight.

• A proportion of total gaming expenditure at the club will be associated with problem gambling. Adverse impacts relating to problem gambling include health, jobs, finances, emotional states and relationships. Accordingly, a portion of the $413,996 of new expenditure on the pokies in the first year will be associated with problem gambling, including all PGSI risk categories. The club is located in a catchment area of mixed relative socio-economic disadvantage. However, patronage by disadvantaged elderly Altona residents, the expansion of the club from a medium to a large gaming venue, the convenient location of the club, the high concentration of gaming in Hobsons Bay and the less than robust RSG practices at the venue indicate that local residents have a level of vulnerability that may increase the incidence and potential impact on problem gambling in the community.

Community attitude was given negative impact, with marginal weight.

• The commission considered the City of Hobsons Bay, in its role of representing the community interest, made a submission opposing the application and appeared at the hearing. The commission also considered a submission from the neighbouring City of Wyndham, as well as submissions from 19 individuals and six community organisations raising relevant concerns. Overall, the commission found some negative attitude to the additional pokies from within the community of Hobsons Bay.

Read the gaming decision - EGM increase - Altona RSL Sub-branch Inc

See our infographic on the City of Hobsons Bay and compare pokies statistics with other councils across Victoria.