Commission grants application for additional 10 pokies at Berwick Springs Hotel

On 29 August 2017, the Victorian Commission for Gambling and Liquor Regulation heard an application from Zagame's Berwick Springs Hotel Pty Ltd to increase the number of pokies at the Berwick Springs Hotel in the City of Casey from 95 to 105.

The City of Casey opposed the application and appeared at the hearing.

On 2 October 2017, the commission granted the application.

The commission found there would be a slightly positive social and economic impact on the wellbeing of the Casey community if the application was approved, and hence the 'no-net detriment' test was met.

The commission's approval is subject to the following conditions:

• Berwick Springs Hotel will make an annual cash contribution of $25,000 (indexed each year by CPI All Groups Melbourne) so long as the additional 10 pokies operate at the hotel up to 15 August 2032. These contributions will be allocated to not-for-profit community and sporting organisations providing services and facilities to residents in the City of Casey, and are additional to existing contributions made by the Berwick Springs Hotel Community Fund
• upgrade works at the hotel must be substantially completed within two years after the commencement of the operation of the additional 10 pokies. If the upgrade works are not substantially completed within two years, the approval for the additional 10 pokies will lapse
• suitable screening must be installed to limit the visibility of the gaming room from the entry to the bistro.

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

Benefits

Expenditure on capital works was given marginal weight.Gaming expenditure not associated with problem gambling was given marginal weight.Increased gaming competition in Casey was given no weight.Additional employment was given no weight and marginal weight.Complementary expenditure was given marginal weight.

• Renovations to the hotel, at an estimated cost of $2.3 million to $2.6 million, are to be made. However, there is some uncertainty of what proportion of this expenditure will be spent on labour, materials, goods and services in the City of Casey.
• The portion of new expenditure not attributable to problem gambling is an economic benefit. As the anticipated transfer rate of gaming expenditure is 75 per cent, the extent of new expenditure at the hotel is expected to be moderate. In addition, the hotel is located in an area of lower relative socio-economic disadvantage, although with some vulnerability to financial stress.
• While the application will increase gaming competition by providing an additional 10 pokies for patrons to choose, it will be of limited benefit as there are already 95 pokies operating at the hotel, and a total of 903 pokies at 13 venues in Casey.
• The short-term employment benefits associated with renovations to the hotel was given no weight as there was no evidence of benefits to Casey. The longer term employment benefits was given marginal weight. Although five full-time equivalent positions will be created at the hotel, this is balanced against the transfer of employment from other businesses in Casey.
• Complementary expenditure, in the form of bistro meals and drinks in the sports bar, was estimated to increase by $509,066 in the first year of the additional pokies being installed. However, there was limited evidence of how this would increase the number of supply contracts for food and beverage from suppliers in Casey.

Disbenefits

Diversion of trade from retail facilities was given marginal weight.Diversion of trade from other gaming venues was given marginal weight.Gaming expenditure associated with problem gambling was given marginal to low weight.

• The maximum impact to new expenditure in Casey was estimated to be $393,665 each year. However, any diversion of trade would be dispersed and is unlikely to significantly impact any one retailer.
• The anticipated transfer rate of 75 per cent is expected to be spread across a number of existing gaming venues both within and outside Casey. Therefore, any diversion of trade would be dispersed and is unlikely to significantly impact any one gaming venue.
• The portion of new gambling expenditure attributable to problem gambling is an economic disbenefit. Residents of Casey have a low level of relative disadvantage and financial vulnerability that would make them less susceptible to gambling-related harms. The area around the hotel exhibits a low level of disadvantage and the hotel proposes to implement a number of measures in relation to responsible service of gaming (RSG).

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

Benefits

Improved facilities enabling a greater range of services was given marginal to low weight.Increased gaming opportunities for those who enjoy gaming was given no weight.Social benefit derived from community contributions was given marginal weight.Social benefit derived from additional employment was given no weight.Social benefit derived from the creation of the Community Service Booth was given no weight.

• The service offer at the hotel is already extensive and the impact of the expansion to the service offer would be small. Other than the addition of the function facilities, the renovations will provide an improvement to the existing hospitality facilities at the hotel, rather than adding new ones.
• The increase of 10 pokies will provide negligible benefit as the hotel already has 95 pokies, and there are a total of 903 pokies at 13 venues in Casey.
• The hotel will make an additional donation of $25,000 each year to a range of community and sporting groups in Casey. The distribution of these contributions will have a positive social impact on community and social groups operating in Casey.
• Additional employment at the hotel was considered as an economic benefit.
• The proposed renovations to the hotel include the construction of a Community Service Booth (CSB) at an estimated cost of $40,000. The CSB would be a discrete place at the entrance to the gaming room where patrons could access gambling and alcohol help information, use internet and telephone services, and access general community service information. The commission considered the CSB is likely to proceed regardless of the outcome of the application, and the benefits have been considered as an economic benefit.

Disbenefits

The possibility of increased incidence and the potential impact of problem gambling on the community (including family violence) was given marginal to low weight.Community attitude was given no to marginal weight.An increased exposure of children to gambling activity was given no weight.

• A proportion of total gambling expenditure at the hotel will be associated with problem gambling contributed by a small proportion of total gaming patrons. This can have adverse impacts on health, jobs, finances, emotional states and relationships. The public health approach to problem gambling, including 'burden of harm' research in the gambling context, is in its infancy. While new research indicates a correlation between pokies density and family violence, there is a lack of evidence of causality of family violence due to pokies density. While the City of Casey has high family violence statistics and a significant increase in recent years, the above average population growth in the area is likely to be a contributing factor to the overall increases in incidents. The area around the hotel exhibits lower levels of socio-economic disadvantage compared to Casey as a whole, and the social disbenefit associated with problem gambling as a result of this application is considered a low risk.
• The commission considered the Council's intended role in representing the community interest and submissions from community members. The commission noted the relatively low response rate to the Council's survey, the high proportion of those expressing opposition to gaming in general rather than the application, and the high proportion of responses to the survey who did not disclose a connection with Berwick or the City of Casey.
• The hotel is marketed as a family-friendly venue. One of the hotel entrances allows families to pass in close proximity to the entrance to the gaming room, which may result in children being exposed to the sight and sounds of pokies in the gaming room. As the entrances and location of the gaming room are not proposed to change with the renovations, the impact on children does not affect the 'no net detriment' test, However, although the commission gave this disbenefit no weight in its determination, it has imposed a condition of its approval that suitable screening be installed at the gaming room entrance.

• Read Gaming decision – EGM increase – Zagame's Berwick Springs Hotel Pty Ltd
• See our infographic on the City of Casey and compare its pokies statistics with other councils across Victoria.