Commission grants application for additional seven pokies at Leopold Sportsman's Club

On 4 September 2018, the Victorian Commission for Gambling and Liquor Regulation heard an application from Leopold Sportsman's Club Inc to increase the number of pokies at the Leopold Sportsman's Club in the City of Greater Geelong from 35 to 42.

The City of Greater Geelong opposed the application but did not attend the hearing.

On 21 September, the commission granted the application with conditions. The reasons for decision were published on 8 October 2018.

The commission found the social and economic impact to the wellbeing of the City of Greater Geelong community if the application was approved will be slightly positive, and hence the 'no net detriment' test was met.

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

• the club must make annual cash contributions of $17,000 (increased each year by the increase in CPI) for as long as any of the additional seven pokies are in operation
• these cash contributions must be allocated each year to not-for-profit community and sporting organisations providing services and facilities to residents in the City of Greater Geelong
• the club must continue to pay existing annual cash contributions of $53,000 to not-for-profit community and sporting groups in the City of Greater Geelong
• building renovation works must be substantially completed within 24 months of the additional seven pokies commencing operation at the hotel
• if the building renovation works are not substantially completed on time, the commission may extend the time for completion. If an extension is granted, the commission may require that any of the additional pokies cease operation during the period of the extension.

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

Benefits

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

• The club will spend $2 million in the next two years on various renovations and improvements to the venue. However, as some of these capital works would have been completed regardless of the application being approved, this benefit was given only marginal weight.

Community contributions was given positive impact, with marginal weight.

• The club will increase its cash community contributions each year by $17,000 from $53,000 to $70,000. The club will continue to make its in-kind community contributions.

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

• The portion of new expenditure not attributable to problem gambling is an economic benefit. It is estimated the gross gaming expenditure at the club will increase by between $102,000 - $125,000 in the first year after the seven additional pokies become operational and this will increase to $250,000 in the second year when the building renovations are completed. It is anticipated that 35 per cent of this additional expenditure will be transferred from a number of existing gaming venues in Greater Geelong. The club is located in an area of mixed yet overall below average relative socio-economic disadvantage compared to other areas of Greater Geelong and the commission gave this benefit marginal weight.

Increased gaming competition in the City of Greater Geelong was given positive impact, with nil to marginal weight.

• Similar applications would normally increase gaming competition by providing more pokies, and possibly a wider variety of types of machines and games for patrons to choose to play. In this case, there is likely to be nil to marginal benefit due to the relatively small proportional increase in the number of pokies in Greater Geelong.

Additional employment was given positive impact, with marginal weight.

• There will be the equivalent of eight full-time positions created at the club when the seven additional pokies become operational, while a further 3.5 full-time equivalent positions will be created after the building renovation works are completed. However, there will be no increase in gaming machine staff. It is likely that most of these new positions will be filled by residents of Greater Geelong which will be a positive benefit to the municipality. The commission noted the low level of expected transferred expenditure from other gaming venues in Greater Geelong. As a result, it is likley that much of the additional employment will be new rather than transferred from nearby venues.

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

• No direct evidence was presented that increased supply contracts would result in a benefit to the local community, despite an assertion that 60 per cent of new supply contracts would derive from Greater Geelong. While some evidence was presented that the additional pokies and building renovation works will make the venue more attractive, the increase in demand for associated food and beverage services was not able to be quantified.

Disbenefits

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

• The portion of new gaming expenditure attributable to problem gambling is an economic disbenefit. The commission found the catchment area of the club exhibits numerous indicators that show it is better placed to deal with the harms associated with problem gambling. It is an area with lower than average levels of socio-economic disdavantage compared with Greater Geelong as a whole, indicating that the residents in the catchment area have a lower level of financial vulnerability which would make them more vulnerable to gambling-related harms. The commission also found that the level of new anticipated expenditure is moderate and the club's RSG practices provide further protection against the harms associated with problem gambling.

Diversion of trade from other gaming venues and retail facilities was given negative impact, with nil to marginal weight.

• The anticipated gaming expenditure transfer rate of 35 per cent is expected to be spread across existing gaming venues within Greater Geelong, with one competitor venue located five kilometres from the club and a further seven competitor venues located within 10 kilometres. Due to the low level of transferred expenditure, the additional seven pokies is likely to have minimal impact on other gaming venues. Similarly, the relatively low amount of new gaming expenditure is likely to cause negligible economic disbenefit to retail facilities in Greater Geelong.

Alteration to taxation paid was given negative impact, with no weight.

• Any difference to tax paid to the government as a result of the application is not a relevant consideration and the commission did not afford any weight to this factor.

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

Benefits

Improved facilities enabling a greater range of services was given positive impact, with marginal weight.

• The building renovation works will result in new non-gaming services at the club that are not currently on offer. These will include a new alfresco dining area, new kitchen, new bar and new uses for the squash court. These improved facilities were given marginal weight by the commision, as it considered some of these new services would have been available after five years, regardless of the outcome of the application.

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

• The additional seven pokies will increase gaming opportunities by providing patrons with more machines that they can choose to play. However, the commission gave this benefit nil to marginal weight as the increase is a modest amount and the current utilisation rates at the club indicate that demand for gaming is being met most of the time.

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

• There will be an increase of $17,000 each year in cash contributions to a range of community, sporting and support services groups in Leopold and the City of Greater Geelong. These contributions will have a positive social impact on community groups operating in Leopold and across Greater Geelong.

Disbenefits

Possibility of an increased incidence and the potential impact of problem gambling on the community (including family violence) was given negative impact, with marginal weight.

• A proportion of total gaming expenditure at the club will be associated with problem gambling contributed by a small proportion of total gaming patrons at the club. Adverse impacts include health, jobs, finances, emotional states and relationships. While the area surrounding the club is generally of low to moderate relative socio-economic disadvantage, the patronage of the club exhibits an above average resilience for dealing with the harms of problem gambling. The commission considered the additional seven pokies have the potential to increase the incidence and impact of problem gambling in Greater Geelong but only to a minimal extent. This is due to the expected low increase in new gambling expenditure, the existing level of gaming available at the club, the socio-economic resilience of gaming patrons, and the current RSG practices of the club management.

Community attitude was given negative impact, with marginal weight.

• The commission took into acount council's intended role in which it represents the community interest, as well as submissions from six individuals residing in Greater Geelong. The commission accepted that there was some negative community attitude towards the application. However, the commission considered that the negative attitude from residential objectors was not specifically linked to the application but reflected a more general apprehension regarding pokies. The commission noted the council's specific concerns regarding the visibility of the gaming room from the bistro had been addressed by the club installing suitable screening.

Read the gaming decision - EGM increase - Leopold Sportsman's Club Inc

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