Commission refuses application for additional pokies at Lynbrook Hotel

On 12 and 13 July 2018, the Victorian Commission for Gambling and Liquor Regulation heard an application from Lynbrook Tavern Pty Ltd to increase the number of pokies at the Lynbrook Hotel in the City of Casey from 55 to 75.

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

The application was unusual in that the number of pokies attached to approved venues within the capped region of City of Casey is currently at capacity. Accordingly, the application was made in anticipation of one of the following events occurring before any additional pokies could operate at the hotel:

(a) additional entitlements are sourced from an existing venue with in the capped area;

(b) an increase is made to the cap that permits more pokies into the capped area; or

(c) the applicant may be able to source additional entitlements to commence in August 2022.

As a result of this, the commission noted there was an element of considerable uncertainty as to the timing of when any additional pokies could operate at the hotel following any approval of the application. In particular, there were two keys areas of evidence that were affected by this uncertainty:

(a) the catchment area of the hotel is an area exhibiting above average population growth and associated urban development, making an assessment of the socio-economic circumstances and financial vulnerability of the hotel's patrons difficult; and

(b) the amount and source of increased gaming expenditure was difficult to determine, due to the uncertainty of when the additional pokies would commence at the hotel and by which event above the entitlements would be obtained.

On 31 July 2018, the commission refused the application. The reasons for decision were published on 28 August 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 Casey community. Accordingly, the 'no net detriment' test was not met.

An increase in the number of pokies and an increase in patronage of existing facilities at the hotel can result in employment benefits. The application will result in the creation of 160 extra hours at the hotel., or five FTE positions, all involved in gaming operations. There is likely to be a level of transferred employment from nearby gaming venues, but not sufficient to completely offset the creation of the five FTE positions. While most of the current staff at the hotel are locals, it is uncertain that new staff would be residents of City of Casey. Consequently, while the additional employment is positive, the extent of the benefit is uncertain.

Benefits

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. The primary catchment area of the hotel shows a mixed level of socio-economic disadvantage and is anticipated to experience ongoing population growth and maturity. There is uncertainty regarding the socio-economic conditions of the catchment area at the time that additional pokies are made operational at the hotel, with recent trends indicating that the socio-economic conditions are declining. On the basis of an anticipated transfer rate of 40 per cent from other gaming venues in City of Casey, the extent of new expenditure at the hotel is expected to be moderate, although uncertain.

Increased gaming competition in City of Casey was given positive impact, with no to marginal weight.

• The commission found the application will increase gaming opportunities by providing an additional 20 pokies at which patrons may choose to play. However, there would likely be a marginal benefit due to the relatively small proportional increase in the number of pokies in City of Casey and the low utilisation rates currently experienced at the hotel.

Additional employment was given positive impact, with marginal weight.

• An increase in the number of pokies and an increase in patronage of existing facilities at the hotel can result in employment benefits. The application will result in the creation of 160 extra hours at the hotel., or five FTE positions, all involved in gaming operations. There is likely to be a level of transferred employment from nearby gaming venues, but not sufficient to completely offset the creation of the five FTE positions. While most of the current staff at the hotel are locals, it is uncertain that new staff would be residents of City of Casey. Consequently, while the additional employment is positive, the extent of the benefit is uncertain.

Supply contracts was given positive impact, with no weight.

• No evidence was presented that increased supply contracts would result in an increase in the number of supply contracts for food, beverage and other services from suppliers in City of Casey.

Complementary expenditure was given positive impact, with no weight.

• No direct evidence was presented that the additional pokies would increase the appeal of the hotel so as to attract more local patrons and visitors. Even if increased patronage is anticipated, there is significant uncertainty of how this increase would generate increased economic activity within the local area (as opposed to transferred activity within City of Casey).

Increased state government revenue was given positive impact, with no weight.

• There is economic benefit of increased state government revenue from the taxation generated by increased expenditure on the additional 20 pokies. However, any increase in government revenue is likely to be split across all Victorian municipalities. There was a lack of evidence presented as to the direct impact on City of Casey and the commission placed no weight on this impact.

Disbenefits

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

• The portion of new gaming expenditure attributable to problem gambling is an economic disbenefit. The catchment area of the hotel exhibits above average levels of socio-economic disadvantage as compared to City of Casey as a whole, indicating that the residents in the catchment area are more vulnerable to gambling-related harms. While the facilities at the hotel have been improved by the installation of the screen and opaque window coverings, the overall RSG practices of the venue operator do not demonstrate a robust commitment to RSG best practice to prevent or effectively mitigate the potential increase in risks and therefore increased harm associated with problem gambling.

Diversion of trade from retail facilities was given negative impact, with no to marginal weight.

• The commission noted that the extent of any revenue lost by retail facilities in the local area would be difficult to determine. The commission found that the dispersed nature of any diverted trade is unlikely to have more than a marginal impact on retail facilities within City of Casey.

Diversion of trade from other gaming venues was given negative impact, with no to marginal weight.

• The commission noted an anticipated transfer rate of 40 per cent in gaming expenditure is expected to be spread across a number of existing gaming venues within City of Casey. As there is uncertainty around the source of entitlements for any pokies increase at the hotel, there is also a high level of uncertainty of the impact of any diversion of trade from other gaming venues. Regardless of source, any diversion of trade is likely to be dispersed to such an extent that it is unlikely to significantly impact any one gaming venue.

The application will increase gaming opportunities by providing an additional 20 pokies at which patrons may choose to play. However, there will be negligible benefit due to number of pokies currently at the hotel and at the 12 other gaming venues in City of Casey, as well as the low utilisation rate of the existing pokies at the hotel.

Benefits

Increased gaming opportunities for those who enjoy gaming was given positive impact, with no to marginal weight.

• The application will increase gaming opportunities by providing an additional 20 pokies at which patrons may choose to play. However, there will be negligible benefit due to number of pokies currently at the hotel and at the 12 other gaming venues in City of Casey, as well as the low utilisation rate of the existing pokies at the hotel.

Increased community contributions was given positive impact, with marginal weight.

• The venue operator proposed additional contributions of $25,000 per year to a range of community, sporting and support services groups in the Lynbrook community. These contributions, to be distributed in accordance with conditions of any approval, will have a positive economic and social impact on community groups operating in Lynbrook and across City of Casey.

Disbenefits

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

• A proportion of total gaming expenditure at the hotel will be associated with problem gambling contributed by a small proportion of total gaming patrons at the hotel. Adverse impacts include health, jobs, finances, emotional states and relationships. The area surrounding the hotel is generally an area of moderate relative socio-economic disadvantage, and the patronage of the hotel (particularly those attending the hotel after 11pm) exhibits an above average propensity for problem gambling. Granting the application has the potential to increase the incidence and impact of problem gambling in City of Casey to a moderate extent, taking into account the expected increase in new gambling expenditure, the existing level of gaming available at the hotel, socio-economic vulnerability of gaming patrons, and the current RSG practices of the hotel management.

Community attitude was given negative impact with marginal weight.

• The commission took into account the council's intended role in which it represents the community interest, submissions from two neighbouring municipal councils and submissions from individuals and community organisations from City of Casey. Overall there was a general negative attitude towards the application from within the community of Casey.

Read the decision - EGM increase - Lynbrook Tavern Pty Ltd.

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