Commission refuses application for additional pokies at Polish Community Association in Geelong

On 26, 27 and 28 February 2019, the Victorian Commission for Gambling and Liquor Regulation heard an application from the Polish Community Association in Geelong Inc to increase the number of pokies at White Eagle House from 35 to 78.

The City of Greater Geelong opposed the application and appeared at the hearing.

On 12 April 2019, the commission refused the application. The reasons for decision were published on 26 April 2019.

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 Greater Geelong 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

Expenditure on development works was given positive impact, with low weight.

• The club proposed to undertake development works at its club premises in three stages. Stage 1 involves an an upgrade to the soccer change room facilities and was estimated to cost $170,000. This stage was expected to take up to one year to complete and would follow the immediate installation of 15 additional pokies in the gaming room. Stage 2 involves enhancing the hospitality offer at the club premises by moving the bistro area to the existing members' bar and installing an outdoor area on the west side of the new bistro overlooking the soccer pitch, installing a new children's playroom between the bistro and the function room, refurbishing and extending the gaming room, installing a new entry and lobby, office, community rooms and alfresco areas, and renovating the old bistro as a new members' area. Stage 2 was estimated to cost $2.75 million and take up to two years to complete. Stage 3 involves enhancing the quality of the soccer playing surface of the main pitch with a synthetic surface. This stage was expected to cost $1.75 million and take up to four years to complete.

Additional employment was given positive impact, with no to marginal weight.

• The commission noted there was a lack of evidence on the expected short term benefits for the City of Greater Geelong associated with the proposed development works. As no evidence was given that local builders would carry out the works, the commission gave this benefit no weight. In relation to long term employment benefits, the club estimated an additional 9.25 equivalent full time (EFT) positions would result from the installation of the additional 43 pokies - an additional 5.5 EFT positions in the bistro and kitchen, and an additional 3.75 EFT positions in the bar and gaming room. While the commission regarded the additional employment as a positive impact, it noted an external caterer manages the bistro and kitchen operations. As a result, the club cannot guarantee the additional 5.5 EFT positions will be filled by locals from Greater Geelong. In addition, the commission considered there was some uncertainty surrounding when and how many additional bar and gaming room staff would be employed at which stage of the works. As there was no evidence of any trigger points or milestones by which the additional employment would commence, the commission gave this economic benefit no to marginal weight.

Community contributions was given positive impact.

• The commission noted that impacts of community contributions can be considered on the economic side or the social side, or both, so long as they are included and not double-counted in the ultimate composite test. In this application, the commission determined to consider the community contributions impacts as a single impact under the 'Social Impacts' section (see below).

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

• The commission considered there would be no substantial increase in gaming competition in Greater Geelong, due to the current density of pokies in the LGA. There are already 1,467 pokies over 28 gaming venues within Greater Geelong (together with the Borough of Queenscliffe) and pokies density stands at 6.8 pokies per 1,000 adults, 25.2 per cent more than the Victorian average. Within the 2.5km radius of the club, there are currently 296 pokies at five venues (including the 35 pokies currently operated by the Polish Community Association) which equates to a density of 8.38 pokies per 1,000 adults.

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

• No evidence or figures were given in relation to the economic benefit associated with supply contracts or complementary expenditure. and the commission considered there was insufficient evidence on these impacts. Even if patronage at the club increased with the installation of the additional 43 pokies, and this resulted in increased supply contracts and/or complementary expenditure, there was significant uncertainty that any such increase would generate increased economic activity within the local area as opposed to transferred activity within Greater Geelong.

Gaming expenditure not associated with problem gambling was given positive impact, with no to marginal weight.

• The portion of new expenditure not attributable to problem gambling is an economic benefit. The commission considered evidence that the additional 43 pokies would yield additional gross gaming expenditure at the club of $800,000 per year, with 80 per cent of this expenditure transferred from other venues within Greater Geelong. This would result in new expenditure of $160,000 at the venue. The majority of gaming patrons at the venue come from nearby suburbs that are relatively disadvantaged , including four suburbs that are significantly disadvantaged: Newcomb - Moolap, South Geelong - Thomson, Breakwater and Whittington. The commission considered that portions of new expenditure at the club would likely be associated with problem gambling, reducing the economic benefit of the new expenditure, and attributed no to marginal weight to this benefit.

Disbenefits

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

• The portion of new expenditure attributable to problem gambling is an economic disbenefit. The commission found the SEIFA indices indicate the venue is located in a highly disadvantaged area and the majority of gaming patrons have a level of socio-economic disadvantage and financial vulnerability that would make them more susceptible to gambling-related harms. Four of the surrounding suburbs are considered to be significantly disadvantaged. The commission considered there was a lack of evidence from the club to demonstrate that a plan or strategy had been put in place to address the additional risks arising from an uplift in pokies from 35 to 78. There was also a lack of evidence as to when and how many additional gaming staff members would be employed, and the proposed gaming room layout to address the increased risk of problem gambling arising from the installation of the additional 43 pokies. The commission gave this negative impact low to moderate weight.

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

• It was estimated gaming expenditure at the club would increase by $800,000 per year following the installation of the additional 43 pokies, with 80 per cent of this revenue being transferred from other gaming venues with the City of Greater Geelong. The closest venue, Buckley's, is likley to be the most impacted. The commission accepted that there may be some detrimental impact on other venues, in particular Buckley's, as a result of transferred expenditure but considered the expected impact of revenue losses would not be significant.

Diversion of trade from non-gaming businesses was given negative impact, with no to marginal weight.

• The additional 43 pokies will result in an expected increase of $160,000 in gaming expenditure. There is also the potential for an increase in other expenditure, such as meals and drinks, with more people coming to the club to gamble and spend on associated items. While the commission found that there is an economic disbenefit associated with any diversion of trade from retail facilities or other businesses in Greater Geelong, it was difficult to confirm whether new expenditure at the club would necessarily have been spent elsewhere in the LGA. As such, the commission gave this impact no to marginal weight.

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

Benefits

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

• The additional 43 pokies would better serve the needs of gaming patrons by providing additional opportunities and choice for those who choose to play pokies. As there are currently 296 pokies at five gaming venues within the immediate surrounding 2.5km area from the club premises, the commission considered this to be a negligible postive social benefit to the City of Greater Geelong and gave it marginal weight.

Social benefit derived from increased community contributions was given positive impact, with no to marginal weight.

• The positive social impact of community contributions is by improving the social fabric of the community in which the contributions are made. The club advised it would be able to maintain the current considerable community contributions it already makes if the additional 43 pokies were installed. However, there was no condition for the club to increase its community contributions either in cash or in-kind. The club stated it would contribute to the community by investing in sporting facilities, such as the proposed upgrades to the soccer change room facilities and the improvements to the surface of the main soccer pitch. This would help address the need for new and improved soccer facilities in Greater Geelong to meet the projected growth in female and junior soccer participation in the area. The Council noted there was a lack of evidence to demonstrate that these new and improved soccer facilities would be used by persons other than the club's members or members of the Breakwater Eagles Soccer Club (who currently use the facilities). The commission considered these new and improved facilities as in-kind contributions, but the lack of sufficient detail on who would use these facilities, meant the commission gave this social benefit no to marginal weight.

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

• There are social benefits arising from the community's access to and use of improved facilities resulting from the additional pokies. However, the commission accepted that the refurbished club premises would not provide facilities that are not currently available elsewhere in Greater Geelong. The commission also considered there was a lack of sufficient detail of how the improved soccer pitch and change rooms would be used by people other than the club's members or Breakwater Eagles Soccer Club members.

Disbenefits

Possibility of an increased incidence and potential impact of problem gambling on the community was given negative impact, with 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 relied on the evidence considered in relation to the economic impact of problem gambling on the community (see above), which equally applies to the social impact of problem gambling. The commission noted the venue is located in an area of Greater Geelong which has an elevated level of disadvantage and considered it appropriate to attribute moderate weight to this negative social impact.

Community attitude was given negative impact, with marginal to low weight.

• Based on the submissions received, the commission considered that, while some portions of the community were in support of the application, there is a negative attitude in other portions of the Greater Geelong community. Submissions from local community organisations indicated a level of concern regarding the potential impact of the additional 43 pokies on the local community. The commission noted the City of Greater Geelong, in its role of representing the community interest, made a submission opposing the application and appeared at the hearing. The commission gave marginal to low weight to this negative impact.

Read the gaming decision - EGM increase - Polish Community Association in Geelong Inc

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