Commission grants application for additional 17 pokies at Powell Hotel

On 17 August 2018, the Victorian Commission for Gambling and Liquor Regulation heard an application from Castello Powell Hotel Pty Ltd to increase the number of pokies at the Powell Hotel in the City of Maribyrnong from 30 to 47.

The City of Maribyrnong opposed the application.

On 3 September 2018, the commission granted the application with conditions. The reasons for decision were published on 18 October 2018.

The commission found the social and economic impact to the wellbeing of the Maribyrnong community if the application was approved will be neutral, and hence the 'no net detriment' test was met.

The commission approval is subject to the following conditions:

• the hotel must make cash community contributions of $75,000 each year for as long as the additional 17 pokies are in operation
• the contributions must be made by quarterly payments of $18,750
• the contributions must be made to not-for-profit community groups and sporting organisations providing services and facilities to residents in the City of Maribyrnong
• the hotel must distribute half the contributions and will provide the other half to the Maribyrnong City Council for distribution (if the council is willing to participate)
• the hotel must provide evidence of each payment to the VCGLR as soon as practicable after each quarterly payment is made
• if the contributions are not made as required, operation of the additional 17 pokies must cease immediately and for as long as the contributions remain outstanding
• proposed building renovation works, being the refurbishment of the bistro, internal painting, internal flooring, upgrade to bistro entry, upgraded internal lighting and security cameras, upgrades to internal furniture and screening in the gaming lounge, must be substantially completed within 12 months of approval of the application
• the commission may extend the time for completion of the building works. If an extension is granted, the commission may require that any 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 by way of investment in renovations of the venue was given positive impact. with marginal weight.

• Building renovations valued at $500,000 will be undertaken to the bistro, kitchen and gaming lounge. The building works will be undertaken "in-house" by the Castello Group and substantially completed within 12 months.

Additional employment was given positive impact, with marginal weight.

• The commission was satisfied approval of the application will result in 4-5 full-time equivalent (FTE) positions being created in the gaming room and a further 5-10 staff employed in the hotel as a result of the refurbishment.

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 additional 17 pokies are estimated to result in increased gaming expenditure of $2.5 million, with 79 per cent transferred from other gaming venues. New gaming expenditure is estimated as $532,000.

Increased gaming competition was given positive impact, with marginal weight.

• The commission considered the additional 17 pokies at the hotel will result in increased gaming competition in the City of Maribyrnong, due to the increased venue attractiveness, the high transferred expenditure, the nine surrounding gaming venues, and the already mature gaming market in the area.

Disbenefits

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

• The social and economic profile of the surrounding area shows disadvantage on a mumber of metrics but the area is undergoing substantial gentrification. There are pockets of disadvantage close to the hotel, but this is balanced against the improvements in SEIFA rankings, which is anticipated to continue. Evidence shows a number of factors which will help minimise this disbenefit, namely; strong policies and proactivity in RSG, the removal of the bottle shop to improve access to the venue without having to enter via the gaming room, improvements to the gaming room including better screening and the removal of the ATM from the entrance lobby to the sports bar, and provision of a dedicated floor walker.

Diversion of trade from other gaming venues and non-gaming venues was given negative impact, with no weight.

• While it is estimated that 79 per cent of the increased gaming expenditure will be transferred expenditure from surrounding venues, it is anticipated that no single venue will experience a decline of greater than five per cent.

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 nil to marginal weight.

• The additional pokies will better serve the needs of patrons by providing additional opportunities and choice for those who choose to play gaming machines. While the additional pokies are not required to meet demand, the commission accepted evidence that 47 pokies provide the gaming options wanted by patrons.

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

• There will be an improvement in the public amenity of the hotel through better food offerings and a more modern appearance of the gaming room and bistro. However, the commission noted the renovation works involve improvements to the hotel rather than an extension of the services offered.

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

• Annual cash community contributions of $75,000 will be made to local community groups, sporting clubs and schools.

Disbenefits

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

• Wherever accessibility to pokies is increased, there is always a risk of an increase in problem gambling and gambling-related harms, which may lead to other costs such as adverse health outcomes, relationship breakdowns, emotional harms and other social costs. The commission accepted that a proportion of the new expenditure at the hotel will be associated with problem gambling. The hotel has good RSG policies, there will be improved access to the hotel that does not involve walking through the gaming room, there will be a dedicated floor-walker at all times, and the EFTPOS facility at the entrance to the gaming room will be relocated. The commission considers the risk of increased incidence of gambling-related harm is mitigated by the good RSG practices at the hotel.

Community attitude was given negative impact, with marginal weight.

• Maribyrnong City Council, Health West, Women's Health West, the North Western Melbourne Primary Health Network, Young Leaders of the West and forty-one individual members of the public made submissions opposing the application. Most of the objections articulated a negative attitude to pokies generally rather than identifying harm arising out of this particular application. None of the objectors appeared at the hearing.

Read the gaming decision - EGM increase - Castello Powell Hotel Pty Ltd.

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