Commission grants application for additional 15 pokies at Torquay Hotel

On 7 June 2018, the Victorian Commission for Gambling and Liquor Regulation heard an application from TTHL Pty Ltd to increase the number of pokies at the Torquay Hotel in the Shire of Surf Coast from 30 to 45.

Shire of Surf Coast did not support the application.

On 26 June 2018, the commission granted the application. The reasons for decision were published on 19 July 2018.

The commission found the social and economic impact to the wellbeing of the Surf Coast 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:

• building renovation works must be substantially completed within two years of the additional 15 pokies commencing operation at the hotel
• 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
• the hotel must continue to make to make cash and/or in-kind community contributions of $25,000 per year, in line with a commitment made in 2013 when an additional 15 pokies were approved at the hotel
• the hotel must make additional cash contributions of $30,000 per year for as long as these additional 15 pokies are in operation at the hotel
• the total contributions of $55,000 per year must be made to not-for-profit community and sporting organisations in the Shire of Surf Coast
• if the contributions are not allocated in full each year as required, the additional 30 pokies must cease operation immediately until the outstanding contribution amounts are made.

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.

• It is proposed to undertake renovations at the hotel with a committed spend of at least $600,000. A proportion of the renovation expenditure will occur within the Shire of Surf Coast. However, the commission reduced the weight attached to these works, as $310,000 of the works was previously offered by the prior operator at the time of the 2013 application.

Complementary expenditure was given positive impact, with marginal weight.

• The additional 15 pokies are expected to result in an increase of $276,000 per year in additional spending in other parts of the hotel, such as the bistro. A considerable portion of this additional expenditure is likely to come from visitors outside the Shire of Surf Coast.

Additional employment was given positive impact, with no weight.

• Approval of the additional 15 pokies will create 1.5 additional full-time equivalent (FTE) and 20 seasonal (part-time) positions at the hotel. It is expected the additional employees will mostly be residents of Shire of Surf Coast.

Community contributions was given positive impact, with marginal weight.

• The hotel will make additional cash contributions of $30,000 per year while the additional 15 pokies are in operation. The hotel will also continue to make the existing $25,000 cash and in-kind contributions while the additional 15 pokies approved in 2013 are in operation.

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

• The portion of new gaming expenditure not attributable to problem gambling is an economic benefit. It is estimated the additional 15 pokies will result in new expenditure of between $247,405 and $291,065, with a portion of this spend expected to be transferred expenditure from other gaming venues and a portion from visitors that are not residents of the Shire of Surf Coast. Accordingly, the commission considered that it is likely that the majority of new expenditure will not be associated with problem gambling and gives this factor marginal weight.

Increased gaming competition in the Shire of Surf Coast was given positive impact, with nil to marginal weight.

• As the nearest gaming competitor (Grovedale Hotel) is located 15 km to the north, and there are no real competing venues within the Shire of Surf Coast, this benefit was given nil to marginal weight.

Increased tourism in the Shire of Surf Coast was given positive impact, with no weight.

• The improvements to the hotel's facilities would have the potential to attract and increase tourism spend in the Shire of Surf Coast. However, there was a lack of direct detailed evidence given on this factor by the applicant. The commission gave this economic benefit no weight, as it did not want to double count this benefit with the increased complementary expenditure and the social impact of the improved facilities.

Disbenefits

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

• The portion of additional gaming expenditure attributable to problem gambling is considered an economic disbenefit. The commission considered that residents in the primary catchment area have a level of socio-economic advantage, making them less financially vulnerable and generally less susceptible to gambling-related harms. The commission also considered that during peak times the additional pokies are likely to be used by tourists from outside the Shire of Surf Coast. The commission was persuaded that any increased incidence in problem gambling in the Shire of Surf Coast from the additional pokies is likely to be mitigated by factors such as varied offerings and the RSG practices in place at the hotel.

Diversion of trade from other gaming venues in the Shire of Surf Coast was given negative impact, with no weight.

• It was estimated that 20 per cent of the additional gaming expenditure would be transferred from other gaming venues, including 10 per cent of the additional expenditure from other venues in the Shire of Surf Coast. As the closest gaming venue to the hotel is more than 15 kms away, the commission considered the diversion of trade is likely to be minor.

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

• The commission' view is that, while new pokies expenditure at the hotel could be felt by local non-gaming businesses, it is difficult to determine that the money spent on pokies would necessarily have been spent elsewhere. Accordingly, the commission places nil to marginal weight on this negative factor.

Benefits

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

• The additional 15 pokies will better serve the needs of gaming patrons by providing additional opportunities and choice for those who choose to play the pokies. However, the commission considered that utilisation issues occurred primarily during peak periods where a significant percentage of patrons are tourists. Accordingly, this benefit was given nil to marginal weight.

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

• Social benefits may arise from the community's access to and use of improved facilities at the hotel., such as the upgraded alfresco and bistro areas. However. the commission gave this benefit nil to marginal weight as the commitment to undertake similar renovations was given in the 2013 application.

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

• The commission accepts that community contributions in the form of cash and in-kind donations can have a positive social impact by improving the social fabric of the community in which they are made. The total contributions of $55,000 per year ($25,000 from the 2013 application and an additional $30,000 from this application) will be distributed to the local cricket, football and netball clubs, with a focus on ensuring these funds go towards young people, the local surf rescue club and possibly to the mental health and wellbeing of young people in Surf Coast.

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 gambling-related harms, which leads to other costs such as adverse health outcomes, family breakdowns and other social costs. The commission considers the risks is less in this instance due to the number of tourists using the pokies during peak times and the non-gaming offerings at the hotel.

Community attitude was given negative impact, with marginal weight.

• The commission considered the submissions made by the Council, the Torquay Improvement Association and several individuals in opposition to the application. While the commission was satisfied the responses received suggest there was a negative attitude in small portions of the community to the increase of 15 pokies at the hotel, the commission was not persuaded that these views represent the views of the Shire of Surf Coast community generally.
  

Read the gaming decision – EGM increase – TTHL Pty Ltd.

See our infographic on the Shire of Surf Coast and compare its pokies statistics with other councils across Victoria.