Gaming Law Reform: How will the changes affect your business?

Author: Micah Jenkins

Publish Date: March 18, 2009

1. New Amendments to Gaming Machines Act 2001 and the 2002 Regulations

The Gaming Machines Amendment Act 2008 and Amendment Regulations 2009 commenced operation on 29 January 2009.
The changes include:

• new powers for the Director of Liquor and Gaming in relation to the location of gaming machines;
• new arrangements in relation to hardship gaming machines;
• new rules regarding the conversion of approved amusement devices (AADs) into Poker Machine Entitlements (PMEs);
• the introduction of a 15% cap on multi-terminal gaming machines (MTGMs);
• the removal of the requirement for monthly meter readings;
• the abolishment of free PMEs for new and small clubs; and
• the conditional entitlement to send promotional material to members containing gaming machine advertising.

2. The New Gaming Machine Threshold Scheme

Perhaps the key change is the replacement of the Social Impact Assessment (SIA) regime for the transfer of PMEs between hotels and clubs by the new "Gaming Machine Threshold" and "Local Impact Statement" schemes. While the fundamentals of the existing PME transfer and forfeiture provisions continue to apply, the requirements and procedures for increasing the authorised number of PMEs at a given premises have been overhauled.

As a starting point, each hotel or club is given a "gaming machine threshold" (GMT), which is equal to their SIA threshold as at 29 January 2009, and is the maximum number of approved gaming machines that may be kept on the premises. Of course, exceptions apply.

3. The New Local Impact Assessment (LIA) Process

If a hotel or club wishes to acquire more PMEs (which would exceed its GMT), the venue will need apply to the Casino, Liquor and Gaming Control Authority (Authority) for approval to increase its GMT. This application may need to be accompanied by a satisfactory LIA (either Class 1 or Class 2 depending on the transferee and transferor venues’ locations and the transferee venue’s current GMT). The Office of Liquor, Gaming and Racing (OLGR) has established an elaborate system for categorising all local government areas ("LGAs") of NSW into Bands 1, 2 and 3. For instance, if your LGA is in Band 3 (such as Newcastle or Sydney CBDs), OLGR consider it undesirable for the area to have more poker machines and obtaining more PMEs will be difficult.

There is no prescribed template for a LIA but the information and consultation requirements for both Class 1 and 2 LIAs are found in detail in the new Regulations. The Authority has published guidelines for preparing both Class 1 and Class 2 LIAs. They involve a similar approach to a Community Impact Statement (CIS) for new liquor licence applications.

Despite the inherent complexity in the LIA process, the Government’s intention is that the LIA process will be simpler and cheaper than the SIA process. In particular, unlike the SIA process, by closely following the Authority’s guidelines, the LIA process could be undertaken without the involvement of a social impact consultant because the information and consultation required is quite clearly specified and because statistical data will be provided by the OLGR. However, it is submitted that Class 2 LIA applicants that receive negative objection submissions would be wise to engage a liquor industry consultant to demonstrate that the "overall impact of the application" is a positive one.

This article is not intended to be an exhaustive outline of all changes arising from the Amendment Act and Regulations and clearly is focused on the GMT and LIA schemes.

If you would like further information on the recent changes to the gaming laws and how they might affect your business, please contact Micah Jenkins on 02 4907 6340 or email micah.jenkins@harriswheeler.com.au.

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