Government Announces Review of Gaming Machine Arrangements

The Government has announced that a review of Gaming Machine Arrangements will be undertaken by the Department of Justice and Regulation, in consultation with the Departments of Premier and Cabinet and Treasury and Finance.

Currently allocated gaming entitlements are due to expire on 15 August 2022. Conducting the review now is aimed at providing certainty about future industry arrangements before the current entitlements expire. The purpose of the review is to determine the future number of entitlements, the terms of such entitlements and how the entitlements will be allocated.

The review will be conducted in two stages:

  1. Stage 1 – July 2015 – June 2016. Will broadly assess the venue operator model and review the regulatory settings and changes required in accordance with the Terms of Reference.
  2. Stage 2 – Timelines for this stage will be determined after Stage 1 has concluded. This stage will implement reforms from Stage 1, including how to allocate new entitlements (if the entitlement system is maintained).

The Terms of Reference are:

  1. Whether the venue operator model has met its objectives;
  2. Whether the regulatory settings for the current model should be retained (being the 27,372 cap on entitlements, 105 machine venue maximum, 35% ownership restriction and the current splits for metropolitan/non-metropolitan and club/hotel allocation of entitlements);
  3. Whether gaming revenue is fairly distributed (structure of taxes and the differential between clubs and hotels, including how clubs demonstrate community benefit);
  4. Appropriateness of a 10 year term and whether entitlements should be issued for a longer fixed term or in perpetuity; and
  5. How new entitlements should be allocated, how the price of new entitlements should be determined, how and when entitlements should be paid for and how the entitlement transfer market should operate.

Responsible gambling and problem gambling will NOT be considered as part of the review, but the government will look at the existing harm minimisation measures to ensure they are appropriate now and post 2022.

Importantly for operators, there will be consultation with industry, community and government stakeholders, although the detail around this consultation has yet to be released.

It is critical that the industry takes this opportunity to have its say in relation to the gaming machine regime. We propose to keep all our clients updated on the review process including advising of the form of and timing for the industry consultation so that you do not miss out on the opportunity to voice your opinion on the future of the industry.

If you have any queries in relation to the review process set out above or any other issue relating to gaming machine regulation, please do not hesitate to contact us to discuss.