Client Update: Leasing – 28 April 2008
Amending the NSW Gaming Machine Act 2001
In brief: Recent
public debate on the virtues of gambling and poker machines has prompted the New
South Wales Government to introduce the 'period of the freeze' pending a major
re-write of the Gaming Machine Act 2001. During this period, there will be limits on
the grant of new, and the transfer of existing, gaming machine entitlements.
Partner Grant Higgins
The 'freeze'
The Gaming Machine Amendment (Temporary Freeze) Act 2008 (NSW) commenced on 14 April 2008. The amendments introduce a number of interim measures focused on restricting the grant of new, and the transfer of existing, gaming machine entitlements until new legislation is introduced into the NSW Parliament later this year. These interim measures are to apply during a 'period of the freeze'. This period commenced on 14 April 2008 and will end on a date to be proclaimed by the NSW Government (presumably, when the new legislation is enacted).
The temporary restrictions apply to all applications made for the grant of new licences or the transfer of existing gaming machine entitlements from 7 December 2007. Interestingly, the retrospective operation of the amendments means that any approval given for the grant of new, or the transfer of existing, gaming machine entitlements after 7 December 2007 and before the commencement of the amending Act have no effect if that approval is inconsistent with the intent of the amendments.
The changes
Three main changes are introduced by the amending Act.
Hoteliers and gaming machines
An application to transfer a poker machine entitlement (under a hotelier's licence) must be supported by each person who has a financial interest in the hotelier's licence. The Gaming Machine Act 2001 (NSW) (the Act) specifically provides that a person with a financial interest includes a lessor who has a beneficial interest in the business of the premises.
The NSW Minister for Gaming, Graham West, summarised the intent of this amendment in Parliament on 28 February 2008: 'This amendment will prevent new applications for the sale of poker machine entitlements by lessees where consent has not been given by the lessor and others with a financial interest in the licence or business.'
It is important to note that the Minister has more recently foreshadowed an exemption from this requirement for those lessees whose leases expire after the commencement of the restriction period on 7 December 2007.
Social impact
An application by a person for authorisation to keep or dispose of a gaming machine must be accompanied by social impact assessment (SIA). A SIA is a mechanism to review the effect and extent of gaming machines in particular geographic areas. During the 'freeze', an application for the grant of new, or the transfer of existing, gaming machine entitlements will not be approved if as a consequence of the approval, the total number of gaming machines for a particular area or hotel or club will exceed the SIA threshold for that area or hotel or club.
In other words, the amendments '...impose a freeze on the approval of new social impact assessment applications by hotels and clubs to increase their gaming machine thresholds or, in simple terms, the maximum number of gaming machines that may be authorised to be kept in their venues' (Minister for Gaming Graham West in Parliament on 28 February 2008).
Multi-terminal machines
An application for authorisation to keep a multi-terminal gaming machine will not be granted during the 'period of the freeze' if the grant of the authorisation would result in multi-terminal gaming machines comprising more than 15 per cent of the total gaming machines authorised to be kept at particular premises.
Business impact
While the holder of a poker machine entitlement nonetheless retains its right to transfer that entitlement as contained within the Act, the transferability of poker machine entitlements is now conditional on satisfying the above criteria. The combined effect of these amendments will inhibit the growth of gaming machines and potentially impact upon the business of those who possess gaming machine entitlements and the owners of premises with gaming machines. Whether that effect is a positive or negative step for stakeholders and communities is a debate that is beyond the scope of this article.
For further information, please contact:
- Grant HigginsPartner,
Brisbane
Ph: +61 7 3334 3540
Grant.Higgins@aar.com.au - David McLeishPartner,
Melbourne
Ph: +61 3 9613 8954
David.McLeish@aar.com.au - Mark StubbingsPartner,
Sydney
Ph: +61 2 9230 4257
Mark.Stubbings@aar.com.au - Rosemary MartinSpecial Counsel,
Perth
Ph: +61 8 9488 3760
Rosemary.Martin@aar.com.au - Nigel PapiPartner,
Shanghai
Ph: +86 21 6841 2828
Nigel.Papi@aar.com.au
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