The Supreme Court has thrown into doubt a number of conditions placed on pubs’ pokies rooms to protect against problem gambling, finding the liquor authority exceeded its powers by utilising the wrong law and considering social impacts that were “irrelevant”.
The NSW Independent Liquor and Gaming Authority has now frozen applications by pubs to add more poker machines while it appeals the decision, as the government examines whether legal reforms are necessary to protect harm reduction measures.
In a judgment last month, the court upheld a challenge by two hoteliers to conditions imposed on their licences when they successfully applied to increase their number of poker machines. A third hotelier, who appealed the refusal of their application to add a poker machine, also succeeded.
While poker machines are regulated by the Gaming Machines Act, the ILGA used section 53 of the Liquor Act to impose conditions on two pubs – the Whitebull Hotel in Armidale and Griffith’s Area Hotel – when it agreed to let them increase their poker machines by 50 per cent.
The Whitebull was required to employ a dedicated staff member to monitor the machines and players between midnight and 4am, and maintain an incident register of any potential signs of problem gambling behaviour.
The Area Hotel was required to have a staff member – called a Responsible Gambling Officer or Gambling Contact Officer – monitoring the gaming room whenever the machines were in use.
In the third case, two other pubs in Griffith – classified as band 3 for socio-economic disadvantage, the highest level in the state – applied to transfer a single poker machine. The authority sought to impose similar conditions to the Whitebull and Area hotels, but the operators objected – therefore the ILGA refused the application.
Justice Sarah McNaughton ruled the ILGA exceeded its power by using the Liquor Act to impose those conditions, which had the effect of “totally undermining” the Gaming Machines Act, and “cannot be what parliament intended”.
The pubs’ case was “compelling”, McNaughton found. The two acts were related, but regulated different subjects, and the Gaming Machines Act should be seen as a standalone regime.
The Gaming Machines Act contains mechanisms to impose harm minimisation measures, but they are limited to circumstances where the venue must submit paperwork about potential community harms.
McNaughton found that in the three cases before her, “considerations of possible or likely impacts on the local community [from more poker machines] are irrelevant”.
The ruling calls into question all conditions placed on gaming machine operators using the Liquor Act rather than the Gaming Machines Act.
NSW Racing and Gaming Minister David Harris confirmed the authority had deferred consideration of certain types of gaming applications while the appeal was heard.
“Operating gaming machines comes with serious responsibilities, and it is vital that proper harm minimisation measures are in place when venues gain approval to increase their machine numbers,” Harris said.
At the ILGA’s June meeting, following the judgment, six requests to increase the number of poker machines at hotels were deferred, and one was rejected. In contrast, 41 gaming machine increases were approved in the other 11 meetings in financial year 2022-23, with only one other refusal.
The application refused last month was from the Milton Ulladulla ExServos Club, which sought to lift its number of pokies from 114 to 134. The venue is in a band 2 SES region. Gamblers lost about $75 million on pokies in the Shoalhaven local government area in the 2021-22 financial year.
In a statement, the ILGA acknowledged the judgment affected its decision-making processes and powers to impose harm minimisation conditions. Its appeal has been set down for a hearing in August.
Solicitor for the hotels Tony Hatzis, a veteran licensing law expert, was travelling and could not be reached for comment on Monday. Knox Hotels, owned by publican Jim Knox, was also contacted.
The state Labor government vowed to reduce the number of poker machines in NSW – and under regulations now in force, hotels wishing to increase their entitlement must do so from within the existing supply of machines. One entitlement must be forfeited for every two or three transferred.
Harris said the NSW government was “strongly committed to preventing and reducing gambling harms in the community”, including those from poker machines.
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George Barham, an accomplished journalist and avid gambling enthusiast, serves as the esteemed Editor-in-Chief at fly-to-australia.com, Australia’s leading source for comprehensive gambling news and insights. With an unwavering passion for both the written word and the ever-evolving world of betting and gaming, George brings a wealth of knowledge and expertise to the helm of our editorial team.