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Coalition members' dissenting report
The Coalition members of the committee believe the amount of time set
aside for what should have been a thorough inquiry into this legislation was
disgraceful. Serious issues have been raised with the committee including a
lack of consultation and clarity regarding the legislation. State governments and
regulators have raised issues in submissions
and requested further consultation through COAG.
Industry has raised issues around the timelines for implementation and cost.
The concerns of the governments and organisations which the Labor government
would leave to implement this legislation appear to have been ignored.
This inquiry has been a rush job from start to finish. One week for
submissions and one hearing is not adequate for this legislation and the number
of serious issues raised with the committee. A thorough inquiry is warranted.
The experience that committee members have gained since this committee was
established, and which could have been applied to the issues, has been wasted
through lack of engagement with all the stakeholders.
While the Coalition supports voluntary pre-commitment as a tool for
those who have gambling problems it does not agree with the how the Labor
government wants to achieve this. Coalition members of this Committee therefore
believe this legislation should not be supported in its current form.
Coalition committee members will outline below the concerns raised with
the committee which we believe have been glossed over in the committee majority
report. Although ultimately not supporting this legislation, coalition
committee members will make some recommendations in an attempt to improve the
bill so that it takes into consideration the key issues raised with the
The evidence presented to the Committee on the negative impact of this
proposed legislation on hospitality employment and the very real risk there
will be widespread non-compliance was clear. There was no rebuttal to the
concerns raised by industry that the forced expenditure to achieve compliance
would result in job losses, marginal clubs being further disadvantaged, and
many venues being non-compliant through no fault of their own, rather as a
consequence of state and territory based regulators not approving new and/or
altered games within the timeframes specified by the legislation.
This legislation is not needed
Coalition committee members believe that ultimately, gaming is a state
issue and the Commonwealth should not continue to erode the powers and responsibilities
of the states. Professor of Constitutional Law, Dr Anne Twomey was also of this
As a matter of principle, however, I am of the view that
gambling is fundamentally a State matter that should be dealt with by State
laws. While I am personally supportive of measures to limit the pernicious
effects of gambling on poker machines (or indeed, to get rid of them
altogether), it would be more consistent with the federal system and with the
principle of subsidiarity for such laws to be applied at the State level.
The evidence shows a clear lack of consultation with the states
even though they will be left to implement the system. The states and
territories, via COAG support voluntary pre-commitment technology so there is
no need to add yet another layer of bureaucracy to this process which does not
take into consideration the differences between jurisdictions.
Agreement by the states and territories for the Commonwealth to
legislate on a national basis should be a necessary precursor for legislation of
Uniform timelines will create unequal compliance burdens
This bill imposes uniform timelines and conditions on all states and
territories which will result in extensive compliance burdens and costs for
some jurisdictions due to the lack of central monitoring systems.
The Productivity Commission (PC) acknowledged the disparities between states
and territories regarding their ability to implement pre-commitment.
These technical differences were also pointed out by the Gaming
Technologies Association (GTA):
Further, each State and Territory has its own existing
technical requirements which must be augmented by clearly defined
pre-commitment functional and technical requirements before redevelopment can
Coalition committee members suggest that these differences between
states and territories, which will affect the implementation timeline and costs
for some jurisdictions, be taken into consideration with the timelines being
moved from the legislation to regulations to allow greater flexibility and more
time to achieve compliance.
Coalition committee members recommend that the different technical
situations in jurisdictions, which will directly affect timelines and costs for
implementation, be taken into consideration by moving the timelines from the
legislation to the regulations to allow greater flexibility and more time.
Technical challenges are not limited to the state/territory system as
confirmed by the Gaming Technologies Association whose members supply gaming
machines. As the association has repeatedly told the committee, before
redevelopment of machine software can begin, functionality must be clearly
defined so technical requirements can be developed. The GTA reported that to
date work has not commenced on the functional design. Technical differences in
each state and territory further complicate the process. The GTA stressed to
the committee that the implementation timelines in the bill 'cannot be met'.
This is the organisation that represents the suppliers of new gaming machines
in Australia and they have made this point repeatedly to the government and the
committee but they have been ignored. This advice around the complexity and
cost for industry was reinforced by Aristocrat, which has almost 60 years
experience in the industry. Aristocrat supported the information provided by
GTA and added:
Currently there are approximately 400 Aristocrat titles
installed in the Australian gaming environment. Upgrading these to ensure
compliance with any new regulatory requirement would involve a huge investment
and redirection of resources towards the development of the necessary
mathematics models, artwork and feature sets. Aristocrat believes the implementation
timeframes being discussed by the Committee are wholly unrealistic.
Each new Aristocrat game has to be modified to meet 11
different protocols across the country, a problem that cannot be overlooked.
Manufacturers will need time to gain recommendations from independent licensed
testing laboratories and approval from gaming regulators for compliant
solutions, estimated at two months per game, per jurisdiction. Therefore the
proposed voluntary state wide precommitment system is highly complex. 
...the issues that stand out for Aristocrat relate to the
significant technological and regulatory hurdles that will need to be overcome
in order to provide what is outlined in the legislation within the timeframes
Coalition committee members are astonished that the Department of
Families, Housing, Community Services and Indigenous Affairs appears to be
accepting the advice from one organisation, the Toneguzzo Group, over the
consistent advice provided by the gaming machine manufacturing industry.
Coalition committee members also note that the copy of the Toneguzzo Group
report available under FOI on the FaHCSIA website has blacked out all useful
information regarding implementation, costs and timeframes.
Existing pre-commitment systems
The status of existing pre-commitment systems is not clarified in the
bill. Many venues have already made significant investments in pre-commitment
systems and in most cases have entered contractual relationships to provide
pre-commitment to patrons. As pointed out by Clubs Australia it would be unfair
to penalise venues which have already installed pre-commitment systems and
require them to replace their systems with a new version.
Coalition committee members suggest that the legislation specify that
existing pre-commitment systems that meet the minimum requirements should be
recognised as compliant as quickly as possible to provide regulatory certainty.
Coalition committee members recommend that existing pre-commitment
systems that meet the minimum requirements specified in the legislation should
be recognised as compliant as quickly as possible in order to provide
regulatory certainty for venues.
Coalition committee members note that although the introduction of the
legislation had been delayed by 10 months, only the timeline for the ATM limit
changes has been extended. Specifically Clubs Australia has pointed out that
the three year implementation timeframe for venues with more than 20 poker
machines does not provide sufficient time for clubs to absorb the compliance
costs and may result in widespread non-compliance. It noted that the
Productivity Commission recommended that venues be given a minimum of six years
to amortise the capital investment.
The Australian Hotels Association stated its preference that venues be
able to make the change to voluntary pre-commitment through the natural
replacement of machines.
The need for venues to have more time to comply was supported by the
manufacturing industry. Aristocrat stated:
We strongly believe a long term, phased implementation
timeframe is a necessity for venues, especially smaller venues, who will need
sufficient time to absorb the costs associated with overhauling their entire
machine and game fleet. Importantly, a phased approach would also allow policy
makers to respond to the evidence base that emerges from trials.
GTA also highlighted this issue to the committee:
The Bill should instead specify that the development of
revised functionality must be completed by consultation with relevant
stakeholders; and that its subsequent implementation should then commence
according to venues’ machine replacement programs.
Financial capacity to comply
Clubs Australia pointed out that a 2011 KPMG survey found that 51 per
cent were in financial distress. The legislation does not take into
consideration the financial capacity of clubs to comply. Clubs Australia noted
that many clubs in regional and rural areas will face the same timelines as
city casinos despite the average annual revenue per machine being significantly
less. It suggests that the venue's average revenue per machine should be taken
into account and recommends an expansion to the definition of small venue to
include those that have smaller revenues per gaming machine.
While the Department of Families, Housing, Community Services and
Indigenous Affairs (FaHCSIA) raised issues with the suggestion made by Clubs
Australia regarding expanding the definition of small venues,
Coalition committee members believe it should not be dismissed out of hand but
should be the subject of consultation to see whether some aspects can be
Need for greater flexibility
Given the difficulties that some venues may face to implement
pre-commitment by the timeframe required in the legislation, Clubs Australia
has suggested that the Minister should have the power to extend the timelines
if required. To achieve this it suggests the deadlines for venues should be
contained in the regulations rather than the legislation.
Coalition committee members recommend that further consultation with
industry take place to ensure the timelines proposed in the bill can take
further consideration the ability of smaller venues, those in regional and
rural areas and those in financial distress to comply with the requirements.
This should include the suggestions put forward by industry and the placement
of deadlines in regulations.
Need for a general exemption power
Clubs Australia suggested that there is a need for a provision to allow
the Minister or Regulator to have powers to exempt or modify the obligations
for individual venues in extenuating circumstances such as floods. This would
allow the minister/regulator to extend deadlines for implementation. These
provisions should also include the temporary suspension of the ATM withdrawal
limit if banking facilities in a local area have been affected.
Coalition committee members support this suggestion for a general
ATM withdrawal limits
Another example of the lack of consultation and evidence is around the
$250 per day ATM withdrawal limit. The Productivity Commission found that
the causality between access to ATMs and problem gambling was 'hard to prove'.
The ATM Industry Reference Group outlined why a 12-month lead in time is
Unlike Victoria where a limit of $400 per card applied across
any 24-hour period, the current proposed change would apply across multiple
states and territories, which are all subject to different legislative and
The geographical locations of ATMs in gaming venues across
Australia are spread far and wide;
It will take many months for each ATM company to put in place
the necessary technological arrangements to differentiate between ATMs in their
networks that the limit would apply to (licensed premises with electronic
gaming machines – EGMs) and those that it wouldn’t (service stations,
convenience stores, licensed premises without EGMs, other locations, etc). As
part of this process, ATM companies will have to identify and work on ATMs at
each individual site (there are currently more than 5000 of ATMs located on
licensed premises in Australia);
On the basis that these bills were to pass Parliament before
the end of 2012, the development process for the implementation of this limit
would not be able to commence until mid-January 2013, due to industry change
moratoriums in place across the peak processing period within the ATM
deployers. These moratoriums are self imposed and have been put in place for
the protection of the payment system across peak periods such as Christmas and
holiday periods. These moratoriums are critical to ensure integrity to the
payments system and so that there is no interruption to consumers during this
peak period for access to cash;
In many instances, the introduction of the limit will mean
that fresh contractual agreements between the ATM companies and merchants
(hotels, clubs) will need to be agreed upon and struck;
ATMs that are captured by the limit will need to be
programmed to ensure that once the limit is reached, further withdrawals are
ATM and network technology will require updating to ensure
the limit applies across multiple terminals and multiple transactions, and
overall impact to locations where more than one service provider is present;
The AIRG notes that there is no ability for venues to
maintain compliance with the proposed legislation where multiple devices by
multiple service providers are in place, resulting in removal of one of the
service providers’ device and requiring a logistical effort to be undertaken,
as well as the technical effort, not to mention negotiations regarding
contractual breach relating to early contract termination remedies with one of
ATM companies will need to ensure that information displayed
on ATM screens is updated; and
ATM companies will need to update reporting processes in
order to ensure that this major policy change can be adequately monitored.
Coalition committee members believe that given the implementation issues
outlined by the ATM Industry Reference Group, in order to ensure successful
implementation, there should be a lead time of not less than 12 months from the
date of the legislation passing parliament for the daily withdrawal limit to
Coalition committee members recommend that there should be a lead time
of not less than 12 months from the date of the bills passing parliament for
the proposed daily withdrawal limit to apply.
Limit too low
The committee heard evidence that the proposed $250 daily ATM withdrawal
limit is too low and should be higher. The ATM Industry Reference Group
submitted that the PC report was completed in 2010 and allowing for CPI of three
per cent per annum the limit would be around $280 which could be rounded to
$300. The timeframe from the publication of the PC report to implementation in
May 2013 also does not take into account the higher cost of living in this
timeframe. It therefore advocated for a limit of $400 as this limit was
introduced in Victoria in 2012 and had a significant impact on the number of
transactions in gaming venues (a decline of 5 per cent).
Concerns about the limit were also raised by venues. The Australian
Hotels Association stated that the proposed limit will affect food and beverage
sales. It noted that the ABS confirmed that 70 per cent of hotel income is
generated from food and beverage sales.
Clubs Australia also highlighted the weak evidence for this measure which will
cause inconvenience for patrons and staff.
More targeted measures which would not affect other patrons were
suggested to the committee. Clubs Australia pointed out that problem gamblers
can already lower their daily withdrawal limits by contacting their bank or
financial institution directly.
The Australian Hotels Association told the committee about self-exclusion ATMs
which would also target problem gamblers without causing inconvenience to
recreational and non-gamblers.
Coalition committee members recommend that measures around ATM use
targeted specifically to help problem gamblers, such as lowering their daily
withdrawal limits and/or the use of self-exclusion ATMs, should be pursued in
preference to causing inconvenience to all patrons. However, if implemented, the
proposed daily limit should be increased to at least $400 to take account of
the issues raised by industry.
Coalition committee members do not support this bill. It is unnecessary,
heavy handed and overly prescriptive. It places impractical and impossible
timelines on jurisdictions and industry to implement the best systems for
voluntary pre-commitment and their valid concerns appear to have been ignored
in the rush to push through this legislation.
The delay with the introduction of this legislation has not been taken
into account for manufacturers, venues or for implementation of the $250 ATM
daily withdrawal limits. Although the industry can prepare for various
scenarios and the committee heard it has been doing its best, the significant
movements in gambling policy over the past two years has meant that industry could
not start significant preparations with any degree of certainty. There were and
are no guarantees that what was proposed in the draft legislation and what is
proposed in these bills will become law until the bills pass both houses of
parliament. At the very least the timeframes should take account of the 10
month delay since the draft legislation was released in February 2012.
Given the numerous issues raised in submissions it is clear that
consultation has been inadequate and that further work with jurisdictions and
industry is required in order to develop the best voluntary pre-commitment
system that targets and assists problem gamblers which is achieved in a
realistic timeframe that takes account of the technical, implementation and
cost issues raised by industry.
Coalition committee members recommend that the bills not be passed in
their current form.
Mr Steven Ciobo MP
Mr Josh Frydenberg MP
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