In 2004, the Government introduced legislation to reduce the number of gaming machines in the state by 3,000 in a bid to reduce gambling. So far, only 2,200 have been removed from licensed premises.
At the time, Premier Mike Rann was quoted as saying, "No one has had the guts to do this before – no other state and, as far as we are aware, no other country has rolled back a number of poker machines after they have been introduced".
This was a big statement by the Premier and at this stage he has not been able to achieve his desired result. Therefore, it is likely the Premier will revive his plan to meet his quota to reduce 3,000 gaming machines by reviewing the trading system.
Currently there is a trading system in place whereby the government offers a fixed price of $50,000 per gaming machine entitlements (GME). However, the seller only really receives $37,000 per GME as for every four GMEs sold to the trade one GME is removed from the system, thereby slowly eroding the number of machines in an attempt to achieve the reduction of 3,000 intended by the Premier. The problem is that no more Licensees are willing to sell gaming machines at this price and as a result the current trading system is no longer working.
Recently there has been a lot of talk of a possible introduction of a market driven model trading system where the price is determined by the level of demand that the market is willing to pay. It is likely that we will see GMEs sold at substantially more than the current $50,000.00 offer. Similar trading systems have occurred in eastern states where the prices have reached between $100,000.00 and $200,000 per GME.
But are you ready for an open market trade system?
Before you can purchase any GMEs you must have more gaming machine approvals on your Licence than approved GMEs. These are different approvals and will appear as separate approved numbers on the gaming machine licence.
You may recall that in 2004 the government had another cull of gaming machines, by reducing venues with 40 approved gaming machines back to 32 via issuing only 32 GMEs for these venues, and reducing venues with between 21 and 32 approved machines back to 20 via issuing only 20 GMEs for these venues.
These venues are still approved for the original number of gaming machine approvals, however now they have a reduced number of GMEs or actual machines they are entitled to have.
The maximum number of gaming machine approvals is 40 for any one venue. I urge you to check your licence.
If your venue is approved for a lesser number than 40, then you can apply to increase the number of gaming machine approvals. It is important to note this does not increase the number of GMEs, rather just the number of approvals which will entitle you to further increase the number of GMEs, if desired, when and if a new trading system comes to fruition.
In a recent decision by the Liquor & Gambling Commissioner (in which we acted for the successful party), the Commissioner found that an application to increase the number of gaming machine approvals is not a new application, therefore the Section 15(5) "social impact test" will not apply. Furthermore, the Commissioner does not have any discretion which he can exercise in relation to these types of applications.
In effect, this means that the number of gaming machine approvals can be easily increased in order for you to be ready to purchase further GMEs if and when there is an open market trading system in place.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.