CASINO (ENCLOSED AREAS) AMENDMENT BILL

Second Reading

Adjourned debate on second reading.

(Continued from 23 March 2011.)

The Hon. CARMEL ZOLLO (20:20): I indicate that I will be responding on behalf of the government. The 100 per cent smoking ban in enclosed areas commenced on 1 November 2007. It became apparent at the time that some venues may seek to install gaming machines outside to avoid the ban. There are numerous reasons why this should not occur. In particular, the government formed a policy position that gaming machines should not be located in areas where smoking is allowed.

This policy position is well known in the gambling sector, as it was publicly stated in a September 2008 paper on amendments to the Gaming Machines Act 1992. This amendment, along with others relating to the licensing of gaming machine venues, commenced on 1 June 2011. This bill anticipates amendments that were planned by the government for the Casino Act 1997 when it was to be next amended. Therefore, the government supports this bill, as it is consistent with the government's policy position.

The 20 gaming machines that were operating in the Oasis Bar area of the Casino were disabled on 10 March 2011. At this time the Liquor and Gambling Commissioner assumed control of the machines under section 40(3) of the Casino Act 1997. The Liquor and Gambling Commissioner, Mr Paul White, has advised the government that he has received a letter from the managing director of SkyCity Entertainment Group acknowledging the South Australian government's firmly held position that gambling does not occur in areas where smoking is permitted.

The government is advised that the SkyCity Entertainment Group informed Mr White that SkyCity would remove the electronic gaming machines from the Oasis Bar area and relocate them to an approved location within the Casino where smoking is prohibited. On 25 March 2011, Mr White relinquished control of the gaming machines in the Oasis Bar area on the condition that the Casino liaise with his office to determine an appropriate area for their relocation. The government is advised the machines have now been removed and placed into storage.

I would like to thank the Hon. John Darley for putting this bill forward. As I have indicated, the government supports this amendment bill.

The Hon. T.J. STEPHENS (20:23): The Hon. John Darley has moved this bill in response to an incident that occurred at the Adelaide Casino some months ago. In addressing this bill, my focus will be on the future and on the past. In planning for the future, we should understand what has gone before, and we should be guided by facts and economic realities, not by the rhetoric and chest-thumping of government media releases.

The SkyCity company has announced publicly that it intends to spend $250 million on upgrading and extending the Adelaide Casino. It is understood that its plans involve pushing out towards the riverbank, with multilevel bars and restaurants overlooking the River Torrens and Parklands. SkyCity proposes to extend the boundaries of its licensed areas to extend its main gaming floor. It proposes to build exclusive new rooms designed to attract increased numbers of interstate and international high rollers and VIPs.

Whilst this much is public, most of the detail is not at this point. Any development of the Adelaide Casino is likely to result in adjustments to the areas licensed for gambling, the areas licensed for alcohol consumption, the areas where the Office of the Liquor and Gambling Commissioner extended trading authorisations apply, the areas where the Office of the Liquor and Gambling Commissioner entertainment consent applies, the maximum number of patrons approved for each area, the areas defined as enclosed for the purposes of the Tobacco Products Regulation Act, and any conditions imposed in respect of any of the above approvals.

The Hon. John Darley's bill attempts to regulate the permitted use of just one of the many areas within the Casino. However, in the next year or so, if development does in fact proceed, there is likely to be a range of new spaces, both indoor and outdoor, created. I am told that, if new areas are created, there is then likely to be a substantial rearrangement of the existing facilities within the Casino.

In my view, discussion about licence boundaries and permitted uses should be discussed as a whole and not considered piecemeal. It may be, at a point in the future, that the Oasis Bar at the Casino becomes an enclosed area with a roof, it may remain an open area that becomes non-smoking or it may remain an open area where gaming is prohibited. These plans are before the government and SkyCity's proposals are being considered. The Liberal Party will have to consider those plans when the government decides that it is prepared to share them with the rest of South Australia's population.

On a personal level, I look forward to seeing SkyCity's plans and encouraging SkyCity's investment in South Australia. I know that the Crown Casino complex in Melbourne was one of the many major projects supported by that outstanding Liberal premier, Jeff Kennett. The Crown complex has a massive impact on the economic and social life of Victorians; it has led to a rejuvenation of not just the Southbank precinct but the CBD and the entire suburb of South Melbourne. I would be amazed if you, Mr President, have not enjoyed yourself at some stage in that Crown Casino complex in Melbourne.

The PRESIDENT: Yes, and Gazzola.

The Hon. T.J. STEPHENS: I would almost be prepared to bet London to a brick that the Hon. John Gazzola has been there for a quiet shandy, sir.

The Hon. J.M. Gazzola: And Ridgie? What about Ridgie?

The Hon. T.J. STEPHENS: Certainly the Hon. David Ridgway has been there with me and we have enjoyed ourselves. Singapore opened its first two casinos last year and tourists have been flocking there. Before then, Singapore's economy was in the doldrums in the wake of the GFC. Since the opening, Singapore's GDP had grown from a negative 16.7 per cent to a positive 22.5 per cent in May 2011. The conservative Singapore government resisted casino-orientated development for many years; it finally relented and is now reaping the rewards.

Following the rise of personal wealth in Asia, particularly China, the region has seen the rise of casino-related tourism. Crown Casino's annual report showed that they made $500 million from international VIPs last year. According to a report in The Advertiser on 23 May 2011, Deutsche Bank predicts the highly competitive Australasian high-roller market in Australasia will reach almost $90 billion by 2015; they say that SkyCity's share of that market will be only 4 per cent, and 4 per cent of $90 billion is a mere $3.6 billion. I know that the management of the Adelaide Casino is pulling out all stops to go after that particular market.

The important thing about a growing market is that Adelaide Casino does not need to take market share from other casinos in order to justify its investment. Every year there is more money and the VIP gambling pie gets bigger. This market will only stop growing when wealth in China and the rest of Asia stops growing. We believe that that will not be for many years to come.

The message that the Liberal Party has received from SkyCity is that it is almost impossible for them to compete in the international VIP market because of a range of regulatory and tax rate issues. Whilst we do not yet know the details, I understand that SkyCity is looking for a level playing field on these issues with other Australian casinos. The Adelaide Casino was not helped by some of the stupid decisions made by this Rann government over the past decade.

When smoking bans were introduced in Australia, every other casino in Australia was given an exemption for their VIP rooms. The fact is that many high rollers in the Asia-Pacific region like to have a cigar or cigarette when they have a punt. The market for high rollers is an intensely competitive one and, if a gambler cannot play in surroundings where they are comfortable, they will go somewhere else.

The Adelaide Casino has put in place state-of-the-art smoke extractors in their VIP rooms so that, if a customer was smoking, it would hardly be noticed by staff and other customers. It is one of the dopier decisions of this government that, at the time, it decided not to exempt the Adelaide Casino's VIP areas from smoking bans. The consequence of this Rann government decision is that, if there are any international VIPs who smoke, they are at Crown, Burswood or the Gold Coast, not in Adelaide, and we are not reaping the taxation benefits that go with it.

The Hon. G.E. Gago: Ridiculous! They go out onto the balcony for goodness sakes!

The Hon. T.J. STEPHENS: I hate to think how many dollars that single—

Members interjecting:

The Hon. T.J. STEPHENS: The Hon. Gail Gago is an expert in gaming. She is an expert in the Casino. I would bet London to a brick that she would not have lost $10 in that casino. Would I be right, Gail?

The PRESIDENT: She is an expert in health though.

The Hon. G.E. Gago interjecting:

The Hon. T.J. STEPHENS: You have visited. Did you have a punt?

The Hon. G.E. Gago: You are talking about smoking.

The Hon. T.J. STEPHENS: Have you ever been there and had a punt? Do you know anything about gaming? No.

The PRESIDENT: Order!

Members interjecting:

The PRESIDENT: Order! She does know quite a bit about health.

The Hon. T.J. STEPHENS: I hate to think how many dollars that single decision has cost the South Australian economy. If Adelaide Casino were getting its fair share of the $500 million in international VIP business, now going to the Crown Casino every year, how many extra dollars would have been spent on local hotels and restaurants? How many extra tourists would have visited Kangaroo Island, our wine regions, even the magnificent part of the world up near Whyalla?

How much extra would have been spent on local retail shops? How many extra jobs would have been created? How much extra tax would have been paid and what could a good government have done with that extra money? Well, that is a bit of a furphy, because God knows what this government would have done with that money.

Smoking and gambling in Australia do not end in casino VIP areas. I am told that, in other Australian states, an estimated 17,000 machines and table games are positioned in outdoor areas. Star City Casino in Sydney has 322 machines on a huge open-air balcony overlooking Sydney Harbour. Several of the big New South Wales rugby league clubs have well over 100 outdoor gaming machines, and some have more than 200. Up to one-third of gaming machines in New South Wales are outside.

I set this out because any debate about smoking within the Adelaide Casino needs to be looked at by considering the market within which it operates. I am told that 30 per cent of revenue—and I will repeat that: 30 per cent of revenue—at the Adelaide Casino comes from non-South Australians. It is therefore shortsighted and self-defeating to apply exactly the same rules to the Casino that apply to local venues.

I also raise these issues to set the background about what happened when the Rann government realised that they had approved an outdoor gaming area at the Casino. Smoking in casinos is commonplace in Australia. Outdoor gaming areas are commonplace in Australia. Adelaide Casino has written approval from the commissioner himself to operate gaming machines in an outdoor area. This parliament decided last November to ban outdoor gaming in pubs and clubs but not at the Adelaide Casino. Adelaide Casino's decision needs to be seen in that context.

When the Premier realised what this government had approved, he described the Casino as 'reprehensible'. Well, if it was so reprehensible, why did his government approve it? Adelaide Casino's legal advice confirmed that they had acted legally and in accordance with the approval given by the commissioner. However, when faced with a barrage of abuse from the Premier and that former legend of a gambling minister, the Hon. Bernard Finnigan, Adelaide Casino management unilaterally decided not to pursue its outdoor gaming area. What that means is that this issue is no longer a live issue. There is no urgency to the measure proposed by the Hon. John Darley. There is no existing ill that needs legislation to prevent it.

I am not an advocate of confusing smoking policy and gambling policy. Senator Xenophon says that, when smoking bans were introduced in hotels and clubs, problem gambling fell. The reality is that patronage from all customers fell, that is, problem gamblers, non-problem gamblers, tourists, everyone. Senator Xenophon's approach is like saying, in order to prevent road deaths, we will ban everybody from driving on the roads during peak times. In my view, good regulations should be balanced and targeted to the problem they seek to solve.

Too often, this government has introduced measures in pubs, clubs and the Casino that just make it more difficult and more annoying for everyone playing the games. A serious policy to address problem gambling specifically targets problem gamblers and leaves the recreational gambler alone. We need to be wary of the nanny state brigade who simply do not like gambling, drinking or having fun and, in the name of protecting the vulnerable few, make life miserable for the rest of us.

In my view, if the Casino can demonstrate that it has state-of-the-art air conditioning and smoke extractors and if it can come to an arrangement with its staff about working in smoking areas, then the government should be prepared to consider Casino smoking areas on their merits. In making these decisions, government needs to be mindful of competitive pressures and economic opportunities.

If I was in parliament in the 1980s, when South Australia was deciding whether or not to have a casino, I am sure I would have voted yes. As a Liberal, I believe in freedom and an adult's right to choose how to spend their leisure time and dollars. Unless I was part of the 1 per cent of people who cannot control their gambling, I should not have a government telling me what I can and cannot do.

I know that there were a few members back in 1985 who did not really like the idea of a casino but wanted the tax revenue that goes along with it. I understand their argument, but sometime between 1985 and today this school of thought has been forgotten. The current regulatory scheme seems to permit a casino but has so many unnecessary rules and red tape that the Casino cannot compete to bring tourists in.

The Rann government, in particular, seems to want to squeeze greater amounts of tax from the same existing pie, instead of growing the casino and everyone sharing a much bigger pie. It is just plain stupidity to permit a casino and then tie its hands behind its back so that it cannot attract tourists, particularly the high roller VIP gamblers, to South Australia. Whilst I understand the sentiments behind Mr Darley's bill, and he may well achieve his aim in the full passage of time, it is premature to legislate on the casino's boundaries before decisions are made about a $250 million investment. For these reasons, I oppose the bill.

In summary, the Darley bill deals with one area of the casino and one aspect of its licensed boundaries. As part of the casino's proposed $250 million development there is likely to be a substantial rearrangement of facilities within the casino and many new areas created. This will involve substantial changes to gaming, liquor and other boundaries, and needs to be remembered. Licence boundaries and permitted users should be decided as a whole, as part of the casino development project, not on a piecemeal basis.

Smoking is permitted in VIP areas of other Australian casinos and there are around 17,000 gaming machines in outdoor areas in pubs and clubs in other states. I repeat that the rules about smoking at Adelaide Casino should be considered after proper consideration of its competitive market and the opportunity to bring VIP gamblers to Australia. Smoking policy and gambling policy should not be confused. Smoking rules should not be used as a back-door method of getting stuck into the gaming industry where this cannot be justified on the evidence.

There are enormous and growing benefits to the state from a bigger casino that can compete for international gaming VIPs. Why should we be the backwater? Like all other Australian states, the government should consider different rules for the casino if the economic upside can be demonstrated.

The industry in South Australia puts an enormous amount of money into the Gamblers Rehabilitation Fund. It has been a pet hobby of mine for some period of time that the money that is pumped into the Department for Families and Communities—and then goodness knows where it finishes up—should go to the NGOs who have people on the ground who are passionate about solving problem gambling issues.

We have millions of dollars that the industry contributes and I do not see that being spent wisely. That is where the focus should be. That is how we solve problem gambling. If we are serious about having free enterprise, private enterprise, let's have a level playing field. I oppose the bill.

The Hon. T.A. FRANKS (20:37): The Greens rise to support this bill. I believe that it is simply common sense that if somebody cannot stop from using one of these poker machines in the Oasis courtyard, where I have in fact been—

The Hon. T.J. Stephens: Shame!

The Hon. T.A. FRANKS: —and seen for myself—

The Hon. T.J. Stephens: Not patronising it, just—

The PRESIDENT: Order! Moving along.

The Hon. T.A. FRANKS: Thank you for your protection, Mr President. If they cannot stop using poker machines for five minutes while they have a cigarette then I think they have possibly got a problem with gambling, as we probably all know. You can simply put a sign up and the machine can be held for you while you go to the toilet or while you have a cigarette. What has not been discussed in this debate so far is that there are workers in the casino and their rights need to be protected as well, and they have a right to a smoke-free workplace. With that, I do commend the Hon. John Darley for bringing this bill before us. It is unfortunate that it was necessary to have a private member raise this in this way, but I do also welcome the government's support.

The Hon. A. BRESSINGTON (20:35): I also rise to briefly indicate my full support for this bill introduced by the Hon. John Darley, following the report in The Advertiser that the casino had located 20 poker machines in the outdoor smoking area known as the Oasis.

Whilst the casino argues that the area was approved for gambling in 1986, and this may well be true, there can be no doubting that since that time, particularly since the introduction of poker machines some seven years later, we have become more stringent in our regulation. This can be seen in the soon-to-be-universal ban on smoking in all gambling areas: a policy we know works given the 10 per cent decline in gambling revenue following the introduction of the smoking ban in pubs and clubs. Cause and effect is still yet to be determined, obviously.

I must convey my disappointment with the Casino in its attempt to locate poker machines in a smoking area. It can hardly claim ignorance of the government policy or of the fact that every other gambling venue, be it a pub or club, is prevented by law from having poker machines in outdoor smoking areas. This is a cynical attempt, in my view, to take advantage of its unique legislative status. This is particularly true, given the Office of the Liquor and Gambling Commissioner's statement that it had previously refused permission to locate gambling machines in the Oasis area.

Like the Hon. John Darley, I commend the action taken by the then gambling minister, though I note that it took the issue to be revealed in the media first. However, I am hopeful that that action will be followed through with the support of the bill, as I have just seen is going to occur. I have to put a tag on this that I am really confused by some of the arguments made by the Hon. Terry Stephens, but I do not think I am the only one. With that, I will leave it.

The Hon. J.A. DARLEY (20:40): I would like to thank the Hon. Ann Bressington, the Hon. Carmel Zollo and the Hon. Tammy Franks for their contributions and support in this matter. I would also like to thank the Hon. Terry Stephens for his contribution.

As I mentioned in my second reading explanation, this bill was introduced in response to the Adelaide Casino's attempt to operate poker machines in an outdoor smoking area situated within the Casino atrium. Following a visit to the Casino by liquor and gambling inspectors, those machines were subsequently disabled. In response to that incident, the then minister for gambling indicated that amendments to the Casino Act would be introduced to ensure that Casino gambling areas remained smoke free, consistent with the government's smoke-free gambling policy.

I must admit that the current Minister for Gambling had indicated to me in person the government's support for this bill. Again, the Casino showed a blatant disregard for the government's smoke-free gambling policy by installing and operating poker machines in an outdoor smoking area. This bill will ensure that this cannot occur again. It is a sensible, non-contentious bill which ought to be supported by all honourable members.

Bill read a second time.

Committee Stage

In committee.

Clause 1.

The Hon. D.G.E. HOOD: Very briefly I would like to rise and place on the record Family First's support for the bill.

Clause passed.

Remaining clauses (2 to 4) and title passed.

Bill reported without amendment.

Third Reading

The Hon. J.A. DARLEY (20:45): I move:

That this bill be now read a third time.

Bill read a third time and passed.