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House of Assembly - Fifty-Second Parliament, First Session (52-1)
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GAMING MACHINES (MISCELLANEOUS) AMENDMENT BILL

Second Reading

Adjourned debate on second reading.

(Continued from 21 July 2010.)

Mr GRIFFITHS (Goyder) (11:04): It is my pleasure to confirm that I represent the shadow minister in the other place (Hon. Terry Stephens) in the debate on the Gaming Machines (Miscellaneous) Amendment Bill. However, I presume that quite a few members from our side will make a contribution. It is not my intention to go to the committee stage—I flag from the very start that the position held by the opposition is to support the bill—but some individual members have given a level of consideration to amendments that they may propose. I hope those amendments have been flagged with the minister, but maybe not. We will see what happens.

I indicate from the start that gambling is a very emotive issue in the community. For about 12 months after my election to this chamber in 2006, I held the shadow gambling portfolio, and, in that time, I tried to engage with the community, with the industry itself and with the community groups who were trying to support those people who were suffering as a result of gambling problems. In many ways, I found that 12-month period to be very enlightening.

I do recognise that, for some people, gambling is an issue that they barely tolerate while others find it to be a form of entertainment they can control quite comfortably, and they enjoy the experience that it provides for them. For other people it has become the devil in their lives, and it has affected them in so many ways. The industry, though, I think is very responsible in the way in which it controls, assists and invests; and I recognise that this bill is all about improving the systems that are in place and ensuring that we can manage to move forward the debate as it occurs with respect to gambling in South Australia to benefit all sections of society.

I commend the minister on bringing the bill before the house. I might make some comments later in relation to the Independent member from Tasmania, Andrew Wilkie, and the commitment he has obtained from the federal Labor Party in relation to gambling amendments and how they may impact on this bill, or, indeed, a series of legislative measures which the minister flagged in his second reading explanation, as well as a discussion paper to be released in the last quarter of this year to consider national amendments that may be required for gambling.

About halfway through the time I spent as the shadow minister for gambling, I was invited by the Australian Hotels Association to undertake a tour of some of its recently updated facilities—hotels in the community and metropolitan Adelaide. It was easy to recognise then—and, certainly, I have tried to be far more observant in my time since—

The Hon. A. Koutsantonis interjecting:

Mr GRIFFITHS: No.

Dr McFetridge: Research!

Mr GRIFFITHS: True. Lunch was arranged as part of the tour, but the drinking was kept very much to a minimum, minister. It was easy to recognise that gambling, as it is developing across South Australia, has created an opportunity for licensed premises—be they hotels or clubs—to invest serious dollars in upgrades of their facilities. That, in effect, creates some enormous benefits for people who use those facilities but who do not necessarily use the gambling machines within them to enjoy a better quality of time, their meal and the environment, so I recognise that as a good thing.

The other side of the argument for me, though, was a couple of discussions I had with some gamblers' rehabilitation groups. Indeed, on one Saturday morning I went to a church hall in North Adelaide and met with a gamblers' rehabilitation group. About 16 people were there, and the discussion I had that day moved me. Each of the people recounted the story of their life and how gambling had affected them (predominantly with poker machines), how the devil still hangs over their head every day and that they have to resist the very serious temptation every day not to drive their car to a facility or walk into a facility that will provide them with an opportunity to gamble.

I respect enormously that it is an issue that affects a very small minority of the community, but, as a wider social responsibility which the parliament and our community have, we must provide every opportunity we can to support those people to ensure that their lives are returned to the way they would like to live (and we would all like to live) and to give them more productive opportunities to help them control that, and the industry has been very up-front about it.

I know from some of my discussions with the casino, when I have talked to them about gambling issues there, the number of people it has staffing it whose total responsibility rests around identifying people in the casino who might be having some level of difficulty and talking to them about it is very commendable. The Independent Gambling Authority, in the work it has done over a number of years now, has proactively worked in every area it can. The industry is maturing. Society is maturing in relation to its use of gambling machines, and now it is appropriate, as the minister indicated in his second reading speech, to bring in legislation that goes about improving things.

There are comments I will make and questions I will pose to the minister—I know he has people here making notes—that were discussed as part of the opposition formulating its position on it. There will also be other members from the opposition who will rise to speak in relation to the bill, but hopefully at the end of this and as it progresses through the parliament we will have a bill that actually improves gambling in South Australia, which is what everybody wants to see.

I note that the bill was introduced by the minister on 21 July, and its stated objectives were to create a better, responsible gambling environment in South Australia and to reduce the cost and risks associated with regulation and various administrative improvements. The second reading speech by the minister also referred to a consultation paper which the Department of Treasury and Finance will release in the last quarter of 2010 and which addresses 'the changes necessary to gambling legislation to allow a national response to be developed and implemented, therefore creating the need for a further bill to then be developed and introduced into the parliament'.

I note in some information provided by the minister's office late last week (which the opposition thanks him for) in relation to several questions that had been posed that there are some 12,900 entitlements currently held within South Australia (as on the 30 June 2010 figures), of which the live machines were actually 12,744. Any member who has been in this place for some number of years would respect the fact that in the parliament that sat from 2002 to 2006 there was a very lengthy debate about gambling and that, as part of those amendments, as I understand from the Hon. Mr Xenophon, there is a requirement for a reduction of 3,000 machines.

In the one year I held the shadow responsibility for gambling, in my questioning of the Hon. Paul Caica, the then minister for gambling, about how successful the government and the Independent Gambling Authority had been in reducing the number by 3,000 machines, the figure then outstanding was in the range of 850. The minister might like to update us as to exactly how many of the 3,000 to be removed have been removed and how many are still outstanding.

In all the consultations I had with people they all talked about the $50,000 cap on transferable electric gaming machine entitlements and how that was a hindrance to it occurring. Even in my own electorate of Yorke Peninsula and the Adelaide Plains, I have had people who hold entitlements—not in my electorate, incidentally, but who operate other businesses in my electorate—and wanted to onsell those entitlements, but they were concerned that the $50,000 cap was making it impossible. It was too low a figure relative to its real value, so the fact that this bill introduces a lifting of the cap is something that the opposition clearly supports.

The shadow minister put a very strong case for it; there were no objections, I understand, from within our party room. I know the minister has received many letters in his time as minister (and he indicates yes) from people within the community and within the industry—

The Hon. A. Koutsantonis: From you included.

Mr GRIFFITHS: From me included—who are posing the question on behalf of their constituents. The minister indicates that he has listened on this, so I commend him on that. They pose the question of whether it was the intention of the government to review this, and clearly it has been. The minister indicated in his second reading speech that the formation of this bill has been over some time also, so it is not just a reaction to issues that have occurred very recently or to media reports but a bill the government has been putting effort into, and I recognise that, with the studies that have been undertaken since 2008 by various groups, it has put some effort into that.

The proposed removal of the $50,000 cap—and I presume therefore that it is to be supported by both chambers of parliament and come into law—would allow, I would hope, within a very short period of time, the removal of those excess machines down to the 3,000 total. I noted in the second reading contribution that it appears there will be several rounds of trading. I would ask the minister to clarify the intention of how many rounds will occur. Is it intended to try to put some limit on the number of machines for which trading will occur in each of those rounds, or is it an opportunity that, during a round, if all those machines are identified and there is a market for them and the transfer is able to occur, they actually proceed?

From the minister's contribution, I also believe that the stamp duty requirements that would normally be in place for this transaction have been removed as an encouragement for the transaction to occur, and I think that is a good move. No doubt, in the budget deliberations the Treasurer has been having over several months, it would have been an opportunity to put that back for a bit more revenue to come in; however, as I have read the bill, there is no stamp duty applicable.

I would like to go to some other areas. There is a school of thought that suggests that, because such a large number of establishments actually have gaming machine entitlements (I think currently, from the figures, some 476 hotels, 71 clubs and 40 other special circumstances), an increase in the number available to each of those facilities might be of some merit. When the shadow minister in the other place speaks on this he will elaborate further, but he does have some level of thought on this that was developed as a result of feedback received at his consultation on the bill.

It is a social effects test, and I might pose some issues here. I wonder if the minister, in his response, would be in a position to outline the social effect test, the practical implications of that, and where he sees the benefits to be. Again, just from my reading of the second reading contribution, I understand that it is about improvement and ensuring that the establishment actually understands and manages it appropriately and that the community around that establishment benefits from that; however, I would like to hear more detail provided by the minister if possible.

I understand (and correct me if I am wrong) that it is therefore intended to have some control of facilities that are operated on airport land controlled by the Australian government. I believe there are no state taxation revenue opportunities from those facilities—and the minister raises his eyebrows—but I wonder whether this is intended to cap the number of machines that can operate there. Indeed, I am interested to know how many machines are at the Roulettes Tavern at Parafield Airport, and what the implications would be for that group. I do not believe there is any other establishment that fits the bill for this; it is only the Roulettes Tavern.

There are various measures being introduced as a result of this bill—seven, as I understand it. The third and fourth measures formally recognise the solid work of the Independent Gaming Authority, Clubs SA and the Australian Hotels Association in creating Club Safe and Gaming Care responsible gambling approaches. It is obvious—and I have alluded to it already—that it is important to enforce that work.

I also recognise that one of the other changes is the incentives created for all facilities to be signed up to the gambling authority's new code of practice by imposing longer closing hours on gaming venues that do not have responsible gambling agreements with an industry-responsible gambling agency. As I understand it, these venues will be required to close from midnight to 10am on weekdays and between 2am and 10am on weekends.

It is possible that some members of the opposition will put to the minister that a level of consistent closing periods across all facilities would be a preferred option. I will be interested to hear the minister's response in terms of how he is taking the effect of only those groups that do not have an agreement in place having that level of restriction and what the impost will be on clubs and hotels that do have an agreement in place so that anyone reading the Hansard will be able to understand the distinction between the groups that have an agreement and those that do not and what the impact will be on closing hours for those groups.

The Hon. A. Koutsantonis interjecting:

Mr GRIFFITHS: I know the minister is on top of his portfolio—

The Hon. A. Koutsantonis interjecting:

Mr GRIFFITHS: True. The minister confirms that he suspects all groups will take it up, and that is quite likely if there is a reduction in hours of opening that they can do it for.

An honourable member interjecting:

Mr GRIFFITHS: Yes. I also note that compliance and enforcement is an area that occupied a significant part of the submissions that the minister received. It goes on to talk about the work the Commissioner for Liquor and Gambling will do in changing the approach to compliance and enforcement, but it does not give much detail on that. It is quite possible that, in the briefings the minister and his staff had with the shadow minister, he has talked about what the commissioner will do, but for the benefit of House of Assembly members I am wondering whether the minister can provide some background on that.

I note that the penalties have been increased. I have no concern with that. I also note that it makes it very clear that gambling machines must be located in enclosed areas where smoking is not allowed. I fully support that. I have raised a question regarding Roulettes Tavern. The last issue I focus on relating to the second reading explanation by the minister is the reduction in red tape. This has been a target area for governments and opposition, I think, for many years.

The Rann/Foley Labor government has had, I think, two goes now at red tape reduction, with quite high targets set. My recollection is that I read a report in the media last week that talked about the level of efficiency that had been created through changes to legislation to reduce costs to business. I would like to enforce that it is very necessary to do this in all industries, and gambling is no different. So, any change that makes it easier, in an administrative sense, for a business to operate and, therefore, improve its productivity, give it a greater chance to invest and give it a greater chance to employ more people, is one that must be supported.

I have another question for the minister. Again, I apologise, because it is not my intention to put forward any amendments and therefore go into committee, that there are a lot of questions being posed to him in this way. As I understand it, the forfeiture rules are that for a trading transaction to occur, for every four machines one is lost—pulled from the system. My question would be: what happens to that machine? Is it permanently lost? Does it go to Club One? I have some level of understanding about how Club One operates. What actually happens to the entitlement to that machine; that is, the one in every four that results from a transaction? I think that is an issue that I and some of my colleagues would have some interest in.

A question was also posed as part of the reply from the minister to the shadow minister (dated 9 September) which referred to the Spent Convictions Act 2009 (which we note is not yet in operation) and the fit and proper person test which is undertaken. As I understand it, that involves a review of any criminal conviction that an applicant may have. The question posed by the opposition in the discussion on this is: if it is a 30 or 40-year-old offence and, indeed, was a minor offence which the person has now fully recovered from—gone on with their lives, become an outstanding member of the community—and is now in a position to apply for a licence, does that preclude them, or, as part of the review that takes place for the fit and proper person test, do you only look at the recent history of the person or do you take the long-term objective; and does any long-term review involving even a minor indiscretion that resulted in some level of criminal conviction prevent a person from being deemed to be fit and proper? Can the minister provide feedback on that.

Overall, the opposition welcomes the bill. There will be various members who will raise issues relevant to their own electorates and constituents and concerns they may personally hold, but we look forward to the quick passage of the bill and recognise that this bill has been some time in its formulation. Further amendments will be proposed regarding gaming regulations in future times as a result of the work being done later this year, and further amendments may indeed be proposed as a result of the agreement with the federal government and Mr Wilkie from Tasmania. I know that various sections of the industry are somewhat concerned about that, so the minister may choose to make some comments on that. It is a bit hard to discuss an issue that is probably not personally across his brief yet, but he may have some observations on that. I look forward to the continued debate on the bill.

Ms CHAPMAN (Bragg) (11:24): It is a pleasure to be back here in the parliament. I will not be opposing the Gaming Machines (Miscellaneous) Amendment Bill 2010. As I think the previous speaker indicated, this is a conscience vote for the opposition. Of course, we on our side of the house believe in the freedom of having a conscience vote on all bills. In respect of many bills we have agreed to take a party position, but that is just one of the fundamental differences between them and us.

Essentially, this is a bill to clean up the mess from a pretty much botched process undertaken during the debates in 2003. We are in that position because the government of the day (under premier Rann) announced that it was going to deal with all the problems surrounding gambling using gaming machines. This, of course, has a history. I remind the house that this legitimate form of gambling was introduced under the premiership of the Hon. Lynn Arnold and his then treasurer (Hon. Frank Blevins) in the wake of the financial disaster which arose out of the government's hapless management (at best) and gross negligent supervision of the State Bank.

So, the state was in a perilous financial position. To deal with it, the government introduced poker machines as a panacea for tax revenue, and the subsequent financial impecunious circumstances of the taxpayers of this state have meant that that situation has remained. There have been reports on the dangers and perils associated with poker machines. There is no question that a great number of members of the community enjoy the use of this equipment as an activity, but some place themselves and their families in a very dangerous and perilous financial situation.

The Rann government's answer to dealing with that group was to say, 'We don't have a buyback scheme.' I think it was an insincere presentation to the people of South Australia that this was going to be some panacea or resolution to the gambling problems that afflict a few in the community. I made that position clear in those debates. It was a bit like putting a bandaid on a severed leg wound.

At the time, I indicated that the $50,000 cap on the machines that could be bought back was a nonsense. I am pleased to see that the government has obviously realised that it is a nonsense and that it should be removed. I think I was a lone voice at that time, but I am pleased to see that the government has finally woken up and realised that the cap has to go.

The Hon. A. Koutsantonis interjecting:

Ms CHAPMAN: The minister indicates that there are others. I am pleased to see that, on the issue of that amendment, the $50,000 cap is to go. There are some other things that the government has tidied up, and our lead speaker, the honourable member for Goyder, has covered those superbly.

I draw to the attention of members of the house, and to the minister in particular, the proposal in the bill to reduce red tape, which the minister says is important for all industry sectors. Included in that is a measure to strengthen the social effect test, and to ensure that, before extraordinary expenditure is undertaken by those who might wish to apply and to avoid unnecessary costs being incurred, a measure will be introduced to enable the ultimate failure of a venue in that social effect test to be circumvented. I think that is a good initiative, and there are a few others in that category which I think are meritorious. The industry has obviously spoken, and I am pleased to see that the minister has listened.

In his second reading explanation, the minister describes one of the measures as follows:

The sixth measure removes the requirement that a government inspector be present at the installation of a gaming machine to seal the machine. This allows the Liquor and Gambling Commissioner to better allocate the office's resources as part of its compliance and enforcement function based on the Commissioner's assessment of risk.

The bill, as I read it, changes the requirement of this obligation, in particular clause 44, which is to substitute section 64, to provide a new penalty regime for the sealing of gaming equipment and gaming machines. I think that is what he is referring to. There may be other aspects of his bill which cover this as well.

Can I remind the house, firstly, that we have a whole division in the Gaming Machines Act 1992 which provides for offences relating to cheating. Division 5 covers sections 62 to 67. That establishes a regime to ensure that there are severe penalties for anyone in that broad spectrum who interferes with machines, interferes with devices, or seals a gaming machine, unless they are an authorised officer or inspector, for the removal of gaming tokens, and sets out certain circumstances, particularly in section 66, where machines are not to operate and that principally relates to their connections and the like.

Previous parliaments have been very clear in ensuring that we have a mechanism by which the machines themselves are unable to be tampered with, as best as can be dealt with, and that for any person who is not authorised to interfere with machines there are severe penalties if they attempt to or do so. As members may be aware, it is the potential rigging of machines to change the statistical capacity for a player to win or, on the flip side, for an operator to have the benefit of income from the machines and increase their own revenue stream that is very important. So the integrity of the game, in this case the piece of equipment, is very important.

It is no different from having integrity processes that secure that bets on racehorses cannot be placed after the horses have jumped, or that roulette tables are not skewed so that certain numbers come up. These are all important for the issue of integrity. If you are going to have a game of chance and an opportunity to have fair chance of winning if you play the game, whether you are playing against an operator or the government, which wants to secure an income stream from it, it has to be secure.

During the course of consideration of this matter, on our side of the house, I was ably advised by the member for Stuart, who has had personal experience with the installation and operation of a poker machine (I do not know how many, but I will just say one for the moment). He is an eminently decent person whose wise advice I have taken. He tells me that the technology of the day is that when a machine arrives for installation on premises it is already sealed and that when it is installed there are certain parts of the machine that are untouchable by the operator or the person who might be attempting to play the game—any unauthorised person—and that they are protected from tampering.

The mechanism to ensure that does not happen is an alarm system that goes off somewhere in Adelaide that alerts the commissioner's office that someone or something has interfered with the seal. The commissioner's office can then action some response, presumably to attend or to make a telephone call, depending on how far away these premises are, to identify whether there has been an unwelcome invasion, whether the owner has tampered with it by rigging the thing so he gets a better percentage, whether there has been an earthquake, or whatever the explanation might be as to what has happened, and as a result of that scrutiny is very strict. It presumably relies on the technical equipment that provides the alert and its electricity supply etc. all working. Nevertheless, there is an alert system that is there and actionable when there has been any attempt to tamper.

On the flip side, it is important to consider whether it is necessary for us to continue to send inspectors out to look at these machines at the time that they are being installed to observe and certify, or report back or whatever, that that seal has not been tampered with. According to what the minister has told us, it does impose an unreasonable obligation on the time and resources of the office; therefore, should we continue to impose it? He says not. He says the officers have better things to do.

I say that the number one responsibility of the office is, frankly, to do whatever this parliament, in its legislation, tells it to do. If it, in fact, is a necessary part of that process to secure the integrity of the machines—the very bit of equipment that can change the dice as far as the balance goes between government revenue, operator and player—then it needs to be under some considerable scrutiny if it is going to be removed.

I have received some comfort from the member for Stuart that these bits of equipment now come with the sections that are necessary to secure the integrity of these machines with an alarm system. I am very pleased to hear that. Apparently you can still undo a part of the back of the machine to get your money out, as the proprietor of the premises that operates it. Obviously, that is to clear out the coins every day from some poor hapless players who have lost their money.

However, I remain concerned, minister, that the machine should be inspected by an authorised person at the time of installation or transfer to another premises. The reason I say that is principally this: firstly, to simply have penalties for persons who are not authorised officers to be punished if they do tamper is a bit like shutting the gate after the sheep are out. Secondly, it is important for the operator themselves—that is, the proprietor of the premises who is operating the poker machine—to ensure that there is some independent certification at the time of installation that the equipment is intact and secure (the seal has not been broken) and that there is an independent record of that occurring. That would actually provide a protection for the proprietor themselves to ensure that they are less vulnerable to an allegation at a later date that they had tampered with this machine, even causing an agent to tamper with it before it is installed.

I am not completely convinced that this idea that authorised officers of the commission have better things to do and that it is a waste of resources is a good enough excuse not to deal with the scrutiny of these machines, because in this instance poker machines need to be secure, proprietors need to have the proper protection themselves and the players need to be assured that when they go in to play these machines the identified legal odds are secure.

As I am sure the Speaker would be aware from poker machines in her own electorate, the odds are a little bit against the poor old player in the first place because there has to be a margin upon which there is a return to both the proprietor and, of course, the taxpayer in the sense that Mr Foley has to get his cut. So, these things are gauged to ensure that you do not have an even chance when you play a poker machine; the odds are a bit stacked against you anyway but, of course, you are entitled to go in and play and hope that you get the jackpot.

I will have a further look at it if an amendment is required in relation to that. I note that there is an increased penalty under clause 44 for persons, other than an authorised officer, in respect of the sealing of gaming equipment and also, separately, for the sealing in any way of any gaming machine (as distinct from equipment) or break or in any way interfere with those. I remind the house that that is now to have a $5,000 penalty or imprisonment for three months, so it is quite a severe penalty.

As I say, I think that it is important that we ensure that the sheep do not get out and that we do not just shut the gate after they have got out. I may have more to say later, during the course of the committee, because I understand some members have other amendments to put forward. I will give the minister as early notice as possible.

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