Taphouse Investments Pty Limited v Independent Liquor and Gaming Authority

[2022] NSWCATAD 255

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Taphouse Investments Pty Limited v Independent Liquor and Gaming Authority [2022] NSWCATAD 255

Hearing dates:

4, 5 April, 4 May 2022

Date of orders:

1 August 2022

Decision date:

01 August 2022

Jurisdiction:

Administrative and Equal Opportunity Division

Before:

L Andelman, Senior Member

Decision:

The decision under review is affirmed

Catchwords:

LICENSING – liquor licence – extension of trading hours- local and broader community - overall social impact – whether detrimental to wellbeing of local or broader community – responsible development of gaming machines

Legislation Cited:

Administrative Decisions Review Act 1997 (NSW)

Gaming Machines Act 2001 (NSW)

Gaming Machine Regulation 2016 (NSW)

Liquor Act 2007 (NSW)

Cases Cited:

Bellesty and Anor v Director of Liquor and Gaming and Ors [2002] NSWSC 1102

Bun v Independent Liquor and Gaming Authority [2020] NSWCATAD 60

Kallin Pty Ltd v Independent Liquor and Gaming Authority [2019] NSWCATAD 36

Smith v Independent Liquor and Gaming Authority [2018] NSWCATAD 224

Texts Cited:

Browne M, Rockloff M, Hing N, Russell A, Boyle CM, and Rawat V (2019) NSW Gambling Survey 2019 Central Queensland University

Hing N and Haw J (2010) ‘The influence of venue characteristics on a player’s decision to attend a gambling venue’, Centre for Gambling Education and Research Southern Cross University Tamworth

Langham E, Thorne H, Browne M (2015) Understanding gambling related harm: a proposed

definition, conceptual framework, and taxonomy of harms. BMC Public Health;16 (80)

Office of Responsible Gambling (2020), ‘Going above and beyond – Responsible conduct of gambling for venues.’ NSW Government

Productivity Commission Inquiry Report Gambling, No 50, 26 February 2010

Rockloff M J (2010) ‘The impact of an audience and venue size on poker machine gambling’ Department of Justice Victoria

Smith C, Wolstenholme A and Duffy C (2019) Shutdown Periods for Electronic Gaming Machines [Snapcracker Research and Strategy]

Category:

Principal judgment

Parties:

Taphouse Investments Pty Limited (Applicant) Independent Liquor and Gaming Authority (Respondent)

Representation:

Counsel:
Ireland C R (Applicant)
Cheshire A SC and Gaven M (Respondent)

Solicitors:
Hatzis Cusack Lawyers (Applicant)
Maddocks (Respondent)

File Number(s):

2021/00277173

Publication restriction:

Nil

REASONS FOR DECISION

Application for extension of hours

1. On 12 May 2021, the Independent Liquor and Gaming Authority, the respondent refused to grant an extended trading authorisation (ETA) for an existing licenced hotel at Victoria Street Wetherill Park, trading as the New Victoria Tavern (the Hotel or the applicant), which sought to trade from 10am to 4am Monday to Saturday and from 10am to midnight on Sundays. Currently the Hotel is licenced to trade from 5 am to midnight Monday to Saturday and from 10 am to 10 pm on Sundays.

2. The applicant seeks a review of the decision made by the respondent to refuse an ETA. The review is conducted pursuant to s 63(3) of the Administrative Decisions Review Act 1997 (NSW). The Tribunal’s role is “to decide what the correct and preferable decision is having regard to the material then before it.”

3. To grant an ETA, the Tribunal had to be satisfied “that the overall social impact of the licence ... will not be detrimental to the well-being of the local or broader community”: S48(5) of the Liquor Act 2007 (NSW) (the Act). I must identify the overall social impact and then ask whether that impact will be detrimental to the well-being of the local or the broader community.

Background to the Application

4. The applicant, Taphouse Investments Pty Limited, is the present licensee of the Hotel but has exchanged contracts for the sale of the Hotel together with the licence to Nelmeer Ashfield Pty Ltd as trustee for the Nelmeer Ashfield Trading Trust.

Views of the Independent Liquor and Gaming Authority

5. The application was referred to the Secretary of Liquor and Gaming NSW for consideration and recommendation, pursuant to Section 42 of the Act. The Authority’s officers reviewed the application and recommended that the application be considered for approval. The officers concluded:

On balance, it is assessed that the Authority may have a reasonable level of confidence that the granting of this application will not be detrimental to the well being of the local or broader community.

6. However the Authority resolved to refuse the application. The Board indicated:

The Authority noted this application is for a new ETA for the existing hotel licence to permit the premises to trade until 4.00am Monday to Saturday, which represents an additional 24 hours per week of late-night gaming. The Authority noted the premises was located in a Band 2 SA2 within Fairfield LGA, which is in close proximity to a problematic Band 3 SA2 in the Fairfield area. The Authority noted that gaming at the venue was relatively intense, with the average profit per gaming machine being more than three times that of comparable metropolitan hotels and compromising 84% of the revenue of the premises. The Authority noted that relevant alcohol-related crime statistics were generally lower than comparable NSW averages and that households in Wetherill Park and Fairfield LGA were socio-economically disadvantaged. The Authority further noted and discussed the objectives to the applications received from both NSW Health and NSW Police and the applicant’s response to these submissions.

7. Late night gaming in a venue that generated three times more than a comparable metropolitan hotel profit per gaming machine, comprising 84 percent of the revenue for the premises was a key concern of the Authority.

8. On 5 November 2021 the respondent provided the applicant with the reasons for the decision to refuse the application for an ETA. The Authority noted that the gaming machines industry is a related industry within the meaning of s3(1)(c) of the Act which requires ‘responsible development’ and that adverse social impacts would be generated by late trading at the venue.

9. The Authority concluded at [37] of its decision:

Given the number of gambling risk factors and the overall economic vulnerability of the local community and especially the financially constrained broader community to sustain gambling losses, the Authority is satisfied that maintaining the status quo is the more responsible approach to the development of the gaming machines industry. This will ensure a longer effective shutdown of machines across the course of the week in this local community, giving “at risk” or “problem” gamblers a meaningful opportunity to stop gambling for the night.

10. In refusing the application the Authority was concerned about gaming related harm to ‘at risk’ gamblers and ‘problem’ gamblers in the late-night period (particularly after 2.00am), taking into account the high socioeconomic disadvantage of the Fairfield area.

The regulatory framework

The Statute

11. The objects of the Act are set out in s 3:

(1)   The objects of this Act are as follows:

(a)   To regulate and control the sale, supply and consumption of liquor in a way that is consistent with the expectations, needs and aspirations of the community,

(b)   To facilitate the balanced development, in the public interest, of the liquor industry, through a flexible and practical regulatory system with minimal formality and technicality,

(c)   To contribute to the responsible development of related industries such as the live music, entertainment, tourism and hospitality industries.

(2)   In order to secure the objects of this Act, each person who exercises functions under this Act (including a licensee) is required to have due regard to the following:

(a)   The need to minimise harm associated with misuse and abuse of liquor (including harm arising from violence and other anti-social behaviour),

(b)   The need to encourage responsible attitudes and practices towards promotion, sale, supply, service and consumption of liquor,

(c)   The need to ensure that the sale, supply and consumption of liquor contributes to, and does not detract from, the amenity of community life.

12. For the purpose of s 3(1)(c) of the Act, the gaming machines industry constitutes a ‘related’ industry. The operation of gaming machines on hotel licensed premises is regulated by the Gaming Machines Act 2001 (NSW) and the Act.

13. The objects of the Act are reflected in s 48(5) of the Act which provides as follows:

(5)   The Authority must not grant a licence, authorisation or approval to which a relevant application relates unless the Authority is satisfied, after having regard to--

(a)   the community impact statement provided with the application, and

(a1)   any published cumulative impact assessment that applies to the area in which the premises the subject of the application are located, and

(b)   any other matter the Authority is made aware of during the application process (such as by way of reports or submissions),

That the overall social impact of the licence, authorisation or approval being granted will not be detrimental to the well-being of the local or broader community.

14. Section 49 deals specifically with extended trading authorisation. Section 49(8) of the Act states:

(8)   Restrictions on granting extended trading authorisation The Authority must not grant an extended trading authorisation in respect of licensed premises unless the Authority is satisfied that--

(a)   practices are in place, and will remain in place, at the licensed premises that ensure as far as reasonably practicable that liquor is sold, supplied or served responsibly on the premises and that all reasonable steps are taken to prevent intoxication on the premises, and

(b)   the extended trading period will not result in the frequent undue disturbance of the quiet and good order of the neighbourhood of the licensed premises.

15. Subclause 34(6) of the Gaming Machines Regulation2019 (NSW) defines ‘local community’ for the purpose of subclause 34(5) of the Regulation as:

"local community" comprises the following--

(a)   the people in the area (or in the group) from which the persons using the services and facilities of the venue concerned are likely to be drawn,

(b)   the people in the area (or in the group)--

(i)   that is to derive, or that the Authority considers is likely to derive, social or economic benefit if the threshold increase application is approved, or

(ii)   that is to suffer, or that the Authority considers is likely to suffer, social or economic detriment if the threshold increase application is approved.

Guidelines published by the Authority

16. The Respondent has published Guidelines to explain the procedure and the considerations relevant to its approval process and the Tribunal has had regard to them in relation to this matter: S64(4) of the Administrative Decisions Review Act 1997.

Guideline 6

17. Guideline 6 sets out information required in relation to a proposed liquor licence as well as matters the Authority must consider in determining whether it is satisfied that the overall social impact of the licence, authorisation or approval sought will not be detrimental to the well-being of the local or broader community, repeating s 48(5) of the Act.

18. Other matters which must be considered include:

1. the type of proposed licensed premises;

2. the scale of the proposed licensed premises;

3. the trading hours of the proposed licensed premises;

4. the location of the proposed licensed premises; and,

5. whether any specific measures, over and above those required by legislation, will be implemented at the proposed licensed premises.

19. The Guideline also outlines matters which may be considered, such as:

1. recent crime statistics,

2. analysis and data from Australian Bureau of Statistics and Socio Economic Index for Areas (SEIFA) data,

3. research regarding demographic indicia in relation to alcohol-related harm, and

4. relevant information about alcohol related road accidents and health data.

20. The Guideline refers to numerous community concerns or negatives relating to a proposed licensed premise or to an ETA including:

1. Undue disturbance to the neighbourhood,

2. Alcohol-related anti-social behaviour or crime,

3. Alcohol-related hospitalisation and health problems,

4. Road safety.

21. Some examples of benefits of a proposed licensed premise or an ETA include:

1. Increased social and recreational opportunities,

2. Addressing a shortage of entertainment venues in the relevant local or broader community,

3. Increased employment and economic activity, and

4. Other benefits to consumers.

Guideline 12

22. Guideline 12 applies to applications for increases to gaming machines which is not directly relevant to these proceedings, however the applicant referred to this Guideline in explaining how the Authority classified geographical boundaries and in regard to determining the meaning of ‘local community’ for the purpose of s48(5) of the Act.

23. An SA2 is a geographical boundary determined by the Australian Bureau of Statistics (ABS). Each SA2 is classified by the Authority into one of three Bands based on three measures:

1. Socio-Economic Indexes for Area (SEIFA) data,

2. gaming machine expenditure, and

3. number of gaming machines per capita.

24. SA2s are ranked into Bands. The bottom 20 percent of SA2s are those with the highest levels of socio-economic disadvantage. These are classified as Band 3 (high risk). The next 30 percent are classified as Band 2 (medium risk) and the remaining 50 percent are classified as Band 1 (low risk).

25. The Guideline describes a ‘local community’ as comprising of:

1. The people in the area (or group) from which persons using the services and facilities of the venue are likely to be drawn,

2. the people in the area (or group)

1. that is to derive or is likely to derive social or economic benefit if the threshold increase is approved or

2. that is to suffer or is likely to suffer social or economic detriment if the threshold. Increase is approved.   

26. The Guideline describes the concept of ‘responsible gambling’ as a broad one:

…gambling is a legitimate, lawful and regulated activity in NSW… there are benefits associated with gambling activities, but also that gambling can cause personal and social harms. Activities that promote responsible gambling include those which seek to:

Enable persons to make informed decisions about their participation in gambling

Minimise the potential for, and incidents of, harm associated with gambling, and

Reduce the incidence and prevalence of problem gambling.

Guideline 16

27. The Authority has produced Guideline 16 – Late-night gaming applications. Guideline 16 applies to availability of gaming machines after 12 midnight at a venue located in Band 3 SA2, or after 2 am at any venue.

28. The Guideline states that:

There is a growing evidence base that shows that: a late night gaming machine shutdown period is more likely to impact problem gamblers than moderate or low risk gamblers. More than half of problem gamblers would choose to go home following EGMs shutting down at a venue, rather than migrate to another venue.

29. When considering which course of action best serves the responsible development of the gaming machine industry, it is appropriate to consider issues including:

1. ‘problem’ and ‘at risk’ gamblers,

2. extent of the trading hours past midnight, especially during the higher-risk post 2.00am period, and

3. socio-economic disadvantage.

30. The Guideline also states that venues that have proposed to implement strategies to prevent and reduce gambling harm beyond the minimum legislative requirements would be looked on more favourably by the Authority.

The evidence

31. The applicant provided seven affidavits. Leigh Barrett, a consultant practicing in the gambling industry and Adam Purcell who provided covert surveillance around the Hotel, each provided affidavits. The applicant also filed two affidavits from Mr Smith-Lights who is the current manager at the Hotel. The applicant also relied on the affidavit of Mr Crozier who is a manager at Matsal Investment group of companies and on two affidavits from Mr Hatzis, the applicant’s instructing solicitor.

32. The respondent filed documents pursuant to s 58 of the Administrative Decisions Review Act 1997 (NSW), and an affidavit of Inspector Vescio. Both parties filed a number of additional documents and material throughout the hearing.

Identification of the local and broader community

33. The Hotel is located in South Western Sydney in an industrial area in Wetherill Park Industrial which falls within the Fairfield Local Government Area (LGA). Wetherill Park Industrial is surrounded by the suburbs of Horsley Park, Abbotsbury, Bossley Park, Prairiewood and Smithfield. There are 27 suburbs in the Fairfield LGA.

34. Fairfield LGA was nominated as a vulnerable area for the purposes of gaming harm during the 2018 changes to the Gaming Machines Act 2001 (NSW). It is the only LGA in NSW that is subject to a specific cap on gaming machines.

35. Section 48(3) of the Act requires the Tribunal to consider the Community Impact Statement (CIS). The Guideline indicate that a CIS requires the applicant to identify community buildings, facilities or areas located near the licensed premises. The CIS form explains that this is required ‘to better understand the local community’. The applicant identified an occupational health practice, and an educational centre in Wetherill Park. Both facilities are outside the Wetherill Park industrial area but within the suburb of Wetherill Park.

36. The CIS form also required the applicant to identify local Aboriginal community in the area along with any organisations providing gambling related counselling or treatment services. The applicant identified the Deerubbin Local Aboriginal Land Council and the Gandangara Local Aboriginal Land Council; they also noted the Vietnamese Community in Australia, Uniting Care Mental Health – South West Sydney, Wesley Community Services – South West Sydney, and the Arab Council Australia Inc. South Western Sydney.

37. The Authority considered the ‘local community’ to be the community within the suburb of Wetherill Park, and the ‘broader community’ to be the LGA of Fairfield.

38. The applicant submits that the ‘local community’ is workers who are employed in the industrial area, and that the ‘broader community might be said to take in the small number of additional persons who also reside in the industrial area.’ According to the 2016 Census referred to in the affidavit of Mr Hatzis, only 35 persons resided in the Wetherill Park Industrial area.

39. The applicant submitted that the Tribunal should determine the overall social impact by reference to benefits and disadvantages of the ETA upon that ‘community of workers’.

40. The applicant submitted that the local area was a ‘Statistical Area Level 2’ as defined by the Australian Bureau of Statistics:

Statistical Areas Level 2 (SA2) are medium-sized general purpose areas build up from whole Statistical Areas Level 1. Their purpose is to represent a community that interacts together socially and economically. There are 2310 SA2 regions covering the whole of Australia without gaps or overlaps.

41. The applicant suggested that it is more appropriate in this case to consider the ‘local community’ as the industrial area, and not the suburb, of Wetherill Park because persons at either end of the larger area would not necessarily interact with one another or identify with each other as members of the same community but were connected because they were patrons of the Hotel.

42. The applicant pointed out that s 36(3) of the Gaming Machines Act 2001, cls 34(5)(6) of the Gaming Machines Regulation 2019 and the Independent Liquor and Gaming Authority Guideline 12 pp 4 and 7 use the SA2 as best representing a ‘local community’.

43. Subclause 34(1) refers to the local statistical area in which the venue is situated as well as the names of other local statistical areas within 5km of the venue. It requires a map of 1 km radius showing other licensed premises, any schools, hospitals or places of public worship, and any sporting or community facility.

41. The applicant submitted that for the purposes of s48(5) of the Act the terms ‘local community’ and ‘broader community’ in any given case must be determined as a question of fact; Smith v Independent Liqueur and Gaming Authority [2018] NSWCATAD 224 (Smith) at [28] and are not confined to a ‘geographic’ definition. The respondent did not submit otherwise.

42. In support of its submission the applicant referred to the object of s 48(5) of the Act, which is to have regard to the ‘overall social impact’ and employs the use of the word ‘community’ as opposed to other words such as ‘region’ or ‘area’.

43. The applicant submitted that in determining the local and broader community, weight must be given to the fact that the Hotel is located in an industrial area, and that about 50 percent of patrons, as evidenced in the petition, reside in the Fairfield LGA.

44. The applicant submitted that the ‘local community’ was the workers employed in the industrial complex, and that the ‘broader community’ was the additional residents of the Wetherill Park Industrial area. They argued that the Tribunal in determining the ‘overall social impact’ should do so by reference to benefits and disbenefits of the ETA upon that ‘community of workers.’

45. In response to the applicant’s submissions, the respondent submits that its submissions are contrary to the evidence offered by the respondent that some of the patrons of the Hotel are drawn from the Smithfield industrial area in the adjoining suburb of Smithfield, and that about 50 percent of the patrons are from the broader Fairfield LGA and the remaining 50 percent of the patrons are from outside the Fairfield LGA.

46. The respondent submitted that the applicant’s definitions of local, and broader, community created an ‘artificial boundary’ and that the broader community must be wider than the Wetherill Park Industrial area. The respondent drew attention to the small number of persons residing in the suburb (based on the evidence from Mr Hatzis) and also to the data indicating that about 50 percent of the signatories of the petition proffered by the applicant came from the Fairfield LGA (based on the evidence from Mr Light-Smith).

47. The parties agreed that the patrons are substantially shift workers from the industrial area and that about 50 percent of them reside outside the Fairfield LGA.

48. SEIFA data (2016 census) indicates that the resident population of Wetherill Park is ‘relatively disadvantaged’ and that the resident population of the Fairfield LGA is ‘highly disadvantaged’, due to higher than average levels of unemployment. Wetherill Park households fall within the bottom 36 percent of Australian household income, while households in Fairfield LGA fall within the bottom six percent.

Alcohol consumption and alcohol related crime

52. The health statistics indicate that alcohol consumption, rates of crime, alcohol attributable hospitalisation and related deaths are relatively low in the Fairfield LGA compared to other LGAs in NSW.

53. NSW Department of Health data indicates that Fairfield LGA recorded a lower than average level of alcohol-attributable deaths and hospitalisation.

54. The Bureau of Crime Statistics and Research (BOCSAR) data demonstrates relatively low number of police Incidence reports associated with the Hotel. Both the suburb of Wetherill Park and the Fairfield LGA recorded lower than average rates of alcohol-related assault and alcohol-related disorderly conduct.

55. Compared to the NSW state average Wetherill Park and the Fairfield LGA have a lower saturation of hotel licences and late-trading outlets and a lower clustering of hotel licences and late-trading outlets. Wetherill Park has a lower clustering of licenced premises but a higher saturation of licenced premises.

Gambling in the local area

56. The Hotel is the only licenced venue in Wetherill Park, however there are numerous others within a 10 km radius. The nearest two venues to the Hotel are Club Marconi about 2.5 kms, and the Greenfield Hotel about 3kms, away from the Hotel.

57. The Fairfield LGA is ‘saturated’ with electronic gaming machines (EGMs). The respondent referred to the NSW Gambling Survey 2019 which showed that South Western Local Health District had higher rates of at risk gaming compared to the NSW state average.

58. The Hotel is in the SA2 area which is classified as a Band 2 area for the purposes of the Gaming Machines Act 2001 (NSW). There are five adjoining areas. Smithfield-Wetherill Park is classified as Band 3 (high risk), Bossley Park Abbotsbury as Band 2 (medium risk) and Horsley Park-Kemps Creek, Prospect Reservoir and Greystanes – Pemulwuy are deemed Band 1 (low risk).

59. The evidence about gaming machine profits relied on by the respondent indicates that the local and broader community have a very high comparative use of EGMs and one of the highest gaming machine profits of all LGAs in the State.

60. The venues closest to the Hotel in the Fairfield LGA, and their opening hours, include:

1. Smithfield Tavern – Monday to Saturday until 3.00am, Sunday until 10pm;

2. Canley Heights Hotel – Sunday to Thursday until 3.00am, Friday to Saturday until 6am – 25 EGMs;

3. Greenfield Hotel – Monday to Thursday until 4.00am, Friday to Saturday until 6.00am, Sunday until midnight – 30 EGMs;

4. Brown Jug Inn – Monday to Saturday until 3.00am, Sunday until 10pm;

5. El Cortez Hotel – 6.00am – 30 EGMs;

6. Greystanes Hotel – 1.30am – 30 EGMs.

61. One Hotel in the vicinity, Horsley Park Hotel operated until midnight and had 15 EGMs.

62. Clubs in the Fairfield LGA had a vastly larger number of EGMs along with longer opening hours up to 5.00am; Marconi Club: 378, St John’s Park Bowling Club: approximately 398, Smithfield RSL Club approximately 325.

Views of Police

63. The NSW Police Force objected to the application. It raised concerns about the lack of public transport after 1.00am, the increased risk of driving under the influence of alcohol, the potential increase in risk of crime, and the exacerbation of problem gambling.

64. The NSW Police Force relied on data from 2017-2019 indicating that in that period there were 12 recorded incidents of patrons leaving driving under the influence of alcohol subsequent to leaving the Hotel.

Views of the Area Health Service

65. The South Western Local Health District (SWSLHD) objected to the application. It raised concerns about increased alcohol consumption, alcohol related assault, physical and psychological health detriments, problem gambling and high licence density in the Fairfield LGA.

66. SWSLHD pointed to the relationship between alcohol consumption and gambling, and the increased risk of harm particularly during late hours. SWSLHD submitted that the Hotel was already making a very high net profit from gaming machines and that the ETA if granted would most likely increase gaming machine profits. Furthermore, if approved the ETA would contribute to increased gambling related harm in the area including financial harm, relationship disruption, conflict or breakdown, emotional or psychological distress, cultural harm, reduced performance at work or study, criminal activity, and life course or intergenerational harm (Langham E, Thorne H, Browne M (2015) Understanding gambling related harm: a proposed definition, conceptual framework, and taxonomy of harms. BMC Public Health;16 (80)).

Research on Gambling

67. The respondent relied on research findings that:

1. One percent of NSW population are problem gamblers, accounting for 36.7 percent of gambling expenditure (Browne et al, NSW Gambling Survey 2019, revised March 2020, pp. ii-iii);

2. Moderate risk and problem gambling was higher among unemployed gamblers (Browne et al, NSW Gambling Survey 2019, revised March 2020, pp. iii);

3. High-risk gamblers are significantly more likely to gamble after midnight and to be gambling for longer periods (Productivity Commission Inquiry Report Gambling, No 50, 26 February 2010, pp 30-31).

68. Mr Barrett, a consultant, gave evidence as a responsible gambling expert. Mr Barrett referred to a study by Hing and Haw (Hing N and Haw J 2010 ‘The influence of venue characteristics on a player’s decision to attend a gambling venue’, Centre for Gambling Education and Research Southern Cross University Tamworth) that found that problem gamblers prefer the ‘glitz and glamour emulating Las Vegas’.

69. Mr Barrett disputed that problem gambling was highest among unemployed persons and asserted that problem gambling was highest among low paid workers.

70. Mr Barrett relied on research by Rockloff (Rockloff M J 2010 “The impact of an audience and venue size on poker machine gambling’ Department of Justice Victoria) that problem gamblers tend to favour larger venues that can allow them to remain anonymous ‘yet thrive on the presence of an audience to encourage gambling’.

Location and operation of the Hotel

71. The Hotel is located within the industrial area of Wetherill Park. The nearest residence is located more than 800 metres away from the Hotel. The industrial area is zoned by the Fairfield City Council as ‘general industrial’. The objective of this zoning is to provide a wide range of industrial and warehouse land uses.

72. The Fairfield City Council website stated that:

The Smithfield-Weatherill Park Industrial Estate is one of the largest in the Southern Hemisphere…. The industrial area is home to nearly 3 000 businesses and 20 000 jobs.

73. The industrial area is predominantly comprised of manufacturing, construction, wholesale trade, transport, postal and warehousing types of businesses.

74. Mr Vescio’s evidence was that:

The industrial area includes a wide array of different businesses, including service stations, freight companies, producers, recyclers and other mixed use industrial businesses. The area includes a mixture of large scale industrial premises and smaller industrial unit complexes.

75. The Hotel primarily serves those industrial premises which surround the Hotel and operate on a basis of 24 hours 7 days a week. Patrons are primarily workers from the industrial premises located in the vicinity of the Hotel.

76. The Hotel is a single story building comprising of the main bar area with large television screens, two pool tables, TAB betting services and seating for about 50 to 60 patrons, a gaming room and an outside terrace area.

77. Both Mr Purcell and Mr Vescio observed patron numbers in the sports bar and the gaming room.

78. Mr Purcell’s evidence is in regard to November and December 2021. His observations were taken at 10pm, 10.30pm, 11.00pm and 11.30pm. The attendance at the Hotel reduced after 10.30pm.

79. On Friday night there was substantially more patrons in the sports bar compared to the gaming room and this was reversed on the Monday night. On the Wednesday and Saturday night, more of the patrons were in the gaming room from 11pm.

80. Mr Vescio’s evidence is in regard to February 2022. He and other inspectors undertook observations at 9.45pm, 10.30pm, 11.00pm and at 11.30pm on Friday, Saturday, Monday and Wednesday evenings. For the four evenings, the patron numbers reduced as the evening wore on. The busiest time at the Hotel was at the earliest time observed apart from one of the evenings which had one extra person at 10.30pm (at 9.45pm 12 patrons were present and at 10.30pm 13 persons were present.)

81. Apart from Saturday evening, the significant majority of the patrons were in the gaming room. Observations made by Mr Vescio and Mr Purcell indicate that the significant majority of the patrons at the Hotel at closing time are gaming patrons.

82. The food offerings at the Hotel are pre-prepared and heated on order at the bar. These included food items including pizzas, fish and chips, meatballs and chips and other pre-prepared hot snack items. The pizza bases are pre-prepared. There are four different types of pizzas and they are made to order by bar staff.

83. Mr Purcell’s evidence was that he ordered a meat pie and was told by a Hotel employee that he was not required to pay for it because he intended to gamble on the gaming machines.

84. In paragraph 41 of Mr Vesscio’s affidavit, it is stated that an inspector was informed by an employee of the Hotel that food service ceases at 10.30pm. Mr Smith-Light’s evidence was that this was not the case and that hot food is available for order at any time.

85. Mr Vescio’s evidence was that on Monday 14 February 2022, about 30 percent of the businesses in the vicinity were open at 10.25pm. After midnight, one of the inspectors observed three separate warehouses, and other businesses open after midnight. A number of heavy vehicles were being refuelled about 600 metres from the Hotel. It was noted that some large scale businesses were operating after 10.00pm on weeknights on Franks street, which is not in the immediate vicinity of the Hotel.

86. Mr Crozier drove around the Smithfield and Wetherill Park Industrial area on Thursday 11 March 2021 from 11.00pm to 2.30am and observed that over 70 businesses ‘that appeared to be open and operating’. During cross examination, Mr Crozier agreed that some of those businesses may have had lights on for security purposes but were not in fact operating and open at this time. Mr Crozier’s evidence also did not make clear whether some of those businesses may have shut down by midnight.

87. Mr Purcell who like Mr Vescio conducted the investigation over four evenings, noted that the majority of the patrons seemed to be from businesses within the industrial area. He observed that the sparse number of patrons on Saturday evening reflected that there was less business operating on the weekend. Mr Purcell observed that a number of people were seen arriving for short periods only and abstaining from drinking alcohol which indicated to him that these patrons may have been on meal breaks before returning to work.

88. Both Mr Purcell and Mr Vescio observed that nearly all patrons arrived and left the Hotel in private vehicles.

Alcohol consumption at the Hotel

89. No concerns were raised in regard to alcohol consumption at the Hotel in the past. The Hotel is not located in or near any crime hotspot. The crime rate including incidents of domestic violence flagged as alcohol-related are lower in the Fairfield LGA than in NSW overall. Outlet clustering and outlet saturation is also lower in the Fairfield LGA compared to the NSW overall data.

90. The applicant identified a number of alcohol related harm minimisation measures and controls to address potential issues arising during the proposed late trading period to be implemented in the Venue Management Plan (VMP). These included the following proposed licence conditions:

1. No jugs to be sold;

2. No shots, doubles or very high strength drinks;

3. No ready to drink, pre-mixed drinks after 1.00am;

4. No more than one alcoholic drink per person per order after midnight;

5. No more that 4 alcoholic drinks or contents of one bottle of wine sold or supplied to the same person; and

6. To encourage use of designated driver arrangements, designated drivers are offered free coffee and soft drinks at all times.

91. The applicant proposed a courtesy bus service to bus stops and train station from 5.00 pm to 2.00 am on Wednesday to Saturday nights. On Saturdays the service hours would extend to 4.00 am.

92. Bus services close to the Hotel operate up to 1.43 am Monday to Friday. On Saturdays, the service operates up to 2.11 am. On Sundays and public holidays, it operates up to 1.11 am.

Views of Hotel Patrons

93. A petition signed by 103 persons supporting the extension of the trading hours was attached to the affidavit of Mr Smith-Light. The petition refers to a lack of other venues in near proximity to the Hotel and the desire for approval of the ETA. About 50 percent of those who signed the petition did not reside in the Fairfield LGA.

94. The applicant also relied on ten letters of support for the ETA from local business people and patrons. A number of persons wrote that their businesses operated on a 24 hour basis and stated that their staff would benefit from having a local place where they could socialise and purchase a hot meal after finishing work or during work breaks.

95. Mr Smith-Light’s evidence was that almost all patrons are workers in the industrial area and many of these people work shifts and that some continue to other hotels and clubs in the local area when the Hotel closes. Some of these destinations are the Marconi Club, the Greenfield Hotel and the Smithfield Hotel.

96. Mr Smith-Light stated that he spoke with a number of patrons, particularly those that come to the Hotel late at night, and many of these people told him that they work shifts at different times of the day and night at businesses near the Hotel. Mr Smith-Light stated ‘almost all patrons of the Hotel are workers in the Wetherill Park Industrial area, who come after finishing their shift’.

97. The applicant submitted that the granting ETA would better meet the needs of persons working in the industrial area and surrounds.

Gaming at the Hotel

98. The Hotel had 19 gaming machines. The revenue figures showed that income from gaming machines was ($256K/machine/annum) comprising 84 percent of the total revenue. This is lower than that for Fairfield LGA ($288K/machine/annum) however it was more than three times that of the average for comparable metropolitan hotels of the same size ($65K/machine/annum).

99. The Hotel submitted that there is no evidence before the Tribunal to demonstrate that there has been problem gambling at the Hotel or that the approval of the ETA would lead to problematic gambling at the Hotel. In fact, according to the Hotel’s submission, patrons would receive better support and assistance at the Hotel as compared to other hotels and clubs as its patrons are well known to staff and the gaming area is comparatively small.

100. The closest Hotels and Clubs to the Hotel are licensed to trade much later than the Hotel and have larger numbers of gaming machines. Club Marconi trades until 4 am Sunday to Thursday and to 6 am on Friday to Saturday and operates 59 gaming machines. Greenfield Hotel trades until 4 am Monday to Thursday and to 6 am on Friday to Saturday and to midnight on Sunday and operates 30 gaming machines.

101. The applicant has developed a Gaming Plan of Management (GPOM) which included measures recommended by the Office of Responsible Gaming as well as measures over and above these recommendations. The applicant has consented to the imposition of a GPOM condition being imposed on the licence. The GPOM would be implemented from Monday to Sunday: midday to 4.00am and on Sunday from 10.00pm to midnight.

102. The GPOM states that:

A minimum of two staff members will be present in the gaming room, who will report to a duty manager. The staff members will be required to circulate (sic) the gaming room routinely throughout peak and shoulder trading times. This practise will ensure staff members regularly engage with patrons and will have the opportunity to make observations for problem gambling signs and develop relationships with those patrons present. Any sign of problem gambling observed is to be relayed to the duty manager and logged in the gaming incident report logbook.

103. The GPOM requires the applicant to:

1. Provide staff with additional training and resources, this includes:

1. Regular in-house training on policies and procedures;

2. Training and resources on the signs of risky and problematic gambling behaviour; and

3. Communication skills training to support staff to approach patrons identified as at risk.

2. Support staff to identify and assist patrons by having a presence of supervisors in the gaming room, documenting issues reported, having structured systems for staff to do welfare checks, encourage breaks and suggest alternatives to gambling and increasing these measures after midnight.

3. Create a strong culture of gambling harm minimisation.

4. Encourage breaks in play.

5. Promote local support services.

6. Break down stigma associated with gambling problems.

104. The Hotel as per the GPOM proposes to implement strategies beyond the minimum legislative requirements. These include:

1. Communication skills training to support staff to approach patrons identified as problematic and/or at risk.

2. Not provide food or drink service at gaming machines.

3. Appoint dedicated staff to provide specialist responsible gambling support to staff and patrons.

4. Training or resources on the signs of risky and problematic gambling behaviour.

105. The Authority acknowledges that the GPOM somewhat mitigates the risk of gaming-related harm as it includes a number of intermediate and advanced level harm minimisation strategies from the Office of Responsible Gambling’s ‘Going above and beyond – Responsible conduct of gambling for venues’, NSW Government 2000.

106. However overall, the Authority is of the view that the numerous gambling risk factors and the overall economic vulnerability of the local and broader community are not sufficiently mitigated by the harm minimisation measures proposed by the applicant.

107. Mr Barrett’s evidence is that gambling can be better monitored at the Hotel because the number of the gambling machines in the Hotel is lower as compared to the other locations in close vicinity as set out in paragraph 60 and 62.

Migration of patrons

108. Mr Vescio, and Mr Purcell conducted investigations regarding the interior of the Hotel, particularly the gaming area and the migration of patrons to other venues once the Hotel closed.

109. Mr Vescio, an Inspector employed by the Authority provided a comprehensive report in regard to observations made over four days by a group of inspectors.

110. There is conflicting evidence before the Tribunal as to whether there is any, and the extent to which there is, ‘patron migration’ from the Hotel to other Hotels and Clubs at closing time.

111. Mr Vescio’s team of inspectors tailgated 13 cars on leaving the Hotel and none of those cars drove to other licenced venues. His team of inspectors observed ten gaming patrons on Friday at 11.30pm, seven gaming patrons on Saturday night, five gaming patrons on Monday night and one gaming patron on Wednesday night.

112. Mr Purcell did observe a number of the Hotel’s patrons at the Greenfield Hotel and Club Marconi, both about 3.5 km away from the Hotel, after midnight. Two persons migrated from the ten persons in the Hotel’s gaming room, this being 20 percent migration on Friday evening; one person migrated from seven persons in the gaming room - 14 percent migration on Wednesday evening, ine person migrated from two persons in the gaming room - 50 percent migration on Saturday evening, and four persons migrated from seven persons in the gaming room - 57 percent migration on Monday evening.

113. The respondent submitted that Hotel’s current closing hours provided a break from gambling as movement from one venue to another might lead to some interlude from gambling and, or alcohol consumption.

114. The Hotel contended that it is preferable for its patrons to stay at the Hotel where their behaviour can be observed by staff for a longer period, and that there is less risk of driving while under the influence of alcohol as the Hotel would be providing courtesy buses during some of the extended hours.

Sale of the business

115. The applicant submits that the imminent sale of the business is irrelevant as the current management may stay on and in any event the GMOP and the measures proposed are new measures that can equally be implemented by the new owners as by the current owners. The new owners would receive the ETA and licence, governed by the conditions, management plans and controls sought in this application.

116. The respondent submits that because of the new ownership the Tribunal cannot be confident as to who will be responsible for the Hotel’s day to day management, or of their experience and their compliance history in the hotel industry.

117. The respondent submits that the Tribunal should infer that the applicant’s application is made to generate revenue and not a desire to ‘better service its patrons’. The respondent pointed to the revenue generated by the applicant from the gaming machines, comprising 84 percent of total revenue.

Consideration

Identification of the local and broader community

118. The parties disagree about the identification of the local and broader community within the meaning of s 48(5) of the Act. However the parties are in agreement that the relevant ‘local community’ and ‘broader community’ in any given case is a question of fact. The following facts are in not in dispute:

1. The Hotel is situated in the Wetherill Park industrial area. It is zoned as industrial and there are no residential areas in proximity to the Hotel;

2. The Hotel is situated in the Fairfield LGA;

3. The patrons of the Hotel are predominantly employed as shift workers at the industrial area and to a lesser extent, as workers from the Smithfield industrial area;

4. The patrons of the Hotel in broadly equal numbers reside inside and outside of the Fairfield LGA.

119. It is not in dispute and I find that the Hotel is located in Wetherill Park Industrial Area and predominantly serves shift workers from the industrial areas located in the vicinity of the hotel. I am satisfied that some of the businesses in the industrial areas operate on the basis of 24 hours 7 days a week. I am also satisfied that about 50 percent of the patrons reside in the Fairfield LGA.

120. Based on the addresses provided in the petition, I find that the vast majority of the locations outside of the Fairfield LGA are in greater Sydney, predominantly in the South West Sydney.

121. I accept the applicant’s submission that based on the facts in this case, the term community is not limited to the geographical location of the Hotel but includes the characteristic of a person working at, or around, the industrial area of Wetherill Park who uses the services and facilities of the Hotel. However, I reject the applicant’s submission that the term community is confined to the characteristic of the person who patronise the Hotel. The term ‘local community’ has a broader meaning consistent with cl 34(6) of the Gaming Machines Regulation 2019 (NSW).

122. I reject the applicant’s submission that the broader community is limited to those persons living in the suburb of Wetherill Park Industrial (35 persons) as it in fact comprises a far smaller pool of persons to those working at the Wetherill Park industrial area (some 12 000 persons).

123. Based on these facts and consistent subclause 34(6) of the Gaming Machines Regulation 2019 (NSW) and Guideline 12, I find that the ‘local community’ within the meaning of s 48(5) of the Act is not limited to the geographical location to the Hotel. Local community, in this case also includes the group of persons performing work in and around the industrial area in Wetherill Park who use the services and facilities of the venue.

124. About 50 percent of the persons within the local community are drawn from the broader Fairfield LGA. These are the people who are likely to derive a benefit or a detriment as a result of an ETA.

125. The broader community is the Fairfield LGA as this is the geographical area in which the Hotel is located and this view is consistent with the guidance in Guideline 6.

126. The facts in this case demonstrate that the focus of the inquiry in determining whether there is detriment to the well-being of the local community is not confined to relying on an analysis of the demographics in the Fairfield LGA as these demographics do not take account of the fact that some people in the local community group under consideration are workers, who may not typify the average resident.

127. The identification of the local and broader community in question focuses attention on the people who use the services of the Hotel as well as people and organisations in the geographical area who do not use the facilities. The Tribunal must consider the likely social benefit or detriment to the persons within the local and broader communities.

128. Based on the evidence, the hotel’s local community are overwhelmingly people who are in some form of work. I find that this local community is not ‘significantly disadvantaged’. SEIFA data is based on areas and not individuals and indicates the average socio-economic characteristics of persons and households in the geographical area. The data takes into account the relatively high levels of unemployment in the Wetherill Park and Fairfield LGA which does not apply to the typical patrons who frequent the Hotel.

129. The applicant submitted that the Tribunal should find that the patrons of the Hotel are not low paid workers based on ABS data for Fairfield LGA and average payments for different types of employment. There is insufficient data to make a finding about the levels of income earned by the patrons. There was no evidence as to the demographics, mode of employment, that is whether employment was full time, part time or casual employment, whether persons were engaged as contractors or employees or the income levels earned by the patrons.

Findings

Positive social impacts

130. I accept that if the ETA is granted the applicant will be in a position to engage additional staff and provide opportunities for existing staff to work additional shifts.

131. I do not accept the applicant’s submission that taxation contributions and winnings from EGMs is an economic benefit as to do so would disregard the money individual patrons lose on EGMs, the amounts governments spend on crime prevention, health interventions, and the costs related to communities suffering as a result of alcohol and gambling addiction.

132. The most significant positive impact is for the local community to have access to a place in close proximity that serves hot food and a wide range of beverages where they can meet and socialise.

133. I accept there is evidence that some businesses at the industrial area are open past midnight and that some patrons who attend the Hotel seek to continue frequenting the Hotel past midnight. There is no evidence that persons may wish to frequent the Hotel between midnight and 4.00am Monday to Friday or after 10.00pm on Sundays because they finish work after the current closing hours.

134. Furthermore, based on the patron numbers counted by Mr Purcell and Mr Vescio, the evidence demonstrates that the Hotel is less popular with patrons after 10.30pm. This evidence is contrary to the applicant’s submission that there is a need by the local community for the Hotel to remain open until 4.00am from Monday to Friday and up to midnight on Sunday.

135. There is no specific evidence that patrons may be arriving at the Hotel after midnight as a result of them finishing a shift or during a break. It may well be that persons who work night shift would seek the facilities of the Hotel in the early morning.

Negative social impacts

136. I consider the negative social impact to be the risk of gaming related harms. The ETA if approved would result in an additional 24 hours of post-midnight gaming availability per week Monday to Saturday.

137. The Hotel is located in Band 2 SA2, a medium risk as to gaming machine density, expenditure and prevailing levels of relative socio-economic disadvantage. There are both high risk and low risk areas existing in the Fairfield LGA and both high risk and low risk suburbs adjoin the Wetherill Park Industrial area.

138. There are a significant number of venues in the Fairfield LGA that have late night gaming, post 2.00am with a large number of EGMs. The Hotel is relatively out of the way in an industrial zone. There is no evidence to suggest that persons who currently patronise other venues would migrate to the Hotel if the ETA was granted.

139. The Hotel has a relatively small number of gaming machines, 19 in total. Mr Barrett’s evidence that problem and at risk gamblers are less likely to be attracted to gambling at the Hotel because it gives them no anonymity and does not have a glitzy Las Vegas look due to the relatively small number of EGMs. This evidence was not significantly challenged by the respondent.

140. The respondent did not directly challenge Mr Barrett’s evidence that the Hotel is better placed to monitor and provide assistance to problem and at risk gamblers because of the measures proposed in the GPOM and the small size of the gaming room although the respondent pointed to the fact that the proposed measures had not yet been implemented.

141. I accept the evidence by the Productivity Commission Inquiry on Gambling that higher risk gamblers are significantly more likely than any other group to be gambling after midnight and to be playing for longer periods overall and that this risk is higher post 2.00 am.

142. There is clear evidence from the analysis conducted by Mr Purcell and Mr Vescio that a greater percentage of patrons are gambling as the evening continues. If the ETA is granted these patrons are likely to continue gambling.

143. Based on the evidence from Mr Purcell and Mr Vescio, only a small percentage of persons (if any) migrated to other venues. Even on Mr Purcell’s evidence, only a small number of patrons migrated to gamble elsewhere. I am not satisfied that there is substantial migration of patrons to surrounding clubs and hotels. I do not consider this to be a significant, important factor as it was in Bun v Independent Liquor and Gaming Authority [2020] NSWCATAD 60 (Bun). In Bun the evidence was that on Friday and Saturday nights, 75 percent of the gaming patrons were sighted at other gaming rooms. On Sunday the equivalent figure dropped to 50 percent.

144. I infer from the evidence that the patrons are more likely to stop gambling when the Hotel closes and not migrate to other venues such as the Greenfield Tavern and Marconi Club.

145. At closing time (currently midnight) over 50 percent of the patrons were gambling. I infer from this fact that many of those patrons would continue to gamble if the closing time was extended.

146. I accept that the GPOM goes some way to mitigate the risks for gambling related harm, however the fact remains that if the ETA was granted the majority of the patrons who gamble prior to the current closing time are likely to continue to engage in gambling.

147. Even with the conditions proposed, the Tribunal is satisfied that if granted, the ETA would lead to patrons gambling for longer during the higher risk period post-midnight. Taking into account the measures in the GPOM and the views of patrons does not sufficiently mitigate the risk of gambling harm to the patrons or to the broader Fairfield LGA community.

148. My overall conclusion is that the applicant’s proposed course does not serve the responsible development of the gaming machine industry as it will likely to lead to increased levels of problem gambling.

149. I am satisfied that the applicant has agreed to significant controls that are over and above the minimum standards regarding the service of alcohol and the address of problem gambling. However the harm minimisation and responsible gambling measures are not yet in place at the Hotel. The Tribunal has no evidence before it as to the impact of the proposed harm minimisation and responsible gambling measures set out in the GPOM.

150. The Tribunal observes that past practice at the Hotel is contrary to its stated policies that free food is not available to patrons gambling and that hot food is available for purchase up to closing time. As noted earlier, a free meat pie was offered to Mr Purcell on the basis that he intended to gamble and Mr Vescio’s evidence indicated he was informed by an employee that hot food was not available after 10.30 pm.

Conclusion

151. In determining this application, the Tribunal must consider the likely overall social impact of the ETA on the local and broader community, that is, it must weigh up the benefits and disbenefits to find whether there is a net benefit or detriment, as expressed in s48(5) an ‘overall social impact’. The Tribunal must make factual findings about whether the ETA, if approved, would be detrimental to the well-being of the local or broader community. In determining the application the Tribunal must consider the objects of the Act.

152. I have considered and weighed all the evidence. Section 3(1) and s 48(5) of the Act require the Tribunal to consider whether granting the ETA is in the public interest and to consider the overall social impact of the ETA to the well-being of the patrons of the Hotel and the Fairfield LGA more broadly.

153. Any extension of trading hours of a venue which serves alcohol and has EGMs will self-evidently lead to a greater number of people potentially consuming more alcohol and spending longer periods gambling. As such, any approved ETA will potentially lead to increased risk of social harms such as alcohol related crime and problem gambling and be detrimental to the well-being of the local or broader community. However, the Tribunal is not dealing with potential consequences. As this Tribunal has stated, it is necessary to identify objective facts and any available inferences so as to make factual findings as to the causation of social impacts: Kallin Pty Ltd v Independent Liquor and Gaming Authority [2019] NSWCATAD 36 at [138]; Smith at [25] and [31]; Bun at [73] and Bellesty and Anor v Director of Liquor and Gaming and Ors [2002] NSWSC 1102 at [147].

154. The detriment of the ETA is the social harm generated from gambling after midnight and particularly so after 2.00 am. I accept that problem gamblers and moderate risk gamblers are far more likely to be harmed by gambling after midnight, particularly after 2.00 am. I am satisfied that granting the ETA would lead to an irresponsible development of the availability of EGMs which is not consistent with the concept of ‘responsible gambling’.

155. The Tribunal is well satisfied that the overall social impact of the ETA, were it granted, will be detrimental to the well-being of the patrons of the Hotel and to that of the broader community of the Fairfield LGA. I am satisfied that the neither the positive social impacts nor the conditions proposed by the Hotel will sufficiently mitigate the negative contribution to the overall social impact.

156. After identifying and weighting the detriments and benefits to the well-being of the local or the broader community, the Tribunal is not satisfied “that the overall social impact of the licence ... will not be detrimental to the well-being of the local or broader community”: S48(5) the Act. Accordingly the ETA must not be granted and the decision under review should be affirmed.

Orders

157. The Tribunal makes the following Order:

1. The decision under review is affirmed.

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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 01 August 2022