This alert was originally emailed directly to all Hotel Licence holders on 12 May 2023.
Liquor & Gaming NSW (L&GNSW) has recently undertaken inspections focused on compliance with gaming harm-minimisation measures in the Gaming Machines Act 2001 (the Gaming Machines Act) including whether venues are operating in accordance with their primary purpose.
These inspections identified the following concerns:
The concerns relating to compliance with primary purpose requirements were identified both during and outside of the late trading period.
Section 15 of the Liquor Act 2007 (the Liquor Act) relevantly deals with the primary purpose for hotels.
This means that, except during any authorised trading period, gaming machines should not be operated unless the hotel is selling liquor by retail. If a hotel is only operating its gaming machines, or only operating the bar in the gaming room, it is not complying with its primary purpose. Clause 8(2)(g) of the Gaming Machines Regulation 2019 (the Regulation) also effectively requires that there be another operating bar elsewhere in the hotel.
The authorisation to sell liquor on a hotel premises does not apply unless the above two points are complied with. Selling or supplying liquor, or keeping a premises open for the sale or supply of liquor, without that authorisation is an offence that carries with it a maximum penalty of $11,000, imprisonment for 12 months, or both.
Clause 8(2) of the Regulation sets out the rules that apply to hotel gaming rooms, including that patrons must not be compelled to pass through the gaming room to enter or leave the hotel or to gain access to another part of the hotel.
Section 68 of the Gaming Machines Act requires that these rules be complied with, with breaches attracting a maximum penalty of $11,000.
Clause 28 of the Regulation requires that ATMs must not be located in a part of a hotel in which gaming machines are located.
L&GNSW interprets this provision broadly, and considers it applies to ATMs that are present in any area within a hotel where gaming machines are located. This means that the restriction on the placement of ATMs is not limited to those inside a gaming room, but may extend to areas outside of the gaming room itself depending on the layout of a hotel. A failure to comply with this requirement carries penalties of up to $5,500. For more information on this requirement, please refer to our Industry Alert of 31 August 2022.
L&GNSW has communicated with industry on several occasions about the importance of ensuring these fundamental gaming harm-minimisation requirements are being complied with.
L&GNSW is now escalating its enforcement approach, including by prosecuting offences and issuing statutory directions or using other administrative remedies to address instances of non-compliance.
Hotel licensees should urgently review their operations to ensure that their gambling harm-minimisation obligations are being met.
If you are unclear on the application of the legislation to your particular circumstances, you should seek independent legal advice or contact your peak body.
For more information on this requirement, please refer to our Industry Alert of 31 August 2022.
For further information on this industry alert, please contact us on 1300 024 720 or email compliance.info@liquorandgaming.nsw.gov.au
