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Gaming machine arrangements review - Terms of reference


In August 2012 the gaming operator duopoly was replaced with a new industry structure that allows approved clubs and hotels to own and operate their own gaming machines. A gaming venue operator must have a gaming machine entitlement for each gaming machine it operates in the venue.

The entitlements issued to clubs and hotels for the new industry structure expire on 15 August 2022. Before these entitlements expired, government needed to make decisions about:

  • whether to retain the venue operator model
  • whether to retain the current number of entitlements
  • whether to retain the split between club-hotel entitlements and metro-regional entitlements, and the maximum number of entitlements that can be held by a single operator
  • how to allocate new entitlements, if the entitlement system is maintained
  • entitlement payment options and tax arrangements
  • operation of the entitlement transfer market.

The Victorian Government will undertake a review of the current regulatory arrangements to enable it to make decisions on these matters well before the gaming machine entitlements expire in 2022. This will give government, industry and the community certainty about future industry arrangements and allow the government to make the decision to allocate any new entitlements as soon as feasible, having regard to the outcomes of the review.

Terms of Reference

The Gaming Machine Arrangements Review (review) considered the following matters:

  1. whether the gaming venue operator model has met its objectives
  2. whether the regulatory settings for the venue operator model should be retained (the 27,372 cap on the number of entitlements, 105 machine venue level cap, the 35 per cent ownership restriction, the requirement that 20 per cent of entitlements are used in non-metropolitan municipalities and that entitlements are divided equally between clubs and hotels)
  3. whether revenue from gaming is fairly distributed (the structure of gaming machine taxes and the tax differential between clubs and hotels, including how clubs demonstrate their community benefit)
  4. the appropriateness of the current 10-year term or whether entitlements should be issued for a longer fixed term or in perpetuity
  5. how any new entitlements should be allocated
  6. how the price of any new entitlements should be determined
  7. how and when entitlements should be paid for
  8. how the entitlement transfer market should operate.

How the review was conducted

The review was conducted by the Department of Justice and Regulation (DJR), in consultation with the Departments of Premier and Cabinet and Treasury and Finance.

The review incorporated consultation with industry, community and government stakeholders.

The review consists of two stages:

Stage one:  be a broad assessment of the performance of the venue operator model and whether it should continue, and a review of the regulatory settings for that model and any changes required (considering each of the matters outlined at 1 to 8 above).

Stage two: implementation of any reforms arising from Stage one of the review, including the allocation of new entitlements if the government decides to maintain the entitlement system.

Public consultation

A public Consultation Paper for the review was released by DJR in December 2015 and submissions closed in February 2016.

A total of 253 submissions were received in response to the Consultation Paper. Of these:

  • 175 were from individuals
  • 27 were from individual clubs
  • 18 were from local councils
  • 15 were from peak industry bodies
  • 11 were from hotel industry groups
  • 7 were from community groups.

Copies of the submissions can be viewed on Engage Victoria. Please note that personal details have been redacted.

Reporting and timing

Stage one of the review commenced in July 2015 and was expected to conclude, with a report and recommendations delivered to the Minister for Consumer Affairs, Gaming and Liquor Regulation in July 2016.

The timelines for Stage two will be determined after the completion of Stage one.

Responsible gambling and problem gambling policies

Responsible gambling and problem gambling policies will not be considered as part of the review.

However, the government will examine the existing harm minimisation measures alongside the review to ensure those measures are appropriate now and post-2022 having regard to emerging research and industry developments.

Further information

If you have any questions relating to the review, please contact the department by email

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Author: Department of Justice and Regulation
Publisher: Department of Justice and Regulation
Date of Publication: 2015
Copyright: State of Victoria, 2015.


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