The Minister for Consumer Affairs, Liquor, Gaming and Racing has made provision for venue operators to request a variation to their payment terms for gaming machine entitlements.
The request for variation to payment terms is designed to assist venue operators experiencing serious financial hardship and will be only be granted on a case-by-case basis in accordance with eligibility criteria outlined below.
Determining serious financial hardship
A venue operator must provide information to the department to evidence its claim of serious financial hardship. Information provided should include (but is not limited to):
- audited financial statements or full income tax returns for the previous two financial years
- detailed profit and loss statements for the previous two financial years
- details of the venue operator’s other loans and liabilities and payment schedules
- evidence of cash flow and assets including relevant bank statements
- information on all assets held by the venue operator
- information about any attempts by the venue operator to restructure or obtain finance from other sources.
A venue operator may request a variation to the Entitlement Related Agreement for Payment (Payment Agreement) where the venue operator would experience serious financial hardship if the payment agreement is not varied.
A variation to the payment agreement must not extend the deferred payment scheme by more than two years (for example payment for entitlements must be made in full no later than 28 February 2019 for club venue operators and 31 August 2018 for hotel venue operators).
A variation to the payment agreement will only be granted in cases of genuine serious financial hardship.
When will a variation not be granted?
Examples of where a variation to the Payment Agreement will generally not be granted include (but are not limited to) where a venue operator has:
- demonstrated financial evidence that it could continue operating at a net profit sufficient to meet its obligations to government;
- engaged in excessive and non-essential expenditure – which could be curtailed to meet its obligations to government;
- access to savings, other monetary investments or other significant income which could be used to meet its obligations to government by re-arranging finances, selling or drawing on non-essential assets (including unused gaming entitlements);
- equity in property or other assets, which could reasonably be used as collateral for a loan to finance the required payments, without causing any substantial erosion of that equity; or
- previously been granted long-term relief and was unable to trade out of difficulties – on the basis that the State should not support unviable businesses.
Requirement to pay penalty interest
Venue operators will generally not be required to pay penalty interest on variations granted because the venue operator is experiencing serious financial hardship.
However, at the discretion of the State, a venue operator may be required to pay penalty interest on all amounts not paid in accordance with the original deferred payment scheme.
The circumstances where penalty interest will generally be required include (but are not limited to) situations where:
- the venue operator is in the process of selling assets and the funds from those sales would enable it pay the penalty interest
- the financial hardship experienced by the venue operator is of a temporary nature and financial recovery is expected within a reasonable period.
Requests to waive penalty interest
A venue operator with an existing variation to the payment agreement can request a review of the penalty interest requirement.
A review of the penalty interest requirement for existing variations will have regard to the criteria for determining whether to impose a requirement to pay penalty interest specified above.
Penalty interest may be waived for existing variations where the payment of the penalty interest has not yet been made, including in circumstances where the penalty interest has accrued but not yet been paid by the venue operator.
Venue operators will not be able to request a refund on any penalty interest amount already paid to the State.
Who decides whether to grant a variation or penalty interest waiver?
The Executive Director, Liquor, Gaming and Racing in the department, is nominated by the minister to determine requests to vary the payment agreement and requests to waive penalty interest for existing variations.
The executive director is also authorised to enter into a Deed of Variation on behalf of the State (under section 3.4A.6 of the Gambling Regulation Act 2003).
The executive director will:
- ensure that venue operator requests are considered in a timely, fair and non-biased manner and in accordance with these criteria and principles
- provide a quarterly report to the minister on serious financial hardship requests and outcomes.
How to submit a request
Requests to vary the payment sgreement should be submitted in writing clearly outlining:
- the specific variation requested
- reasons for the request
- contact details for the person authorised to act on the venue operator’s behalf regarding the request.
Requests must include supporting information to evidence the venue operator’s claim of serious financial hardship.
Requests should be addressed to:
Executive Director – Liquor, Gaming and Racing
Office of Liquor, Gaming and Racing
PO Box 18055
MELBOURNE VIC 3000
For more information contact the Office of Liquor, Gaming and Racing on (03) 8684 1900.