The Minister for Casino, Gaming and Liquor Regulation has made provision for venue operators to request a variation to their payment terms for gaming machine entitlements that take effect on 16 August 2022.
The ‘request for variation to payment terms’ is designed to assist venue operators experiencing serious financial hardship and will 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 2 financial years
- detailed profit and loss statements for the previous 2 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) to postpone forfeiture for non-payment of amounts due on entitlements for up to 6 months where the venue operator would experience serious financial hardship if the Payment Agreement is not varied.
A variation to the Payment Agreement must not have the effect of postponing forfeiture by more than 6 months per variation.
A variation to the Payment Agreement will only be granted in cases of genuine serious financial hardship.
A variation to the Payment Agreement may:
- postpone forfeiture under the deferred payment scheme by up to 6 months per variation
- provide that the interest payable on the amount outstanding for entitlements will accrue as if the relevant entitlement instalment payments had been paid in accordance with the Payment Agreement
- waive the requirement to pay penalty interest on payments not made in accordance with the Payment Agreement.
A venue operator may make more than one request for a variation to the Payment Agreement over the term of the deferred payment scheme.
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 payment relief on multiple occasions 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 to pay the penalty interest, or
- the financial hardship experienced by the venue operator is of a temporary nature and financial recovery is expected within a reasonable period.
Who decides whether to grant a variation?
The Executive Director, Gaming and Liquor in the department is nominated by the Minister to determine requests to vary the Payment Agreement and authorised to enter into a Deed of Variation on behalf of the State (under section 3.1.6B of the Gambling Regulation Act 2003).
The department will:
- ensure that venue operator requests are considered in a timely, fair and non-biased manner and in accordance with these criteria and principles, and
- provide reports to the Minister on serious financial hardship requests and outcomes.
How to submit a request
Requests to vary the Payment Agreement should be submitted in writing, clearly outlining:
- the specific variation requested
- reasons for the request, and
- 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 aim to be submitted at least 3 weeks before the next instalment due date for which a variation of payment terms is sought to enable time for assessment of evidence and to make variations to Payment Agreements if necessary.
Requests should be emailed to email@example.com marked ‘Gaming machine entitlement payment variation request’.