INTRODUCTION... CHANGES TO LEGISLATION... GAMING LICENCES... APPROVAL OF PERSONS... MONITORING AND COMPLIANCE... TECHNICAL ISSUES...

Transcription

1 OFFICE OF THE LIQUOR AND GAMBLING COMMISSIONER GAMING MACHINES ACT 1992 ANNUAL REPORT

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3 CONTENTS INTRODUCTION CHANGES TO LEGISLATION..... GAMING LICENCES APPROVAL OF PERSONS... MONITORING AND COMPLIANCE TECHNICAL ISSUES.... PLAYER DISPUTES.... GAMING TAX.... ORGANISATION..... THANKS STATISTICS Table 1 Chart 1 Table 2 Chart 2 Table 3 Table 4 Table 5 Table 6 Table 7 Table 8 Chart 3 Table 9 Table 10 Table 11 Chart 4 Chart 5 Table 12 Table 13 Monthly gaming statistics 2001/2002 Gaming tax levied per month 2001/ Monthly gaming machine and venue installations 2001/ Monthly gaming machine and venue installations 2001/ Data by ABS Local Government Area (LGA) 2001/2002. Net Gambling Revenue to Gaming tax to Average net gambling revenue per machine per day to Average total net gambling revenue per day type.. Return to player to Average return to player % - 6 monthly since commencement of gaming. Live venues and machines to Number of clubs by machine range to 2002 Number of hotels by machine range to Growth in gaming venues... Growth in gaming machine installations Average growth in live machines to Manufacturer s share of gaming machine market to ORGANISATION CHART.... CONTACTS Appendix 1 Back Page 1

4 INTRODUCTION The Liquor and Gambling Commissioner is responsible for the administration of the Gaming Machines Act The Commissioner is responsible for regulating and monitoring the gaming industry to ensure the interests of patrons, gaming industry licensees, the community and the Government are protected. Section 5 of the Act provides that the Commissioner is responsible to the Independent Gambling Authority for the constant scrutiny of the operations under all licences under the Act. The Act establishes a structure in which all industry participants are licensed or approved to carry out specific roles in relation to the gaming machine industry in South Australia. The Commissioner is responsible for various functions including: determination of all applications for licences under the Act approval of persons in a position of authority, gaming machine managers, and gaming machine employees approval of agents of the State Supply Board approval of gaming machines, games and the central monitoring system approval of the number of machines per licensed premises and authorised hours of operation collection of gaming tax inspection, monitoring and scrutiny of gaming operations disciplinary action against licensees including the power to reprimand, suspend or revoke a licence review of barrings of persons by licensees Key Issues This year marked the 8th year of gaming machine operations in hotels and clubs. There has been an unprecedented number of changes to legislation, reflecting the changing environment and focus on the provision of responsible gambling. This reflects a national focus on harm minimisation and recognition of the problems excessive gambling causes in the community. As a consequence, an increasing amount of time and resources has been applied in dealing with these issues and I believe this trend is likely to continue. A number of initiatives have been introduced as a direct response to perceived problems in the gambling environment. However, it is my belief that changes to gambling legislation should be informed by appropriate research and study. This approach has been adopted by the Ministerial Council on Gambling which I mentioned in my last report. Considerable funding has been earmarked to conduct comprehensive research into a number of key areas identified by gambling jurisdictions throughout Australia and the Commonwealth Government and follows on from recommendations of the Productivity Commission s report on gambling. Support for Harm Minimisation Measures The Commissioner is represented on a number of National forums involved in the development of strategies to address problem gambling, harm minimisation and the responsible provision of gambling services. These include: Responsible Gambling Working Party Gambling Research Working Party (of the Ministerial Council on Gambling) The responsible gambling working party comprises representatives from all Australian States and Territories, the Commonwealth Government and New Zealand. While this is primarily an information sharing and data collection forum, the body also plays an important role in developing best practice approaches to a range of responsible gambling issues. 2

5 The Gambling Research Working Party is responsible for administering the gambling research program developed and approved by the Ministerial Council on Gambling. The current research priorities approved by the MINCO include: 1. National approach to definitions of problem gambling and consistent data collection 2. Feasibility and consequences of changes to gaming machine operation such as: pre-commitment or loss limits; phasing out note-acceptors; imposition of mandatory breaks in play; and the impact of linked jackpots; 3. Best approaches to early intervention and prevention to avoid problem gambling 4. Longitudinal study of problem gamblers and what policy measures would work for them (Major study of problem gamblers, including their profile, attitudes, gambling behaviour pattern and the impact of proposed policy measures on them). 5. Benchmarks and on-going monitoring studies to measure the impact and effectiveness of strategies introduced to reduce the extent and impact of problem gambling, including studies of services that exist to assist problem gamblers and how effective these services are My office has been actively involved in developing research briefs and specifications for these projects. It is my belief that a shared and coordinated approach to dealing with responsible gambling and harm minimisation issues is the most logical and effective way to develop sound policy solutions in this area. With the establishment of the Independent Gambling Authority the Government has established a body which in addition to having the power of inquiry also has a key responsibility in relation to the conduct of research. I anticipate that my Office will work very closely with the IGA in relation to these matters. CHANGES TO LEGISLATION As reported in my last annual report the Statutes Amendment (Gambling Regulation) Act 2001 was passed on 30 May During the following provisions commenced: Codes of Practice On 1 October 2001 the Responsible Gambling Code of Practice and the Advertising Code of Practice came into operation. These codes were gazetted by the Minister and reflect, in the main, the existing voluntary industry codes of practice. The Responsible Gambling Code of Practice now provides for clocks to be displayed in gaming areas players to be prevented from playing while intoxicated mandatory training requirements cheques not to be cashed in gaming areas Minimum Return to Player From 1 October 2001 any new games or machines installed must have a minimum return to player of 87.5%. For existing games installed prior to 1 October 2001, the previous minimum return of 85% applies. 3

6 ATM & EFTPOS withdrawal limits From 1 January 2001 licensees are not to provide ATM or EFTPOS facilities that are capable of allowing more than $200 per transaction per debit or credit card. Extensive discussions took place with the banking industry prior to this date to determine what changes to banking systems would be necessary to facilitate the ATM and EFTPOS limits imposed by the new legislation. All ATM facilities were able to meet the requirement by 1 January However, the application to EFTPOS facilities was not able to be met by all banks by 1 January Therefore, I directed all licensees to implement appropriate management procedures to ensure that transactions were not processed for an amount greater than $200, until such time as banks could comply. As at 30 June 2002, all banks except one had indicated that they had either already implemented the change or were in the process of doing so. The legislation also allows for the Commissioner to set a limit higher than $200 if there is good reason to do so. Factors such as the proximity of the venue to banks or other cash facilities are prime considerations and, during the period under review, I have dealt with approximately 50 of these applications. Generally, higher limits were only approved for venues in country areas where ready access to cash was not available from other financial institutions. Removal of Autoplay buttons From 1 January 2002 no machines are allowed to be fitted with an Autoplay button. The conversion program to remove Autoplay facilities from machines was completed prior to this date. Soon after the removal of Autoplay buttons, it was reported that a small number of players were circumventing this restriction by jamming play buttons. The then Minister for Gambling issued a media statement explaining that such activity is considered to be interfering with a gaming machine under the Act and penalties apply. At the same time, I notified manufacturers of my intention to amend the South Australian Appendix to the National Standard such that new machines and games will not be approved unless they prevent Autoplay by simply jamming play buttons :- Where Autoplay is prohibited, each play must be initiated by a distinct and separate activation of the player interface (e.g. play button or touch screen etc.) and the gaming machine must not allow a player to circumvent this requirement by external interference (e.g. holding down or jamming play buttons). I have also proposed that this provision be included in the next revision of the National Standard. This proposal will be discussed by industry at the annual Manufacturers Forum in August Approval of Games The Statutes Amendment (Gambling Regulation) Act 2001 amended the Gaming Machines Act 1992 to require that I now consider the impact of new games on problem gambling. Effective 1 October 2001, Section 40 (3) of the Act requires that I must refuse any application for approval of a game if, in my opinion, the game is likely to lead to an exacerbation of problem gambling. In considering such applications, I must also have regard to any guidelines issued by the Independent Gambling Authority. In an environment where there is little conclusive research to demonstrate which features of a game or machine are likely to lead to an exacerbation of problem gambling and without guidelines from the Authority, such a consideration is difficult and must be based primarily on a subjective, but reasonable, assessment. I have notified gaming machine dealers that until such time as meaningful research results become available and the Authority provides me with guidelines in respect of Section 40(2), I will assess applications on the basis that features, characteristics or qualities of games which existed in the market, prior to 1 October 2001 are unlikely to lead to an exacerbation of problem gambling. 4

7 The Authority has, since that notification, supported my approach to the approval of games pursuant to 40(3) until more significant guidelines have been issued. I directed advertising of two applications for approval of new games and both attracted an objection from No Pokies Campaign Inc. The applications are yet to be determined. Voluntary Barring A person may apply to the Independent Gambling Authority to bar himself or herself from the gaming area, or areas, of one or more specified premises. The IGA has issued a direction to all licensees requiring them to maintain copies of barring notices and photographs on the premises and to develop procedures to ensure that barred persons do not enter gaming areas or play gaming machines. My Office has developed appropriate procedures to monitor licensee s compliance with this direction. GAMING LICENCES GAMING MACHINE LICENCES A gaming machine licence authorises the holder to possess and operate gaming machines. The maximum number of gaming machines that a licence holder can possess and operate is 40. To be eligible to apply for a gaming machine licence a venue must hold either a hotel licence, club licence or a special circumstances licence (where that licence was granted on surrender of a hotel or club licence or is a major sporting venue or headquarters for a sporting code) under the Liquor Licensing Act As at 30 June 2002 there were 596 gaming machine licences granted. Of these, 592 licensees were operating gaming machines under the following categories of licence: 470 Hotels 84 Clubs 38 Special Circumstances GAMING MACHINE MONITOR LICENCE The gaming machine monitor licence authorises the holder to provide and operate an approved computer system for monitoring the operation of all gaming machines. The monitoring licence is held by the Independent Gaming Corporation Ltd (IGC) which is an incorporated body jointly owned by the Australian Hotels Association (SA) and the Licensed Clubs Association of SA Inc. Monitoring System The central computer monitoring system to which all gaming machines are connected is the prime source of control over the security, integrity and proper operation of gaming machines. The system also collects, processes and summarises gaming statistics for all venues and provides data to this Office for the assessment of gaming tax. System Upgrade During the year IGC modified the gaming machine monitoring system by installing the following software :- AGS Release 6.2 (July 2001) - A minor software update to address a small number of issues outstanding from the initial installation of AGS software. 5

8 Site Controller Rev H (August 2001) - IGC identified an infrequent problem with the previous versions of software which cause the Site Controller to enter a sequence of reset/recovery cycles. This would in turn cause significant communications problems for the gaming machines at the affected venue. Rev H, developed by VLC Inc. was installed to address this issue, however subsequent experience in the field has shown that the problem still exists. AGS Release 6.3 (April 2002) - This upgrade to the monitoring system allowed IGC to purge historical data, allowing the overall size of the system s database to be reduced and, as a result, improve overall system performance. Also included in this release were fixes to minor issues regarding batch poll command generation and a small number of Graphical User Interface (GUI) anomalies. All modifications to the monitoring system were subjected to extensive testing by VLC and IGC prior to my approval being given. Secure Internet Based Customer Reporting Facility During the year, IGC developed a reporting facility which allows gaming machine operators and manufacturers to access information and reports from the monitoring system via the Internet. For a small monthly fee, the facility allows operators to download formatted reports from the IGC s web site which provide gaming machine statistics and events for that venue. It also provides downloadable data which can be imported into other data management applications. The information obtained from the monitoring system via the Internet facility is used to fulfil some of the licensees record keeping obligations and in other cases supplements the data recorded at the venue. Development and testing of the system was completed late 2001 and approved on 13 December At 30 June 2002, there were 56 operators and 3 manufacturers utilising the new Secure Internet Based Customer Reporting Facility. Information Data Port The Information Data Port (IDP) facility was first approved in February This facility allows gaming machine operators to access machine information electronically via an interface to the SC300 Site Controller, reducing the need for manual meter reading. The number of IDP s in the field increased from 186 as at June 2001 to 207 as at 30 June Fees IGC charges an establishment fee for new gaming machine operators. This was maintained at $1,500 for 2001/02. A monitoring fee is charged for each gaming machine connected to the monitoring system and is charged at a monthly rate. Monitoring fees are the prime source of income for the IGC and must cover all the Corporation s costs. Monitoring fees are approved by the Treasurer and are reviewed on a regular basis. The Treasurer approved a monitoring fee of $37.40 per machine per month effective 1 July 2001 to 30 June This fee contained a GST amount of $3.40. The non-gst component represented a $2.18 per machine per month reduction from the previous year. Given the IGC s community service obligations such as its contribution to the Gambler s Rehabilitation Fund and its donation program, the monitoring fee is competitive. Over the last five financial years IGC Ltd has made 133 separate grants totalling $3.25 million to a wide range of South Australian charitable and community organisations. In 2001/02 IGC Ltd made 44 grants totalling $476,993. Gamblers Rehabilitation Fund During the reporting year, the Independent Gaming Corporation Ltd provided $1.5 million to the Gamblers Rehabilitation Fund which is administered by the Minister for Human Services. The government provided a further $800,000 from Consolidated funds. 6

9 Board Members The Directors of the Independent Gaming Corporation Ltd as at 30 June 2002 were: Mr Barry Francis Beazley - Chairman Mr Steven Ploubidis Mr Peter John Hurley - Deputy Chairman Mr William Cochrane Mr Colin Wayne Dunsford Mr Brett Matthews Mr Robin James Guy My Office continues to have an excellent working relationship with Independent Gaming Corporation s staff. GAMING MACHINE SUPPLIER S LICENCE The gaming machine supplier s licence authorises the holder, acting through an approved agent, to purchase from a licensed gaming machine dealer, and to sell or supply to the holder of a gaming machine licence, approved gaming machines, prescribed gaming machine components and gaming equipment. The gaming machine supplier s licence is held by the State Supply Board. As at 30 June 2002, the two approved agents of the Board were: James MacGuire John Leaton Harris GAMING MACHINE SERVICE LICENCE The gaming machine service licence authorises the licensee to install, service and repair approved gaming machines, prescribed gaming machine components and gaming equipment. The State Supply Board, as holder of the licence, has appointed approved agents to perform the work authorised under the licence. Getronics Australia Pty Ltd and AWA Gaming Services Pty Ltd (trading as Jupiters Gaming Services) are the Board s approved agents. Since I reported last year the following additional businesses, including persons in a position of authority and employees, were approved as subcontractors to the approved service agents to provide for the installation, service and repair of gaming machines in country areas: Getronics Australia Pty Ltd Murray Computer Office Shop Pty Ltd AWA Gaming Services Pty Ltd (trading as Jupiters Gaming Services) Myponga Electrical Services Shamrock Gaming Services The Independent Gaming Corporation Ltd is responsible for the service and maintenance of the central monitoring system. However, as a condition of the monitor licence, IGC Ltd is required to appoint sub-contractors for the installation, servicing and repair of the central processor hardware for the central monitoring system. Throughout the year the following sub-contractors have been approved to perform service and maintenance functions: Telstra Corporation Ltd Video Lotteries Consultants Inc Video Lotteries Technologies Inc Getronics Australia Pty Ltd AWA Gaming Services Pty Ltd (t/as Jupiters Gaming Services) IGA Technology Pty Ltd Iocane Pty Ltd IBM Ltd Computer Site Services 7

10 GAMING MACHINE DEALERS A gaming machine dealer s licence authorises the holder to manufacture gaming machines and prescribed gaming components and to sell or supply these to the Board or another gaming machine dealer. Since I last reported, the following gaming machine dealer s licence was granted: Universal De Desarrollos Electronicos SA There are 17 gaming machine dealer s licences granted as at 30 June Of these, 10 actively operate in South Australia. APPROVAL OF PERSONS As at 30 June 2002, a total of 7880 persons are approved under the Act. Persons approved include gaming machine managers, gaming machine employees, committee members of licensed clubs, directors and shareholders of licensee companies, agents of the Board, subcontractors and employees of the agent to the holder of the gaming machine service licence, employees and sub-contractors to the holder of the gaming machine monitor licence and in the case of a body corporate that holds a licence, any other person in a position to exercise or exert control or substantial influence over the body corporate in the conduct of its affairs. Training As part of the Responsible Gambling Code of Practice, mandatory training requirements were introduced for all persons approved as a gaming machine employee, gaming machine manager, director or committee member of a gaming machine venue. The licensee of the venue is responsible for ensuring that staff meet the training requirements. If a licensee can demonstrate that a director or committee member is not actively involved with the gaming operations of the business, I may exempt those persons from the training requirements. Training is required in two areas: operation of machines, and responsible gambling If a person s approval was granted prior to 1 January 2002 then training must have either already been undertaken, or must be completed by 1 October If the approval was granted after 1 January 2002 then training must be completed within 6 months of the approval. To ensure that the standard of training reflects the highest quality, I directed that training must be undertaken with a Registered Training Organisation which conducts the courses in line with national competency standards. Recognising that many staff have significant years of experience within the industry, I also directed that if a person can demonstrate that their existing knowledge, skills and experience are sufficient, they do not have to undertake further formal training. To assess a person s knowledge skills and experience, the person is required to complete a written assessment. The assessment was developed in close consultation with members of the training industry and the hotel and club industry. I thank those representatives who assisted in this process. The use of their time and resources was greatly appreciated. 8

11 MONITORING AND COMPLIANCE GAMING VENUES All gaming machine venues are inspected regularly for compliance with the provisions of the Gaming Machines Act 1992 and licence conditions. There are a number of matters which are routinely inspected and these include: ensuring that the layout of the gaming area conforms with the layout approved by the Commissioner ensuring that cash facilities are located outside of the designated gaming area ensuring that signage including warning notices to minors is prominently displayed ensuring that approved persons are wearing appropriate identification ensuring that the area is adequately supervised ensuring that gaming machine log books have been properly completed ensuring that copies of barring notices issued by the Independent Gambling Authority are kept on the premises and made available to staff and appropriate procedures have been developed Inspectors pay particular regard to any specific conditions that are attached to each gaming machine licence. In setting the inspection and compliance program, the Commissioner has regard to the compliance record of each venue and inspectorial resources are applied accordingly. Venues will be inspected for compliance with the new training requirements from 1 October I am extremely happy with the standard of South Australian venues and the level of compliance. MONITORING SYSTEM One of the main functions of the Office of the Liquor and Gambling Commissioner is to ensure that the operation, integrity and security of gaming machines is maintained at the highest standard. The primary tool in performing this function is the central monitoring system operated by the Independent Gaming Corporation Ltd. It is therefore imperative that the central monitoring system itself is subject to constant scrutiny. I must have total confidence in the integrity of the data produced by the system which I do. The system currently operated by the Independent Gaming Corporation Ltd is the VLC Advanced Gaming System (AGS). The imposition of licence conditions and the approval of procedures and policies ensure that there are sufficient internal and external security and audit controls. These controls ensure that any manipulation of the data collected and produced by the monitoring system will produce an auditable trail and that the software or hardware of the monitoring system can not be altered without my knowledge. 9

12 TECHNICAL ISSUES TESTING AND EVALUATION OF GAMING MACHINES Schedule 1(a) under the Gaming Machines Act provides that only approved gaming machines, games and prescribed components may operate in South Australia. Section 40 of the Act then gives the Commissioner the power to approve machines, games and equipment. Testing and evaluation of gaming machines has been conducted for me primarily by Gaming Laboratories Australia. However testing has also been undertaken by Technical Systems Testing Pty Ltd. In addition to the certification received from a qualified test laboratory that a gaming machine or game meets the South Australian Gaming Machine Technical Standards, the Independent Gaming Corporation provides a certificate attesting to the fact that the machine or game conforms to the monitoring system s communications protocol. As at 30 June 2002, 24 machines and 313 games are currently approved. A number of game approvals include more than one variation of the basic game, such as the return to player percentage, maximum bet and optional game features. The Office of the Liquor and Gambling Commissioner is currently convenor of a national working party for the assessment of testing laboratories. The working party reports to all participating regulators with recommendations of suitably qualified and experienced organisations for consideration as an Accredited Testing Facility (ATF). The aim is to provide a cooperative and coordinated approach to the assessment of testing facilities by the various gaming regulators of Australia and New Zealand. While accreditations will be issued by individual jurisdictions, the assessment process is conducted most efficiently by this cooperative arrangement. The first report of the Assessment Panel was issued to participating organisations in November South Australia issued accreditations to three organisations - Gaming Laboratories Australia, BMM International and Technical Systems Testing. In February 2001, the Assessment Panel conducted a review of the performance of the ATF s and the accreditation system in general. The panel issued its review report to participating regulators in September NATIONAL STANDARD FOR GAMING MACHINES South Australia continues to chair the Working Party on National Standards. Work has continued with other Australasian gaming jurisdictions to develop the uniform technical standard for gaming machines throughout Australia and New Zealand. The process of developing the National Standard has minimised the different requirements of each gaming jurisdiction. In developing the Standard the working party has consulted with gaming machine manufacturers, testing laboratories and other industry participants. The official mechanism for the amendment and development of the National Standard is the annual Manufacturer s and Operator s Forum which was held in Sydney in August 2001 and was jointly chaired by South Australia and New Zealand. Along with most other Australian and New Zealand regulators, I have adopted the latest Revision of the National Standard Revision 5.0, which will become effective on July 4, Manufacturers were notified in early 2002 of the impending change. As of July 4, all submissions of new gaming machines and games will be evaluated against the National Standards for Gaming Machines Version 5.0 plus the South Australian Appendix Version

13 PLAYER DISPUTES This Office continues to address a range of issues arising from the day to day conduct of gaming operations including the handling of complaints and the conduct of investigations arising from disputed gaming machine payouts. The nature of these matters varies from simple requests for information and clarification of the Gaming Machines Act through to more complex matters involving closer examination of both financial and technical information. A range of strategies are employed depending on the nature of the complaint: interviewing complainants or respondents confirmation of a game s history confirmation of events leading up to the dispute examination of financial and chronological data acquired from the central monitoring system testing of technical aspects of a particular game or machine any other actions deemed necessary Section 76 of the Gaming Machines Act 1992 states: A player who is aggrieved by a decision to have his or her winnings withheld may apply to the Commissioner for a review of the decision All parties involved in a dispute situation are advised of this section if it appears that the matter cannot be resolved following the internal investigation. During 2001/02 one application for review was received under section 76 of the Act. The patrons claim was not supported. I am pleased that the number of calls received by this Office relating to disputes remains relatively low. 11

14 GAMING TAX The tax rates effective from 1 July 2001 remained unchanged from 1999/00. Gaming tax is based on a three tiered, net gambling revenue based tax calculation with rates differentiated between hotels and clubs. The rates effective for 2001/02 were as follows: For a non-profit business: Annual NGR per venue Tax Rate up to $399, % $399,000 to $945,000 $83, % of excess above $945,000 $224, % of excess A non-profit business is defined as a business carried out pursuant to a gaming machine licence held by or on behalf of a body corporate or association, where the Minister is satisfied that the profits of the business cannot be returned to the members or shareholders of the body corporate or association. Effectively this definition applies to all incorporated clubs and also includes community hotels. For any other business: Annual NGR per venue Tax Rate up to $399, % $399,000 to $945,000 $103, % of excess above $945,000 $291, % of excess Surcharge Since 1 July 1997 a surcharge of 0.5% of net gambling revenue has been charged to recoup a $11.5 million shortfall of revenue for the 1996/97 financial year. The shortfall was recouped in full following the collection of taxation for the month of March The surcharge ceased to apply from April Non Payment of Gaming Tax A number of licensees fail to pay gaming tax from their designated bank account on the due date. If the amount remains unpaid within 7 days of the initial sweep of the account, a fine of 10% is applied. A letter of demand is also sent to the licensee giving the licensee 14 days in which to pay the outstanding amount. During 2001/2002, 26 fines were applied totalling $22,709. Three of these fines totalling $5,079 were subsequently remitted for various reasons. If the amount remains outstanding after the 14 days, I may exercise my powers under Section 36 to take disciplinary action. Disciplinary action may involve reprimanding a licensee, suspension or revocation of the licence or adding or varying licence conditions. I must give written notice to a licensee of the proposed disciplinary action, allowing a period of at least 21 days for the licensee to respond. In the same notice I may suspend the licence pending determination of the disciplinary proceedings. During the year I exercised my powers under section 36 and suspended two licences for non-payment of gaming tax. The suspensions were lifted once the amount was paid. 12

15 ORGANISATION Organisation Structure The organisation structure of the Office of the Liquor and Gambling Commissioner is attached as Appendix 1. The structure reflects an integration of related liquor and gambling functions which has proven to be not only cost efficient but also effective. The integrated liquor and gambling model reflects best practice. Staffing 2000/01 Budget 2000/01 Actual 2001/02 Budget 2001/02 Actual Average full time equivalent staff Budget Information Actual expenditure for 2001/02 for gaming machine administration was $1.774 M against a budget of $1.670M. 2000/ / / /02 Budget Actual Budget Actual $m $m $m $m salaries goods & services Total THANKS I take the opportunity to record my thanks to all staff for their continued efforts in I also thank the Board and staff of the Independent Gaming Corporation Ltd, the State Supply Board and staff and the service agents Getronics Australia Pty Ltd and AWA Gaming Services Pty Ltd. The outstanding relationship and cooperation between these bodies contributes to the success of the gaming machine industry in South Australia. 13

16 STATISTICS Table 1 Monthly gaming statistics 2001/2002 Month Total bets Total Wins Net Gambling Revenue Tax Surcharge Fines Jul ,008, ,303,975 48,704,147 16,907, ,526 - Aug 449,207, ,822,410 52,385,225 18,292, , Sep 417,975, ,317,274 48,657,749 16,843, ,289 5,854 Oct 442,568, ,062,571 51,505,919 17,949, ,530 9,866 Nov 441,451, ,103,984 51,347,233 17,831, , Dec 445,252, ,356,699 51,896,029 18,092, , Jan ,950, ,931,199 49,019,537 16,959, , Feb 401,174, ,755,129 46,418,963 15,973, , Mar 437,642, ,953,194 50,689,646 17,578, , Apr 444,981, ,550,160 51,431,635 17,879, May 464,978, ,266,189 53,712,241 18,758, Jun ,860, ,814,887 51,045,915 17,751, /02 Year 5,225,051,870 4,618,237, ,814, ,818,160 2,253,129 17,628 Chart 1 Gaming tax levied per month 2001/2002 $21,000,000 $20,000,000 $19,000,000 $18,000,000 $17,000,000 $16,000,000 $15,000,000 $14,000,000 $13,000,000 $12,000,000 $11,000,000 $10,000,000 $9,000,000 $8,000,000 Jul-2001 Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

17 Table 2 Monthly gaming machine and venue installations 2001/2002 Month Venues Gaming Machines Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Chart 2 Monthly gaming machine and venue installations 2001/ LIVE GAMING MACHINES GAMING MACHINES VENUES LIVE VENUES Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

18 Table 3 Data by ABS Local Government Area (LGA) 2001/2002 Note: Where a LGA has less than 7 venues, that LGA has been grouped with another LGA LGA or Grouped LGA No of Venues No of Aggregate NGR machines at 30 Jun 02 (2001/02) Adelaide $37,521, Adelaide Hills $4,265, Alexandria $5,733, Barossa $5,248, Barunga West, Copper Coast $6,895, Berri Barmera $6,916, Cambelltown, Tea Tree Gully $43,615, Ceduna, Streaky Bay, Le Hunte, Elliston, Lower Eyre Peninsula $3,782, Charles Sturt $48,937, Clare & Gilbert Valleys $1,601, Coorong, Tatiara $3,650, Gawler $9,483, Goyder, Northern Areas $883, Holdfast Bay $23,726, Kangaroo Island, Yankalilla, Victor Harbor $7,608, Kapunda & Light, Mallala $2,477, Kimba, Cleve, Tumby Bay, Franklin Harbour 7 77 $1,451, Loxton Waikerie $3,759, Marion $31,940, Mid Murray $2,424, Mitcham, Burnside $10,507, Mount Barker $7,896, Mount Gambier, Grant $13,921, Mount Remarkable, Orroroo/Carrieton, Peterborough 8 70 $1,020, Murray Bridge, Karoonda/East Murray, Southern Mallee $7,939, Naracoorte & Lucindale, Robe, Lacepede $3,840, Norwood Payneham & St Peters $27,705, Onkaparinga $55,726, Playford $24,855, Port Adelaide Enfield $54,824, Port Augusta $7,255, Port Lincoln $7,331, Port Pirie $7,243, Prospect, Walkerville $12,224, Renmark Paringa $4,437, Roxby Downs, Coober Pedy, Flinders Ranges $4,477, Salisbury $53,142, Unincorp. Far North, Unincorp. West Coast 7 66 $846, Unley $13,661, Wakefield Region 9 64 $964, Wattle Range $3,044, West Torrens $16,968, Whyalla $10,301, Yorke Peninsula $4,754, $606,814, The total number of 597 represents the total number of venues that operated and derived NGR at any time throughout the year. This number may differ from the total as at 30 June 2002 due to surrender or suspension of the gaming licence. 16

19 Table 4 Net gambling revenue to / / / / / / / /02 Hotels Clubs Total Table 5 Gaming tax to / / / / / / /01¹ 2001/02 Hotels Clubs Total ¹ Tax rates reduced with the introduction of GST Table 6 Average net gambling revenue per machine per day to / / / / / / / /02 Ave NGR per machine per day $98 $105 $100 $101 $107 $107 $111 $115 Table 7 Average total net gambling revenue per day type 1998/ / / /02 Sun $0.831 mil $0.941 mil $1.053 mil $1.125 mil Mon $0.936 mil $1.033 mil $1.123 mil $1.304 mil Tues $1.019 mil $1.124 mil $1.269 mil $1.374 mil Wed $1.279 mil $1.317 mil $1.503 mil $1.690 mil Thurs $1.540 mil $1.689 mil $1.896 mil $2.085 mil Fri $1.556 mil $1.753 mil $1.958 mil $2.171 mil Sat $1.323 mil $1.423 mil $1.618 mil $1.810 mil 17

20 Table 8 Return to player to 2002¹ 1994/ / / / / / / /02 Return to Player 87.56% 87.82% 87.95% 88.01% 88.12% 88.21% 88.30% 88.39% ¹ From 1 October 2001 all new games and machines installed after this date, must have a minimum return to player of 87.5% (increased from 85%). While the actual return to player has continued to increase steadily each year, it is expected that this change to the minimum RTP will impact further as older games and machines installed prior to 1 October 2001 are removed and replaced with new games with a minimum return to player of 87.5%. Chart 3 Average return to player % - 6 monthly since commencement of gaming 88.50% 88.45% 88.40% 88.35% 88.30% 88.25% 88.20% 88.15% Return To Player % 88.10% 88.05% 88.00% 87.95% 87.90% 87.85% 87.80% 87.75% 87.70% 87.65% 87.60% 87.55% 87.50% Dec Jun Dec Jun Dec Jun Dec Jun Dec Period Ending Jun Dec Jul Dec Jun Dec Jun

21 Table 9 Live venues and machines to Jun Jun Jun Jun Jun Jun Jun Jun 02 No of venues No of machines Table 10 Number of clubs by machine range to 2002 No of machines 30 Jun Jun Jun Jun Jun Jun Jun Jun 02 1 to to to to Total Table 11 Number of hotels by machine range to 2002 No of machines 30 Jun Jun Jun Jun Jun Jun Jun Jun 02 1 to to to to Total

22 Chart 4 Growth in gaming venues 600 No. of Venues Hotels Clubs /06/ /06/ /06/ /06/ /06/ /06/ /06/ /06/2002 Chart 5 Growth in gaming machine installations Live no. of Machines Hotels Clubs /06/ /06/ /06/ /06/ /06/ /06/ /06/ /06/2002 Table 12 Average growth in live machines to / / / / / / / /02 Monthly average number of machines installed

23 Table 13 Manufacturer s share of gaming machine market to 2002 Jun 95 Jun 96 Jun 97 Jun 98 Jun 99 Jun 00 Jun 01 Jun 02 Aristocrat IGT Olympic Pacific Konami Datacraft VGS Atronic Vidco Total¹ ¹ The total number of gaming machines for June of each year as shown above, may be higher than the amount reported in Table 9 as the number of machines installed in venues as at the 30 June each year. The data shown in Table 13 above takes into account data on any machine installed at any time during June with the difference due to machines being installed and removed from venues. 21

24 ORGANISATION CHART - OFFICE OF THE LIQUOR AND GAMBLING COMMISSIONER APPENDIX 1 LIQUOR AND GAMBLING COMMISSIONER LIQUOR LICENSING AND REGULATION GAMING ADMINISTRATION CASINO REGULATION GAMING REGULATION RACING REGULATION

25 CONTACTS OFFICE OF THE LIQUOR AND GAMBLING COMMISSIONER LOCATION Level 9, East Wing 50 Grenfell Street ADELAIDE SA 5000 POSTAL ADDRESS GPO Box 2169 ADELAIDE SA 5001 DX 363 FACSIMILE (08) PHONE NUMBERS GENERAL INQUIRIES (08) COMPLAINTS (08) EVALUATION OF GAMING MACHINES (08) GAMING MACHINE MALFUNCTIONS (08) GAMING TAX & STATISTICS (08) INSPECTORATE (08) LICENCE APPLICATIONS (08) PERSON APPROVALS (08) RECORD KEEPING REQUIREMENTS (08)

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