The Hon. John Darley has moved this bill in response to an incident that occurred at the Adelaide Casino some months ago. In addressing this bill, my focus will be on the future and on the past. In planning for the future, we should understand what has gone before, and we should be guided by facts and economic realities, not by the rhetoric and chest-thumping of government media releases.
The SkyCity company has announced publicly that it intends to spend $250 million on upgrading and extending the Adelaide Casino. It is understood that its plans involve pushing out towards the riverbank, with multilevel bars and restaurants overlooking the River Torrens and Parklands. SkyCity proposes to extend the boundaries of its licensed areas to extend its main gaming floor. It proposes to build exclusive new rooms designed to attract increased numbers of interstate and international high rollers and VIPs.
Whilst this much is public, most of the detail is not at this point. Any development of the Adelaide Casino is likely to result in adjustments to the areas licensed for gambling, the areas licensed for alcohol consumption, the areas where the Office of the Liquor and Gambling Commissioner extended trading authorisations apply, the areas where the Office of the Liquor and Gambling Commissioner entertainment consent applies, the maximum number of patrons approved for each area, the areas defined as enclosed for the purposes of the Tobacco Products Regulation Act, and any conditions imposed in respect of any of the above approvals.
The Hon. John Darley’s bill attempts to regulate the permitted use of just one of the many areas within the Casino. However, in the next year or so, if development does in fact proceed, there is likely to be a range of new spaces, both indoor and outdoor, created. I am told that, if new areas are created, there is then likely to be a substantial rearrangement of the existing facilities within the Casino.
In my view, discussion about licence boundaries and permitted uses should be discussed as a whole and not considered piecemeal. It may be, at a point in the future, that the Oasis Bar at the Casino becomes an enclosed area with a roof, it may remain an open area that becomes non-smoking or it may remain an open area where gaming is prohibited. These plans are before the government and SkyCity’s proposals are being considered. The Liberal Party will have to consider those plans when the government decides that it is prepared to share them with the rest of South Australia’s population.
On a personal level, I look forward to seeing SkyCity’s plans and encouraging SkyCity’s investment in South Australia. I know that the Crown Casino complex in Melbourne was one of the many major projects supported by that outstanding Liberal premier, Jeff Kennett. The Crown complex has a massive impact on the economic and social life of Victorians; it has led to a rejuvenation of not just the Southbank precinct but the CBD and the entire suburb of South Melbourne. I would be amazed if you, Mr President, have not enjoyed yourself at some stage in that Crown Casino complex in Melbourne.
Certainly the Hon. David Ridgway has been there with me and we have enjoyed ourselves. Singapore opened its first two casinos last year and tourists have been flocking there. Before then, Singapore’s economy was in the doldrums in the wake of the GFC. Since the opening, Singapore’s GDP had grown from a negative 16.7 per cent to a positive 22.5 per cent in May 2011. The conservative Singapore government resisted casino-orientated development for many years; it finally relented and is now reaping the rewards.
Following the rise of personal wealth in Asia, particularly China, the region has seen the rise of casino-related tourism. Crown Casino’s annual report showed that they made $500 million from international VIPs last year. According to a report in The Advertiser on 23 May 2011, Deutsche Bank predicts the highly competitive Australasian high-roller market in Australasia will reach almost $90 billion by 2015; they say that SkyCity’s share of that market will be only 4 per cent, and 4 per cent of $90 billion is a mere $3.6 billion. I know that the management of the Adelaide Casino is pulling out all stops to go after that particular market.
The important thing about a growing market is that Adelaide Casino does not need to take market share from other casinos in order to justify its investment. Every year there is more money and the VIP gambling pie gets bigger. This market will only stop growing when wealth in China and the rest of Asia stops growing. We believe that that will not be for many years to come.
The message that the Liberal Party has received from SkyCity is that it is almost impossible for them to compete in the international VIP market because of a range of regulatory and tax rate issues. Whilst we do not yet know the details, I understand that SkyCity is looking for a level playing field on these issues with other Australian casinos. The Adelaide Casino was not helped by some of the stupid decisions made by this Rann government over the past decade.
When smoking bans were introduced in Australia, every other casino in Australia was given an exemption for their VIP rooms. The fact is that many high rollers in the Asia-Pacific region like to have a cigar or cigarette when they have a punt. The market for high rollers is an intensely competitive one and, if a gambler cannot play in surroundings where they are comfortable, they will go somewhere else.
The Adelaide Casino has put in place state-of-the-art smoke extractors in their VIP rooms so that, if a customer was smoking, it would hardly be noticed by staff and other customers. It is one of the dopier decisions of this government that, at the time, it decided not to exempt the Adelaide Casino’s VIP areas from smoking bans. The consequence of this Rann government decision is that, if there are any international VIPs who smoke, they are at Crown, Burswood or the Gold Coast, not in Adelaide, and we are not reaping the taxation benefits that go with it.
I hate to think how many dollars that single decision has cost the South Australian economy. If Adelaide Casino were getting its fair share of the $500 million in international VIP business, now going to the Crown Casino every year, how many extra dollars would have been spent on local hotels and restaurants? How many extra tourists would have visited Kangaroo Island, our wine regions, even the magnificent part of the world up near Whyalla?
How much extra would have been spent on local retail shops? How many extra jobs would have been created? How much extra tax would have been paid and what could a good government have done with that extra money? Well, that is a bit of a furphy, because God knows what this government would have done with that money.
Smoking and gambling in Australia do not end in casino VIP areas. I am told that, in other Australian states, an estimated 17,000 machines and table games are positioned in outdoor areas. Star City Casino in Sydney has 322 machines on a huge open-air balcony overlooking Sydney Harbour. Several of the big New South Wales rugby league clubs have well over 100 outdoor gaming machines, and some have more than 200. Up to one-third of gaming machines in New South Wales are outside.
I set this out because any debate about smoking within the Adelaide Casino needs to be looked at by considering the market within which it operates. I am told that 30 per cent of revenue—and I will repeat that: 30 per cent of revenue—at the Adelaide Casino comes from non‑South Australians. It is therefore shortsighted and self-defeating to apply exactly the same rules to the Casino that apply to local venues.
I also raise these issues to set the background about what happened when the Rann government realised that they had approved an outdoor gaming area at the Casino. Smoking in casinos is commonplace in Australia. Outdoor gaming areas are commonplace in Australia. Adelaide Casino has written approval from the commissioner himself to operate gaming machines in an outdoor area. This parliament decided last November to ban outdoor gaming in pubs and clubs but not at the Adelaide Casino. Adelaide Casino’s decision needs to be seen in that context.
When the Premier realised what this government had approved, he described the Casino as ‘reprehensible’. Well, if it was so reprehensible, why did his government approve it? Adelaide Casino’s legal advice confirmed that they had acted legally and in accordance with the approval given by the commissioner. However, when faced with a barrage of abuse from the Premier and that former legend of a gambling minister, the Hon. Bernard Finnigan, Adelaide Casino management unilaterally decided not to pursue its outdoor gaming area. What that means is that this issue is no longer a live issue. There is no urgency to the measure proposed by the Hon. John Darley. There is no existing ill that needs legislation to prevent it.
I am not an advocate of confusing smoking policy and gambling policy. Senator Xenophon says that, when smoking bans were introduced in hotels and clubs, problem gambling fell. The reality is that patronage from all customers fell, that is, problem gamblers, non-problem gamblers, tourists, everyone. Senator Xenophon’s approach is like saying, in order to prevent road deaths, we will ban everybody from driving on the roads during peak times. In my view, good regulations should be balanced and targeted to the problem they seek to solve.
Too often, this government has introduced measures in pubs, clubs and the Casino that just make it more difficult and more annoying for everyone playing the games. A serious policy to address problem gambling specifically targets problem gamblers and leaves the recreational gambler alone. We need to be wary of the nanny state brigade who simply do not like gambling, drinking or having fun and, in the name of protecting the vulnerable few, make life miserable for the rest of us.
In my view, if the Casino can demonstrate that it has state-of-the-art air conditioning and smoke extractors and if it can come to an arrangement with its staff about working in smoking areas, then the government should be prepared to consider Casino smoking areas on their merits. In making these decisions, government needs to be mindful of competitive pressures and economic opportunities.
If I was in parliament in the 1980s, when South Australia was deciding whether or not to have a casino, I am sure I would have voted yes. As a Liberal, I believe in freedom and an adult’s right to choose how to spend their leisure time and dollars. Unless I was part of the 1 per cent of people who cannot control their gambling, I should not have a government telling me what I can and cannot do.
I know that there were a few members back in 1985 who did not really like the idea of a casino but wanted the tax revenue that goes along with it. I understand their argument, but sometime between 1985 and today this school of thought has been forgotten. The current regulatory scheme seems to permit a casino but has so many unnecessary rules and red tape that the Casino cannot compete to bring tourists in.
The Rann government, in particular, seems to want to squeeze greater amounts of tax from the same existing pie, instead of growing the casino and everyone sharing a much bigger pie. It is just plain stupidity to permit a casino and then tie its hands behind its back so that it cannot attract tourists, particularly the high roller VIP gamblers, to South Australia. Whilst I understand the sentiments behind Mr Darley’s bill, and he may well achieve his aim in the full passage of time, it is premature to legislate on the casino’s boundaries before decisions are made about a $250 million investment. For these reasons, I oppose the bill.
In summary, the Darley bill deals with one area of the casino and one aspect of its licensed boundaries. As part of the casino’s proposed $250 million development there is likely to be a substantial rearrangement of facilities within the casino and many new areas created. This will involve substantial changes to gaming, liquor and other boundaries, and needs to be remembered. Licence boundaries and permitted users should be decided as a whole, as part of the casino development project, not on a piecemeal basis.
Smoking is permitted in VIP areas of other Australian casinos and there are around 17,000 gaming machines in outdoor areas in pubs and clubs in other states. I repeat that the rules about smoking at Adelaide Casino should be considered after proper consideration of its competitive market and the opportunity to bring VIP gamblers to Australia. Smoking policy and gambling policy should not be confused. Smoking rules should not be used as a back-door method of getting stuck into the gaming industry where this cannot be justified on the evidence.
There are enormous and growing benefits to the state from a bigger casino that can compete for international gaming VIPs. Why should we be the backwater? Like all other Australian states, the government should consider different rules for the casino if the economic upside can be demonstrated.
The industry in South Australia puts an enormous amount of money into the Gamblers Rehabilitation Fund. It has been a pet hobby of mine for some period of time that the money that is pumped into the Department for Families and Communities—and then goodness knows where it finishes up—should go to the NGOs who have people on the ground who are passionate about solving problem gambling issues.
We have millions of dollars that the industry contributes and I do not see that being spent wisely. That is where the focus should be. That is how we solve problem gambling. If we are serious about having free enterprise, private enterprise, let’s have a level playing field. I oppose the bill.