Venues celebrate the latest cuts in red tape

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I am sure you would all agree that the expectations of the consumer in today’s environment is far greater than 10 years ago.  Technology is constantly evolving and there have been significant changes in society, and yet our industry has had to endure the same legislation incepted at a time of conservatism and rationalisation. Some would even go as far to say the legislation is archaic where the minority had the largest impact to any changes.

However, recent announcements have shown that our government is willing to give an individual the right to choose and is lessening the burden for venues.  Whilst this won’t instantaneously create more revenue, it will allow patrons greater flexibility in spending their recreational dollar.  With the online world growing exponentially over the past few years, the ease of shopping online has become increasingly attractive as well as the ability to entertain ourselves and others in our own homes. So what does this mean for the average hospitality venue?

Over many years, venues have earmarked diversification as a strategy to maintain or grow profits. Some venues have been restricted in relation to their size or location and have been forced to invest in other venues due to the restrictions on the number of EGMs (electronic gaming machines) and the ‘near rule’. This ‘near rule’ essentially stopped any venue from acquiring additional gaming sites out of the primary catchment of the main premises.  While clubs were restricted, hotels could acquire further sites with no restriction on locations.

The new changes now allow clubs to acquire further venues with the proximity rule dissipating.  Clubs have become a necessary social haven for local communities and those high growth areas can be explored. The new changes also provide more opportunity for struggling venues to gain assistance from larger, more profitable venues.   However, it’s advisable that venues ensure they undertake a comprehensive feasibility study and further market research before embarking on these options.

One thing is certain – the online environment is not going away any time soon.

These new legislative changes will certainly have an impact on consumer behaviour,  but venues must ensure that this is only the start of the process.  Continual planning and reinvestment is critical to every success and those venues who embrace the changes will ultimately prosper in the long run.

A summary of the latest announcements from the government are listed below;

  • Removing the ‘near rule’ so that struggling clubs can be aided by a neighbour, regardless of their distance, and make it easier to amalgamate.
  • Lifting the venue limit cap from 280 machines to 300.
  • In addition to the extra 20 machines for individual clubs, amalgamated entities will be able to have up to 450 gaming machines across two sites or 500 gaming machines across three sites, with no more than 300 machines at one venue. Note: While the state-wide cap isn’t changing, this will give you more flexibility, i.e. to amalgamate clubs (save those clubs who may not otherwise survive) and/or to expand beyond your current operation for example into Greenfield sites.
  • Removing the regional reallocation boundaries for clubs so that you can trade (sell/purchase/lease) gaming machine entitlements with other clubs across Queensland.
  • Increasing the maximum cash payout limit to $5,000 for every gaming venue in Queensland. Each venue wanting to make that change will no longer have to apply to OLGR for an increased limit.

For more information on the new legislation changes and how you can start preparing your venue to maximise the new opportunities, contact Danny Nixon-Smith on (07) 3878 9877 or email danny@dws.net.au.

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