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This is a Bill, not an Act. For current law, see the Acts databases.
Casino and Gambling Legislation Amendment Act
2014
No. of 2014
TABLE OF PROVISIONS
Clause Page
PART 1--PRELIMINARY 1
1 Purposes 1
2 Commencement 2
PART 2--CASINO CONTROL ACT 1991 3
3 Duration of casino licence 3
4 Gaming machines in casinos 3
PART 3--CASINO (MANAGEMENT AGREEMENT) ACT 1993 4
5 Definitions 4
6 New section 6J inserted 4
6J Ratification of the tenth Deed of Variation 4
7 Agreement to prevail if inconsistent with Casino Control Act 5
8 New Schedule 11 inserted 5
SCHEDULE 11--Tenth Deed of Variation to the
Management Agreement 5
PART 4--GAMBLING REGULATION ACT 2003 29
9 Maximum number of gaming machine entitlements 29
10 New Division 5B inserted in Part 4A of Chapter 3 29
Division 5B--Extinguishment of unallocated or forfeited
entitlements on reduction of State limit 29
3.4A.20K Ministerial Order for extinguishment 29
3.4A.20L Effect of Order 31
3.4A.20M No compensation payable 31
PART 5--REPEAL OF AMENDING ACT 32
11 Repeal of amending Act 32
ENDNOTES 33
i
Casino and Gambling Legislation
Amendment Act 2014
No. of 2014
[Assented to ]
The Parliament of Victoria enacts:
PART 1--PRELIMINARY
1 Purposes
The purposes of this Act are--
(a) to amend the Casino Control Act 1991 to
increase the maximum number of gaming
machines permitted at the Melbourne Casino
and extend the Melbourne Casino Licence;
and
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Casino and Gambling Legislation Amendment Act 2014
No. of 2014
Part 1--Preliminary
s. 2
(b) to amend the Casino (Management
Agreement) Act 1993 to ratify a tenth Deed
of Variation to the management agreement
for the Melbourne Casino; and
(c) to amend the Gambling Regulation Act
2003 to provide further for the
extinguishment of gaming machine
entitlements.
2 Commencement
This Act comes into operation on the day after the
day on which it receives the Royal Assent.
__________________
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Casino and Gambling Legislation Amendment Act 2014
No. of 2014
Part 2--Casino Control Act 1991
s. 3
PART 2--CASINO CONTROL ACT 1991
3 Duration of casino licence
At the end of section 18 of the Casino Control See:
Act No.
Act 1991 insert-- 47/1991.
Reprint No. 8
"(2) Despite subsection (1), the Melbourne as at
22 June 2011
Casino Licence remains in force until and
18 November 2050, unless it is sooner amending
Act Nos
cancelled or surrendered under this Act. 29/2009,
84/2009,
(3) The Commission must amend the Melbourne 74/2010,
Casino Licence to reflect the operation of 58/2011,
32/2012,
subsection (2) and issue the amended licence 65/2013,
to the Melbourne Casino Operator. 4/2014,
17/2014 and
(4) Section 16 does not apply to the amendment 37/2014.
LawToday:
of the Melbourne Casino Licence under www.
subsection (3). legislation.
vic.gov.au
(5) In this section--
Melbourne Casino Licence has the same
meaning as in the Casino
(Management Agreement) Act 1993;
Melbourne Casino Operator has the same
meaning as in the Casino
(Management Agreement) Act
1993.".
4 Gaming machines in casinos
In section 62A(2) of the Casino Control Act
1991, for "2500" substitute "2628".
__________________
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Casino and Gambling Legislation Amendment Act 2014
No. of 2014
Part 3--Casino (Management Agreement) Act 1993
s. 5
PART 3--CASINO (MANAGEMENT AGREEMENT) ACT 1993
5 Definitions
See: In section 4 of the Casino (Management
Act No.
94/1993. Agreement) Act 1993--
Reprint No. 4
as at (a) in the definition of the Agreement, after
13 February
2013
"ninth Deed of Variation" insert "and the
and tenth Deed of Variation";
amending
Act No. (b) in the definition of the ninth Deed of
70/2013.
LawToday: variation, for "Schedule 10." substitute
www. "Schedule 10;";
legislation.
vic.gov.au (c) after the definition of the ninth Deed of
variation insert--
"the tenth Deed of Variation means the deed
of variation to the management
agreement for the Melbourne Casino
Project, a copy of which is set out in
Schedule 11.".
6 New section 6J inserted
After section 6I of the Casino (Management
Agreement) Act 1993 insert--
"6J Ratification of the tenth Deed of Variation
(1) The tenth Deed of Variation is ratified and
takes effect as if it had been enacted in this
Act.
(2) The Agreement is amended as provided in
the tenth Deed of Variation.
(3) A reference in clause 2.2(a) of the tenth
Deed of Variation to the coming into
operation of the Bill is taken to be a
reference to the commencement of the
Casino and Gambling Legislation
Amendment Act 2014.".
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Casino and Gambling Legislation Amendment Act 2014
No. of 2014
Part 3--Casino (Management Agreement) Act 1993
s. 7
7 Agreement to prevail if inconsistent with Casino
Control Act
In section 7(2) of the Casino (Management
Agreement) Act 1993, after "or 6I(1)" insert
"or 6J(1)".
8 New Schedule 11 inserted
After Schedule 10 to the Casino (Management
Agreement) Act 1993 insert--
"__________________
SCHEDULE 11
TENTH DEED OF VARIATION TO THE MANAGEMENT
AGREEMENT
MELBOURNE CASINO PROJECT
DEED dated 3 September 2014
BETWEEN:
THE HONOURABLE EDWARD O'DONOHUE MLC, the Minister of
the Crown for the time being administering the Casino Control Act 1991
acting for and on behalf of the State of Victoria ("State")
AND
CROWN MELBOURNE LIMITED ACN 006 973 262 with its registered
office at 8 Whiteman Street, Southbank, Victoria ("Company")
RECITALS
A. The State and the Company entered into an agreement dated
20 September 1993 ratified by and scheduled to the Casino
(Management Agreement) Act 1993 ("Management Agreement").
B. The Management Agreement has been varied by:
(a) a deed of variation dated 14 November 1994 ratified by and
scheduled to the Casino (Management Agreement) (Amendment)
Act 1994 and inserted as Schedule 2 to the Casino (Management
Agreement) Act 1993;
(b) a deed of variation dated 12 October 1995 ratified by and
scheduled to the Casino (Management Agreement) (Further
Amendment) Act 1995 and inserted as Schedule 3 to the Casino
(Management Agreement) Act 1993;
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Casino and Gambling Legislation Amendment Act 2014
No. of 2014
Part 3--Casino (Management Agreement) Act 1993
s. 8
(c) a deed of variation dated 3 June 1996 ratified by the Gaming
Acts (Amendment) Act 1996 and inserted as Schedule 4 to the
Casino (Management Agreement) Act 1993;
(d) a deed of variation dated 7 November 1996 ratified by the
Casino (Management Agreement) (Amendment) Act 1996 and
inserted as Schedule 5 to the Casino (Management Agreement)
Act 1993;
(e) a deed of variation dated 1 October 1998 ratified by the Gaming
Acts (Further Amendment) Act 1998 and inserted as Schedule 6
to the Casino (Management Agreement) Act 1993;
(f) a deed of variation dated 3 April 2000 ratified by the National
Taxation Reform (Further Consequential Provisions) Act 2000
and inserted as Schedule 7 to the Casino (Management
Agreement) Act 1993;
(g) a deed of variation dated 7 May 2002 ratified by the Casino
(Management Agreement) (Amendment) Act 2002 and inserted as
Schedule 8 to the Casino (Management Agreement) Act 1993;
(h) a deed of variation dated 8 July 2005 ratified by the Casino
Control (Amendment) Act 2005 and inserted as Schedule 9 to the
Casino (Management Agreement) Act 1993;
(i) a deed of variation dated 4 June 2009 ratified by the Casino
(Management Agreement (Amendment) Act 1994 and inserted in
Schedule 10 to the Casino (Management Agreement) Act 1993.
C. The parties have agreed to further vary the Management Agreement as
provided in this Deed of Variation.
AGREEMENT
1. Definitions
Unless the context otherwise requires or the contrary intention
appears, terms defined in the Casino Control Act 1991 or the
Management Agreement have the same meaning when used in this
Deed.
2. Ratification and operation of provisions
2.1 A Minister of the State must as soon as reasonably practicable after
the execution of this Deed introduce and sponsor a Bill in the
Parliament of Victoria to:
(a) ratify this Deed;
(b) amend the Casino Control Act 1991 to permit the increase in the
maximum number of gaming machines available for gaming at
any time while the Melbourne Casino is open for business as set
out in clause 2.2(b)(ii) of this document;
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Casino and Gambling Legislation Amendment Act 2014
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Part 3--Casino (Management Agreement) Act 1993
s. 8
(c) extend the date upon which the Casino Licence ceases to have
effect to 18 November 2050; and
(d) make ancillary amendments to other legislation.
2.2 This Deed (other than clauses 1, 2, 5 and 7 which are effective on and
from the date of this Deed) shall come into operation once all the
following have occurred:
(a) the Bill referred to in clause 2.1 has come into operation as an
Act; and
(b) the following amendments to the Casino Licence take effect:
(i) amendments to clause 8 (a) of the Casino Licence to:
(A) increase the maximum number of gaming tables in
operation and available for the playing of Table
Games at any time while the Melbourne Casino is
open for business from 400 to 440; and
(B) increase the number of stations connected to any Fully
Automated Table Games from 200 to 250 stations in
operation and available for gaming at any time while
the Melbourne Casino is open for business;
(ii) an amendment to clause 8(c) of the Casino Licence to
increase the maximum number of gaming machines
available for gaming at any time while the Melbourne
Casino is open for business from 2,500 to 2,628; and
(c) an amended Casino Licence is provided to the Company that
reflects the extension of the Casino Licence referred to in
clause 2.1 (c),
(the date on which the last of those to occur being the "Operative
Date").
3. Variation of Management Agreement
3.1 The Management Agreement is varied from the Operative Date so
that:
(a) all references to "Crown Casino Ltd" are replaced by references
to "Crown Melbourne Ltd";
(b) all references to the Gaming Machine Control Act 1991 are
replaced by references to the Gambling Regulation Act 2003;
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Casino and Gambling Legislation Amendment Act 2014
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Part 3--Casino (Management Agreement) Act 1993
s. 8
(c) in clause 2:
(i) the definition of "Authority" is replaced by the
following definition:
"Authority" means the Victorian Commission for
Gambling and Liquor Regulation;
(ii) the definition of "Casino Licence" is amended to include
the words "as varied from time to time" after the words
"Casino Agreement";
(iii) in clause 2 the following new definitions are inserted in
alphabetical order:
"Tenth Deed of Variation" means the Tenth Deed of
Variation to the Management Agreement between the State
and the Company dated on or about 1 September 2014;
"Tenth Variation Commencement Date" has the same
meaning as the term "Operative Date" in the Tenth Deed of
Variation to the Management Agreement;
(d) new clauses 21A, 21B and 21C are inserted as follows:
"21A Further payments
The Company will make the following payments to
the State:
(a) $250,000,000, payable within seven (7) days
after the Tenth Variation Commencement Date;
and
(b) $250,000,000, payable on 1 July 2033.
21B Contingent payments
(a) In addition to the payments referred to in
clause 21A, the Company will pay to the State
the following additional amounts on 1 September
2022:
(i) if the Compound Annual Growth Rate of
Normalised Gaming Revenue from the
Financial Year ending 30 June 2014 to the
Financial Year ending 30 June 2022
exceeds 4.0%, then the Company will pay
to the State an amount of $100,000,000;
and
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Casino and Gambling Legislation Amendment Act 2014
No. of 2014
Part 3--Casino (Management Agreement) Act 1993
s. 8
(ii) if the Compound Annual Growth Rate of
Normalised Gaming Revenue from the
Financial Year ending 30 June 2014 to the
Financial Year ending 30 June 2022
exceeds 4.7%, then the Company will pay
to the State, in addition to the payment
referred to in sub-paragraph (a)(i), a further
amount of $100,000,000.
(b) In this clause 21B:
(i) "Compound Annual Growth Rate" is
calculated as follows (and expressed as a
percentage):
(Ending Value/Beginning Value)1/8 - 1
Where:
Ending Value is the Normalised
Gaming Revenue for
the Financial Year
ending 30 June 2022;
and
Beginning Value is the Normalised
Gaming Revenue for
the Financial Year
ending 30 June 2014;
(ii) "Normalised Gaming Revenue" means
Gross Gaming Revenue, plus Normalised
Revenue from Commission Based Play; and
(iii) "Normalised Revenue from Commission
Based Play" means the total turnover from
Commission Based Players, multiplied by
1.35%.
(c) The State may request details from the Company
of the total turnover from Commission Based
Players at any time (but no more frequently than
twice in any one year). The Company must
provide such details promptly following the
request.
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Part 3--Casino (Management Agreement) Act 1993
s. 8
21C Interest
21C.1 The amounts referred to in clauses 21A and 21B must
be paid in same day settlement funds before 2.00pm
on the due date.
21C.2 If the Company fails to pay any amount due under
clause 21A or clause 21B by the due date, without
prejudice to any other right or remedy arising because
of that failure, the Company must pay to the State
interest (calculated daily) on the amount in default
(including accrued interest) at the Default Rate for the
period from the due date until the amount due and all
interest payable has been paid."
(e) a new clause 22.10 is inserted as follows:
"22.10 (a) Gross Gaming Revenue and Commission
Based Players' Gaming Revenue from New
Gaming Product must be separately
accounted for by the Company and verified
by the Authority.
(b) If casino tax paid to the State in accordance
with clauses 22.1(b)(iii), 22.1(f) and 22A.1
in respect of Gross Gaming Revenue and
Commission Based Players' Gaming
Revenue from New Gaming Product in any
Financial Year during the Guarantee Period
is less than $35,000,000, the Company must
pay to the State within 60 days following
the end of that Financial Year, as additional
casino tax, an amount equal to $35,000,000
less the casino tax paid in respect of Gross
Gaming Revenue and Commission Based
Players' Gaming Revenue from New
Gaming Product for that Financial Year.
(c) New Gaming Product will be deployed
throughout the Guarantee Period at the
Melbourne Casino on the following basis:
(i) no less than 80 per cent of the new
gaming machines will be placed in
Non-VIP areas and no less than 75 per
cent of those new gaming machines
placed in Non-VIP areas will be
operated in Restricted Mode only;
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Casino and Gambling Legislation Amendment Act 2014
No. of 2014
Part 3--Casino (Management Agreement) Act 1993
s. 8
(ii) no less than 75 per cent of the new
Gaming Tables will be placed in Non-
VIP areas and all of the remaining
new Gaming Tables will be placed in
Non-smoking areas within the VIP
areas; and
(iii) 100 per cent of the additional stations
connected to Fully Automated Table
Games will be placed in Non-VIP
areas.
In this clause 22.10:
"Fully Automated Table Game" has the same
meaning as in the Casino Licence;
"Gaming Table" has the same meaning as in the
Casino Licence;
"Guarantee Period" means the period from 1 July
2015 to 30 June 2021;
"New Gaming Product" means the new gaming
products permitted to be installed as a consequence of
the amendments to the Casino Licence referred to in
clause 2.2(b) of the Tenth Deed of Variation and does
not include any gaming product installed at the
Melbourne Casino as at the Tenth Variation
Commencement Date;
"Non-smoking areas" means all areas of the
Melbourne Casino except those areas declared
pursuant to section 3E of the Tobacco Act 1987 as
smoking areas;
"Non-VIP areas" means all areas of the Melbourne
Casino except VIP areas;
"Restricted Mode" means the usual mode of
operation of a gaming machine that is not operating in
Unrestricted Mode;
"Semi Automated Table Game" has the same
meaning as in the Casino Licence;
"Unrestricted Mode" means the mode of operation
of a gaming machine operated at the Melbourne
Casino within "Specified Areas" pursuant to the notice
issued by the Authority dated 17 August 2012 and
permitted pursuant to Ministerial Directions dated
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Casino and Gambling Legislation Amendment Act 2014
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Part 3--Casino (Management Agreement) Act 1993
s. 8
17 August 2012 issued under section 3.2.3 (1) of the
Gambling Regulation Act 2003;
"VIP areas" means those areas in the Melbourne
Casino reserved for the use of Commission Based
Players and certain designated members of the
Company's complex wide loyalty program and guests
and comprising as at the Tenth Variation
Commencement Date those areas known as "Teak
Room", "Mahogany Room", "Riverside Slots" and the
private salons on levels 29 and 39 of "Crown
Towers"."
(f) clauses 22A.4 to 22A.9 (inclusive) are deleted in their entirety;
(g) a new Part 5A is inserted as follows:
"PART 5A - REGULATORY CERTAINTY
24A.1 In this clause 24A and Annexure 1 the following terms
have the meanings indicated:
"Expert" means a partner or director of an
independent, internationally recognised chartered
accounting firm or investment bank (or other
professional organisation agreed by the parties) which
is not the then current auditor of the Company or the
Authority or (unless otherwise agreed) has not been
during the past twelve month period an adviser to
Crown, the Authority, the Department of Treasury and
Finance or the Department of Justice (in relation to
gambling matters) and who has experience of the
gaming industry;
"Senior Management Representative" means:
(a) in the case of the State, the representative from
time to time nominated by the Minister of the
Crown for the time being administering the
Casino Control Act; and
(b) in the case of the Company, the Chief Executive
Officer of the Company, or if that position does
not exist, a position of equivalent seniority or
higher;
"Trigger Event" has the meaning given in section 1
of Annexure 1.
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Casino and Gambling Legislation Amendment Act 2014
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Part 3--Casino (Management Agreement) Act 1993
s. 8
24A.2 (a) The State or the Authority must not without the
Company's prior written consent, take any action
or series of actions that has or will have the
effect of:
(i) cancelling or varying the Casino Licence,
other than the revocation, termination,
suspension or variation by the Authority of
the Casino Licence in accordance with
section 20 of the Casino Control Act
(except where the Authority is relying on
section 20(1)(e) of the Casino Control Act
as a ground for disciplinary action);
(ii) increasing the then current rates of casino
tax (or any part of it) such that the increased
rate exceeds the rate of that casino tax (or
part of it) set out in this Agreement as at the
date of the Tenth Deed of Variation or such
higher rate as may be agreed by the parties
from time to time;
(iii) imposing any new tax or increasing any tax
(including levies or similarly described
payments) on the Company, except where
such new or increased tax:
(A) applies generally to Victorian
businesses or property owners or
occupiers;
(B) applies generally to businesses or
property owners or occupiers in the
Melbourne CBD or a similar
geographic location (but is not
specifically directed at the Company
or the Melbourne Casino Complex); or
(C) applies generally to businesses in the
hospitality industry (including non-
gaming businesses).
(b) The State acknowledges that the Company will
suffer loss and damage in the event of breach of
paragraph (a) and the State and the Company
acknowledge that the ordinary principles for
breach of contract apply.
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Part 3--Casino (Management Agreement) Act 1993
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24A.3 The State and the Company agree that certain other
actions or series of actions by the State or the
Authority may give rise to compensation being
payable by the State to the Company.
24A.4 The actions or series of actions by the State and/or the
Authority referred to in clause 24A.3 and the
principles and process for determining the amount of
compensation payable (if any) are set out in
Annexure 1.
24A.5 If any variation of the Casino Licence constitutes a
Trigger Event, the Company will not be entitled to
bring or maintain a claim for breach of clause 24A.2
in respect of that variation.
24A.6 (a) For the avoidance of doubt, for the purposes of
this clause 24A and Annexure 1, the State does
not include the Commonwealth, local
government or any Commonwealth or local
government authority or body.
(b) For the avoidance of doubt, no damages for
breach of clause 24A.2 or compensation under
clause 24A.3 and Annexure 1 will be due or
payable by the State or the Authority with
respect to:
(i) the granting of one or more casino licences
or similar authorities to any person or
persons other than the Company or the
granting of licences or authorities
permitting the operation or playing of
gaming product to any person or persons
other than the Company; or
(ii) action or actions necessary to put in place
the Victorian government's current state-
wide voluntary pre-commitment system,
including the prohibition of any alternative
limit setting system (which, for the
avoidance of doubt, includes the
Company's existing loss and time limit
setting system known as "Play Safe") from
1 December 2015."
(i) A new Annexure 1 is inserted in the form of Annexure 1 to this
Deed.
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Part 3--Casino (Management Agreement) Act 1993
s. 8
(j) sub-paragraphs 32.1(b)(i) and (ii) are deleted in their entirety and
replaced with the following:
"(i) in the case of the State-
The Secretary to the Department of Treasury and Finance
1 Treasury Place
MELBOURNE VIC 3000
Facsimile: (03) 9651 6228
with a copy to the Authority-
Chairman
Victorian Commission for Gambling and Liquor Regulation
49 Elizabeth Street
RICHMOND VIC 3121
Facsimile: (03) 9651 3777
(ii) in the case of the Company-
Chief Executive Officer
Crown Melbourne Ltd.
8 Whiteman Street
SOUTHBANK VIC 3006
Facsimile: (03) 9292 7041"
3.2 The Company will not be required to make any payment in respect of
any accrued liability under clauses 22A.4 to 22A.9 (inclusive) in
respect of the period from 1 July 2014 to the Operative Date.
4. Previous agreement
On and from the Operative Date, this Deed supersedes all previous
agreements or understandings between the parties in connection with
its subject matter, other than any confidentiality undertakings made by
any party in favour of the other, which remain in force in accordance
with their terms.
5. Force Majeure Event
None of the negotiation, preparation and execution of this Deed, its
ratification under clause 2 or any of the circumstances relating to or
giving rise to the creation of this Deed has or will cause or create any
Government Action, Force Majeure Event or breach of obligation
under any Transaction Document and the Company and the State so
acknowledge.
6. Confirmation of other terms
The parties acknowledge and confirm that except as varied by this
Deed the terms and conditions of the Management Agreement remain
in full force and effect.
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No. of 2014
Part 3--Casino (Management Agreement) Act 1993
s. 8
7. General provisions
Clauses 33 and 35 to 40 (inclusive) of the Management Agreement
apply to this Deed as if expressly included in this Deed.
EXECUTED AS A DEED.
SIGNED SEALED AND DELIVERED
(Signature)
by THE HONOURABLE
EDWARD O'DONOHUE MLC
Minister for Liquor and Gaming ....................................
Regulation for and on behalf
of the State of Victoria in the presence
EDWARD O'DONOHUE MLC
of:
(Signature)
..................................................
Name of witness PHOEBE DUNN
EXECUTED in accordance with
section 127 of the Corporations Act 2001
by CROWN MELBOURNE LIMITED
(ACN 006 973 262):
(Signature)
..............................................................
Name: Rowen Craigie
Director
(Signature)
..............................................................
Name: Debra Tegoni
Secretary
16
Casino and Gambling Legislation Amendment Act 2014
No. of 2014
Part 3--Casino (Management Agreement) Act 1993
s. 8
Annexure 1
Regulatory Certainty
1. Regulatory Events
1.1 Compensation is payable by the State to the Company if, after the date
of the Tenth Deed of Variation, during the term of the Casino Licence,
and without the Company's prior written consent, the State or the
Authority or any State authority or State body takes any action or
series of actions which has the effect of:
(a) removing, reducing, amending or rendering ineffective (partially
or wholly) the then current exemption from the prohibition on
smoking within the VIP areas at the Melbourne Casino Complex
(being, as at the Tenth Variation Commencement Date, those
areas declared pursuant to section 3E of the Tobacco Act 1987 as
smoking areas) (except where all other Australian State and
Territory Governments have taken substantially the same action
or series of actions); or
(b) adversely impacting the earnings before interest, taxes,
depreciation and amortisation ("EBITDA") of the Company by:
(i) reducing any maximum bets on Table Games, Semi
Automated Table Games and Fully Automated Table
Games or gaming machines (except where all other
Australian State and Territory Governments have taken
substantially the same action or series of actions);
(ii) removing, reducing in number or amending or restricting
the then current manner in which gaming machines in
unrestricted mode within the Melbourne Casino are
permitted to operate;
(iii) removing, reducing in number or restricting or amending
the then current manner in which Automated Teller
Machines are permitted to operate within the Melbourne
Casino Complex (except where all other Australian State
and Territory Governments have taken substantially the
same action or series of actions);
(iv) introducing any form of mandatory pre-commitment other
than the requirement for players of gaming machines
operating in unrestricted mode to set time and net loss
limits using the state-wide pre-commitment system (except
where all other Australian State and Territory Governments
have introduced mandatory pre-commitment with a similar
effect); or
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Casino and Gambling Legislation Amendment Act 2014
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Part 3--Casino (Management Agreement) Act 1993
s. 8
(v) restricting or amending the then current manner in which
the Company's loyalty scheme is permitted to operate
(except where all other Australian State and Territory
Governments have taken substantially the same action or
series of actions).
(each such action or series of actions is a "Trigger Event")
2. Methods of Calculating Compensation - Trigger Events
2.1 Calculation of Compensation
In the event of a Trigger Event, subject to the rest of this clause 2, the
Company will be entitled to compensation, calculated as follows:
C = (M x A)
Where:
C is the amount of compensation;
A is the annualised negative impact on the EBITDA of the Company
(normalised for a theoretical win rate of 1.35% applied to turnover of
Commission Based Players) as a result of the Trigger Event; and
M is the multiple applicable at the time the relevant action or the first
action in a relevant series of actions by the State or the Authority (or
State authority or State body) occurred as set out in the table below:
Financial Year Multiple (M)
FY15 to FY30 (inclusive) 10.5
FY31 10.0
FY32 9.5
FY33 9.0
FY34 8.5
FY35 8.0
FY36 7.5
FY37 7.0
FY38 6.5
FY39 6.0
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Casino and Gambling Legislation Amendment Act 2014
No. of 2014
Part 3--Casino (Management Agreement) Act 1993
s. 8
FY40 5.5
FY41 5.0
FY42 4.5
FY43 4.0
FY44 3.5
FY45 3.0
FY46 2.5
FY47 2.0
FY48 1.5
FY49 1.0
FY50 0.5
2.2 Cap on compensation
(a) In respect of all Trigger Events occurring in any term of a
Victorian Government ("Term") the amount of compensation
(C) will not exceed the cap determined in accordance with
paragraph (b) regardless of the number or types of Trigger
Events occurring in that Term.
(b) The cap for the period from the Tenth Variation Commencement
Date to 30 June 2015 will be $200,000,000. On 1 July 2015 and
each 1 July thereafter (each being an "Adjustment Date"), the
cap will be adjusted in accordance with the formula set out
below:
X
cap = xZ
Y
Where:
cap is the amount of the cap on and from the
Adjustment Date;
X is the CPI number published for the quarter ending
immediately before the Adjustment Date;
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Y is the CPI number published for the quarter ending
immediately before the previous Adjustment Date
or, where there is no previous Adjustment Date,
the quarter ending immediately before the Tenth
Variation Commencement Date;
Z is the amount of the cap calculated in accordance
with this formula on the previous Adjustment
Date; and
CPI number is the Consumer Price Index (All Groups for
Melbourne) published by the Australian Bureau of
Statistics (or any other index published in
substitution for this index).
The cap will be adjusted on each Adjustment Date in accordance
with this clause 2.2(b) regardless of whether, at any time prior to
the Adjustment Date, a claim for compensation has been made
by the Company or a payment of compensation has been made
by the State.
(c) The cap that is applicable to any compensation payable in respect
of a Trigger Event which occurs in a Term ("Applicable Cap")
is the cap applicable at the time at which the relevant action or
the first of any series of actions which constitutes that Trigger
Event occurs.
(d) If the compensation paid with respect to one or more Trigger
Events occurring in a Term equals the Applicable Cap, no further
compensation is payable to the Company with respect to any
other Trigger Event that occurs during that Term.
(e) No compensation will be payable in any Term for any action or
series of actions which constitutes a Trigger Event which
occurred in a prior Term and for which compensation has already
been paid (or not paid as a result of the cap). However, for the
avoidance of doubt, the amount of compensation payable in
respect of Trigger Events which occur during a Term will not be
affected by any payment of compensation made in relation to any
Trigger Event which occurred during a prior Term.
(f) For the purposes of this Annexure, the Term of each Victorian
Government ends when a new Victorian Government is sworn in
following a Victorian general election. For the avoidance of
doubt, the Company's entitlement to compensation in relation to
Trigger Events which occur in any Term will not be extinguished
as a result of a change of government following a Victorian
general election.
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2.3 Exclusions
No compensation will be due or payable to the Company under
clause 24A.3 and this Annexure 1 with respect to actions which:
(a) have an adverse impact on the Company's EBITDA of less than
$1 million per annum as assessed by the Company acting
reasonably;
(b) arise directly from disciplinary action validly taken against the
Company; or
(c) advertise or promote the Victorian government's responsible
gambling, responsible service of alcohol or "quit smoking"
programs, provided such actions are not targeted solely at the
Company.
3. Process for Determining Compensation Payable
(a) Where the Company is entitled to recover any amount (whether
by payment, discount, credit or otherwise) from any third party
(including from an insurer or under an indemnity or guarantee) in
relation to any matter for which a claim for compensation under
this Annexure 1 could be made or brought against the State by
the Company, the State is nevertheless liable for that Claim (the
"Relevant Claim") but, if and to the extent the Relevant Claim is
satisfied by the State, the Company must assign to the State the
benefit it may receive of any proceeds, debts, claims or other
actions from any third party in respect of the Relevant Claim,
and otherwise hold such benefit on trust for the State, save where
to do so would be contrary to or in breach of the Company's
insurer's rights of subrogation.
(b) The Company is obliged to take all reasonable steps to mitigate
any loss that may otherwise arise in relation to any matter or for
which a claim for compensation under this Annexure 1 could be
made or brought against the State by the Company.
(c) The Company will not be entitled to make a claim under this
Annexure 1 to the extent it has received (or, as a result of the
cap, not received) a compensation payment under this
Annexure 1 in respect of the same Trigger Event.
(d) The Company agrees that any compensation payable under this
Annexure 1 is the entire remedy for the occurrence of the Trigger
Events which may occur and it will not seek any other remedy
against the State in connection with the Trigger Events.
(e) If the Company becomes aware that a Trigger Event has
occurred, the Company must promptly provide a written notice
to the State which must set out in reasonable detail the Trigger
Event and, at any time within 2 years from becoming aware that
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a Trigger Event has occurred, the Company may provide a
written notice ("Compensation Notice") to the State which
must state that it is a Compensation Notice under this
Annexure 1 and set out in reasonable detail:
(i) the Trigger Event giving rise to the claim for compensation;
and
(ii) the amount which the Company considers to be the
compensation payable ("Compensation Payable") by the
State to the Company in respect of the relevant Trigger
Event.
(f) Within 3 months after the Company provides the Compensation
Notice to the State under clause 3(e), the State must by written
notice to the Company, either:
(i) accept the amount set out in the Compensation Notice as
the "Compensation Payable" in which case that amount will
constitute the compensation payable by the State to the
Company in respect of the relevant Trigger Event; or
(ii) request from the Company such further details in relation
to, or clarification of, information provided in the
Compensation Notice or the methodology used to
determine the amount set out in the Compensation Notices
as the "Compensation Payable" as the State may reasonably
require to assist the State in understanding the impact of the
Trigger Event on the Company's EBITDA or the
calculation of the amount set out in the Compensation
Notice as the "Compensation Payable"; or
(iii) dispute the correctness of the amount set out in the
Compensation Notice as the "Compensation Payable"
setting out in reasonable detail:
(A) the basis on which the State disputes he amount set
out in the Compensation Notice as the "Compensation
Payable"; and
(B) the amount which the State considers to be the
Compensation Payable or, if not precisely known, its
best estimate of that amount.
(g) If the State submits a request for further details or clarification
under clause 3(f)(ii):
(i) the Company must provide such further details or
clarification to the extent that it can reasonably do so
promptly following the request; and
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(ii) within 20 Business Days of receipt of the response from the
Company, the State must by written notice to the Company,
either:
(A) accept the amount set out in the Compensation Notice
as the "Compensation Payable", in which case that
amount will constitute the compensation payable by
the State to the Company in respect of the relevant
Trigger Event; or
(B) dispute the correctness of the amount set out in the
Compensation Notice as the "Compensation Payable".
(h) If the State does not take any of the actions required of it under
and within the time frames set out in clause 3(f) and 3(g)(ii), the
amount set out in a Compensation Notice as the "Compensation
Payable" will constitute the compensation payable by the State to
the Company in respect of the relevant Trigger Event.
(i) If the State issues a notice in accordance with clause 3(f)(iii) or
3(g)(ii)(B) (a "Compensation Dispute Notice"):
(i) the dispute must be resolved in accordance with the
procedure set out in clause 3(j); and
(ii) the compensation (if any) payable by the State to the
Company in respect of the relevant Trigger Event will be
the amount (if any) determined in accordance with
clause 3(j).
(j) If the State issues a Compensation Dispute Notice in accordance
with clause 3(f)(iii) or 3(g)(ii)(B) then the following procedure
will apply:
(i) Within 20 Business Days of the State giving the
Compensation Dispute Notice ("Negotiation Period"),
the Senior Management Representative from each of the
parties must meet at least once to attempt to resolve the
dispute ("Dispute").
(ii) The Senior Management Representatives may meet more
than once to resolve the Dispute. The Senior
Management Representatives may meet in person, via
telephone, videoconference or any other agreed means of
instantaneous communication to effect the meeting.
(iii) Each party warrants that its Senior Management
Representative has full authority to resolve any dispute as
to the compensation payable.
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Part 3--Casino (Management Agreement) Act 1993
s. 8
(iv) If the Senior Management Representatives are unable to
resolve the Dispute during the Negotiation Period, the
State must nominate an Expert by notice in writing to the
Company within 30 Business Days from the date of
expiration of the Negotiation Period ("Nomination
Period").
(v) Within the Nomination Period, the Company must also
nominate an Expert by notice in writing to the State.
(vi) Within 30 Business Days of the date of expiration of the
Nomination Period, the Experts so nominated will
endeavour jointly to determine the compensation (if any)
payable in accordance with clause 3(j)(vii). The Experts
must give to the parties any joint determination and their
reasons in writing within that 30 Business Day period. If
the experts jointly determine that compensation is
payable, the written determination must set out the
Experts' calculation of each component of the formula.
(vii) In determining the compensation (if any) payable, each
Expert must:
(A) act as expert and not as arbitrator;
(B) have regard to the provisions of this Agreement and
apply the principles set out in Annexure 1; and
(C) have regard to any written submissions made to it by
the State and the Company, and either Expert may
make such enquiries as it considers in its absolute
discretion to be necessary or desirable.
(viii) If either the Company or the State has failed to nominate
an Expert within the Nomination Period, the
determination of the compensation (if any) payable will
be made within 30 Business Days of the date of expiration
of the Nomination Period by the sole Expert nominated
by either the Company or the State as the case may be.
(ix) If the Experts are unable jointly to determine the Dispute
within the period of 30 Business Days referred to in
clause 3(j)(vi), then the Company and the State jointly
must, within 2 Business Days of the expiry of that period,
request the Law Institute of Victoria President to
nominate, within 10 Business Days of the date of the
request, another Expert ("Umpire") to make a final
determination of the compensation (if any) payable in
accordance with the following provisions of this clause
3(j).
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Part 3--Casino (Management Agreement) Act 1993
s. 8
The Umpire must give its determination and its reasons in
writing within 30 Business Days of its appointment. If
the Umpire determines that compensation is payable, the
written determination must set out the Umpire's
calculation of each component of the formula.
(x) Any determination of the Experts (or, in the
circumstances contemplated by clause 3(j)(viii), the sole
Expert) or the Umpire in accordance with this Annexure 1
will be final and binding on the parties in respect of the
relevant Trigger Event. However, within 20 Business
Days of the determination being notified to the Parties,
either the Company or the State is entitled to make an
application to the court for a declaration that, in reaching
the determination, the Experts, the sole Expert or the
Umpire, as the case may be, made an error in relation to a
question of law.
(xi) If the court issues a declaration to the effect that an error
has been made in relation to the relevant question of law,
whichever of the Company or the State sought the
declaration must immediately inform the Experts, the sole
Expert or the Umpire, as the case may be, provide them
with a copy of the declaration and request that they issue
an updated determination, together with reasons, in
writing within 20 Business Days of receiving a copy of
the declaration. That updated determination will be final
and binding on the parties in respect of the relevant
Trigger Event.
If the updated determination is to be issued by the Experts
and they are unable to agree on the determination within
the period of 20 Business Days referred to above, the
matter must be referred to the Umpire in accordance with
clause 3(j)(ix).
(xii) If the court issues a declaration to the effect that no error
has been made in relation to the relevant question of law,
the original determination of the Experts, the sole Expert
or the Umpire, as the case may be, will be final and
binding on the parties in respect of the relevant Trigger
Event.
(xiii) To the extent of any inconsistency between the terms of
this Agreement and the applicable rules for expert
determination published by the Law Institute of Victoria,
the terms of this Agreement prevail.
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Part 3--Casino (Management Agreement) Act 1993
s. 8
(xiv) In determining the compensation (if any) payable, the
Umpire:
(A) must act as expert and not as arbitrator;
(B) must have regard to the provisions of this
Agreement and apply the principles set out in
Annexure 1;
(C) must have due regard to any evidence submitted by
the Experts appointed in accordance with
clauses 3(j)(iv) and (v) as to their respective
assessments of the compensation (if any) payable;
(D) must act fairly and impartially as between the
parties, giving each party a reasonable opportunity
to:
(I) put its case and deal with the case of the
opposing Party; and
(II) make submissions on the conduct of the expert
determination;
(E) subject to clauses 3(j)(xiv)(A) to 3(j)(xiv)(D),
inclusive, may:
(I) proceed in any manner he or she thinks fit;
(II) conduct any investigation which he or she
considers necessary to resolve the Dispute;
(III) examine such documents, and interview such
persons, as he or she may require and may
make such directions for the conduct of the
determination as he or she considers necessary;
(F) must within 3 Business Days of nomination, disclose
to the parties any:
(I) interest he or she has in the outcome of the
determination;
(II) conflict of interest;
(III) conflict of duty;
(IV) personal relationship that the Umpire has with
either party, or either party's representatives or
Experts; and
26
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No. of 2014
Part 3--Casino (Management Agreement) Act 1993
s. 8
(V) other fact, matter or thing which a reasonable
person may regard as giving rise to the
possibility of bias; and
within 5 Business Days of receipt of any disclosure
referred to in this paragraph (F) a party may object
to the Umpire. If so, the Company and the State
jointly must, within a further 2 Business Days,
request the Law Institute of Victoria President to
nominate, within 10 Business Days of the date of the
request, a replacement Umpire for the purpose of
this clause 3; and
(G) must not communicate with one party without the
knowledge of the other party.
(xv) Each party must do all things reasonably necessary for the
proper, expeditious and cost-effective conduct of the
expert determination process contemplated by this
clause 3.
(k) Within 20 Business Days of the amount of compensation that is
payable by the State to the Company being agreed or determined
in accordance with this clause 3, the State must pay that amount
to the Company in cleared funds.
(l) Except as contemplated in clause 3(m), each party must bear its
own costs in complying with this clause 3.
(m) (i) Subject to paragraph (ii), the aggregate costs of the Experts
(and the Umpire, if applicable) will be borne equally by the
parties.
(ii) If the amount of compensation that is payable by the State
is determined by an Expert, Experts or Umpire and is:
(A) more than 10% below the amount set out in the
Company's Compensation Notice under clause 3(e),
the Company will bear the costs of the Expert,
Experts and Umpire, as applicable; or
(B) more than 10% above the amount set out in the
Company's Compensation Notice under clause 3(e),
the State will bear the costs of the Expert, Experts
and Umpire, as applicable.
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Part 3--Casino (Management Agreement) Act 1993
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(n) Nothing in this clause 3 will prevent a party from instituting
proceedings to seek urgent injunctive, interlocutory or
declaratory relief in respect of a dispute as to the compensation
payable.
(o) Time is of the essence of the parties' obligations under this
clause 3.".
__________________
28
Casino and Gambling Legislation Amendment Act 2014
No. of 2014
Part 4--Gambling Regulation Act 2003
s. 9
PART 4--GAMBLING REGULATION ACT 2003
9 Maximum number of gaming machine entitlements
(1) For section 3.4A.5(3) of the Gambling See:
Act No.
Regulation Act 2003 substitute-- 114/2003.
Reprint No. 5
"(3) The Minister, by Order published in the as at
16 August
Government Gazette, must from time to time 2012
specify the maximum number of gaming and
amending
machine entitlements under which gaming Act Nos
may be conducted in the State.". 114/2003,
60/2011,
(2) In section 3.4A.5(3A) of the Gambling 20/2012,
9/2013,
Regulation Act 2003, after "municipal district" 27/2013,
(where first occurring) insert "from time to time". 70/2013,
4/2014,
21/2014,
26/2014,
34/2014,
37/2014,
44/2014 and
56/2014.
LawToday:
www.
legislation.
vic.gov.au
10 New Division 5B inserted in Part 4A of Chapter 3
After Division 5A of Part 4A of Chapter 3 of the
Gambling Regulation Act 2003 insert--
"Division 5B--Extinguishment of unallocated
or forfeited entitlements on reduction of State
limit
3.4A.20K Ministerial Order for extinguishment
(1) If, on the taking effect of an Order under
section 3.4A.5(3), the number of gaming
machine entitlements under which gaming
may be conducted in the State will exceed
the maximum permissible number of
entitlements under which gaming may be
conducted in the State, the Minister may, by
Order published in the Government Gazette,
extinguish any unallocated gaming machine
29
Casino and Gambling Legislation Amendment Act 2014
No. of 2014
Part 4--Gambling Regulation Act 2003
s. 10
entitlements, including gaming machine
entitlements forfeited to the State under
Division 6, 7, 8 or 8A that have not been
reallocated.
(2) The Minister may make an Order under this
section in addition to, or instead of, making
an Order under section 3.4A.20C.
(3) In making an Order under this section, the
Minister must take the following matters into
account--
(a) if possible, entitlements that have never
been allocated must be extinguished
before entitlements that have been
forfeited;
(b) entitlements that have been forfeited
must be extinguished in the order in
which they were forfeited;
(c) the extinguishment must result in at
least 20% of all remaining gaming
machine entitlements authorising the
conduct of gaming in a region or
municipal district outside the
Melbourne Statistical Division;
(d) the extinguishment must not result in--
(i) more than 50% of all remaining
gaming machine entitlements
authorising the conduct of gaming
in an approved venue in respect of
which a pub licence is in force;
and
(ii) more than 50% of all remaining
gaming machine entitlements
authorising the conduct of gaming
in an approved venue in respect of
which a club licence or racing
club licence is in force.
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Casino and Gambling Legislation Amendment Act 2014
No. of 2014
Part 4--Gambling Regulation Act 2003
s. 10
3.4A.20L Effect of Order
(1) On the day on which an Order made under
section 3.4A.20K is published in the
Government Gazette--
(a) the gaming machine entitlements
specified in the Order are extinguished;
and
(b) any interest, right or privilege in or to
which those entitlements are subject
(other than an interest, right or privilege
held by, or granted in favour of, the
State) is, by force of this section,
extinguished.
(2) To avoid doubt, the extinguishment under
this Division of an entitlement that has been
forfeited to the State does not affect the
operation of section 3.4A.32 in relation to
the entitlement.
3.4A.20M No compensation payable
No compensation is payable by the State as a
result of the making of an Order under
section 3.4A.20K or the operation of
section 3.4A.20L.".
__________________
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Casino and Gambling Legislation Amendment Act 2014
No. of 2014
Part 5--Repeal of amending Act
s. 11
PART 5--REPEAL OF AMENDING ACT
11 Repeal of amending Act
This Act is repealed on the first anniversary of its
commencement.
Note
The repeal of this Act does not affect the continuing operation of
the amendments made by it (see section 15(1) of the
Interpretation of Legislation Act 1984).
32
Casino and Gambling Legislation Amendment Act 2014
No. of 2014
Endnotes
ENDNOTES
Minister's second reading speech--
Legislative Assembly:
Legislative Council:
The long title for the Bill for this Act was "A Bill for an Act to amend the
Casino Control Act 1991, the Casino (Management Agreement) Act
1993 and the Gambling Regulation Act 2003 and for other purposes."
By Authority. Government Printer for the State of Victoria.
33
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