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Since we opened the consultation on proposed regulations for the new Class 4 venue payment system, the sector has raised some questions on matters that we can clarify including:

• that the new venue payment regulations do not apply to clubs that operate gaming machines on their own premises
• the Department’s position on air conditioning units
• DEM costs that are outstanding as at 3 October.

Some clubs have expressed concern that the new venue payment regulations apply to clubs and mean that clubs cannot pay their staff for non-gambling related activities. This is not correct. The regulations do not apply to clubs that have gaming machines on their own premises.

Although the regulations do not explicitly say that clubs are excluded, R5(1) says:

Corporate societies may make payments to venue operators for any matters only in accordance with the Act and these regulations.

The term venue operators is defined in the Gambling Act as:

The occupier of a Class 4 venue for which the licence application was required under section 65(3) to be accompanied by a Class 4 venue agreement where the occupier owns the primary business at the venue.

Section 65(3) provides that a venue agreement is required unless the Secretary is satisfied that:

The applicant is a club that intends to operate gambling equipment at a non-commercial Class 4 venue that—

• it owns or leases; and
• is mainly for the use of club members.

All of these sections together make it clear that the venue payment regulations do not apply to clubs that have gaming machines on their premises as they do not operate under a venue agreement.

However, if a club has gaming machines in a commercial venue and they have a venue agreement with that venue operator, the regulations do apply in respect of that venue and the club must make sure that any payments made to the venue operator comply with the regulations.

We have had many questions about whether our position on who should pay for air conditioning units has changed.

The Department agrees that air conditioning is a necessary part of the gambling space and the purchase of air conditioning units for the gambling space is a society administrative cost. Note that societies can pay only for air conditioning for the venue’s gambling space; air conditioning for the rest of the venue is the responsibility of the venue operator.

We have had some queries about development, enhancement and maintenance (DEM) costs that are outstanding as at 3 October. This concerns situations where a venue is being reimbursed by its society for DEM costs that have been approved and incurred before 3 October but have not been fully reimbursed as at 3 October.

The transitional provision of the regulations provides that a society may reimburse costs incurred by a venue operator before the regulations commence as if the regulations were not in force. This provision allows for outstanding DEM reimbursements to continue after 3 October, but only in situations where the outstanding DEM costs have been approved and incurred before 3 October.

Because the existing weekly Gazette notice limits will no longer apply from 3 October, societies will be able to repay any remaining DEM costs in a lump sum or continue their existing repayment arrangements as agreed with the venue.

Note that any DEM costs incurred between now and 3 October remain subject to the requirement that they be actual, reasonable and necessary. We will continue to assess venue cost schedules and DEM costs to ensure that they meet that test.

From 3 October, DEM costs will be the responsibility of venue operators.