Social Impact Assessment Studies

Note: The NSW Social Impact Assesment process has been "frozen" by the state government while legislative amendments are being finalised, following the government review of the Gaming Machines Act.

A class 2 Social Impact Assessment (SIA) is required whenever a club or hotel proposes to increase its gaming machine numbers by more than 10. The government has introduced this process as part of its response to alleviating community concerns about problem gambling. More specifically, the SIA process has been designed to ensure that the social and economic benefits to the community from an increase in gaming machine numbers outweigh the costs.

The SIA process is a demanding one and requires significant research to comply with the legislation. This includes:
• Conducting member and visitor surveys to determine the Club’s user base;
• Consulting widely with the community in order to get their perspectives on the perceived impact of the proposal; and
• Reviewing secondary sources of information such as council planning documents, ABS statistics, DGR data, gambling literature and other social research sources.

Clubs must provide both the right quantitative and qualitative data to support their SIA application and demonstrate that the addition of more gaming machines will create more benefit to their community than harm detrimental. This challenge is even more daunting due to the difficulty in providing hard evidence to support the application.

Russell Corporate Advisory has developed proprietary techniques to demonstrate benefits and costs in a measured and scientifically defensible way. Our approach helps to address concerns such as:

Will the additional gaming machines create new problem gamblers?
Which members of the community are likely to be the source of the revenue from the additional gaming machines?
Who are the potential problem gamblers and what impacts will they have on the community?
Who will be the beneficiaries from the provision of additional gaming machines?

This last question has become paramount since the recent release of Department of Gaming and Racing’s “Outline on Community Facilities and Services as a Benefit”. These guidelines define benefits to include:
• Those groups who will receive community donations from the extra revenue generated from the additional machines;
• The expansion of community facilities, services or other things that will benefit areas or groups of people in the local community that will be funded from the increase in club net profits; and
• The benefits to recreational gamblers who choose to play on the additional gaming machines when in all likelihood they would not have played a gaming machine.

It is critical that clubs adopt a benefit driven approach to SIA’s for their applications to have any chance of success. Effectively, the only acceptable reason that a club can apply for more gaming machines is through providing a community benefit that can funded by revenue generated by additional gaming machines. Applying for extra gaming machines simply on the basis that the club will generate extra revenue is unacceptable.

For further information on Social Impact Assessments please contact Colin Farrell on 9957 6700.