The latest trading round for gaming machine entitlements has resulted in 116 entitlements being sold and 26 being cancelled, reducing the number of machines operating in South Australia.
Minister for Business Services and Consumers John Rau said that the figure is twice the number of machines taken out of pubs and clubs following the first trading round.
“This is only the second trading round we’ve had since the introduction of a market-driven model and I am pleased that more machines are coming out of the system,” Mr Rau said.
“In the first trading round in June last year, 81 entitlements were sold, with 13 entitlements being cancelled.
“This trading round we’ve seen 116 entitlements sold and 26 entitlements cancelled.”
Under the trading system, sellers nominate a minimum price for their entitlements and buyers nominate a maximum price they are prepared to pay. The Liquor and Gambling Commissioner then matches up buyers and sellers to facilitate the sales. One in four gaming machine entitlements sold by hotels are cancelled.
Liquor and Gaming Commissioner Paul White said that the increase in activity during this second trading round demonstrates there is a desire by the market to engage in the trading rounds.
“The periodic trading round system is a fair, transparent, voluntary and market based system that allows pubs and clubs to offer to sell or buy entitlements as they require, while at the same time reducing the number of machines in pubs and clubs,” Mr White said.
Under this latest round, purchasers will pay $60,000 per entitlement, and sellers will receive
$45,000, with the difference making up for the entitlements being cancelled. Those prices compare with $72,630 paid by purchasers and the $54,472 received by sellers in the first round.
Following the announcement in December last year relating to the Adelaide Casino expansion, the Casino will need to participate in future trading rounds to secure additional gaming machine entitlements. Proposed amendments to legislation will allow this to occur from July 2013.
“It is expected this legislation, along with other reforms that I am yet to announce, will lead to greater activity in the market and accelerate the reduction of gaming machines in hotels and clubs,” Mr Rau said.
A copy of the formal notice of the outcome of this trading round will be sent to all gaming licensees and made available on the Consumer and Business Services website at www.cbs.sa.gov.au.
An announcement about the next trading round is expected to be made in March 2013.