The Dispute Process - Are Random, Anonymous Site Visits from Gambling Commissioners Appropriate?

Jarrod True comments on the process for dealing with disputes with the Department of Internal Affairs and questions the validity of random, anonymous, site visits by Commissioners.

The (then) Minister of Internal Affairs George Hawkins in a 2003 Cabinet paper described gaming machines as:

“the most profitable and the most harmful mechanism for gambling in New Zealand.”

It is not surprising therefore that societies and venue operators find themselves on occasions in dispute with the Department of Internal Affairs.

The Department is required to give the society, the venue operator and the venue manager notice of any proposed action and the reasons for the proposed action before taking any steps to cancel or suspend a licence. The society and venue operator are then given 20 working days to make submissions to the Department. If after reviewing the submissions the Department decides to cancel the licence it must notify all the parties of the cancellation and again its reasons for the cancellation. The licence remains in force during the submission process and 15 working days after notice of cancellation has been received. This gives the society and the venue operator the opportunity to appeal to the Gambling Commission. If an appeal is made to the Gambling Commission within the 15 working day timeframe the licence remains in force pending determination of the issue by the Gambling Commission.

The Gambling Commission is an independent body. The Gambling Commission looks at the issue afresh. Of the six major class 4 gambling decisions that have been heard by the Gambling Commission to date, five been successful.

Once an appeal has been lodged with the Gambling Commission the Gambling Commission will allocate a timeframe for the exchanging of evidence and submissions. This typically requires the society or venue operator to file an agreed statement of facts, sworn affidavit evidence and written submissions within 20 working days. The Department is then given 10 working days in which to file any evidence and submissions in response. The society and venue operator then have a further 10 working days to file their submissions and evidence in reply.

The Gambling Commission does not ordinarily hold an oral hearing in respect of class 4 gambling matters. The issues are normally dealt with on the written affidavit evidence filed and the submissions made.

In respect of class 4 gambling matters there is no general right to appeal Gambling Commission decisions to the Courts. It is however possible for a decision of the Gambling Commission to be challenged in the High Court by way of a judicial review application. In an application for judicial review the High Court does not examine the merits of any decision but simply examines the procedure and process undertaken. The High Court looks at whether the action taken by the Gambling Commission was:

• within the Gambling Commission’s powers;
• reasonable and not based on any irrational consideration; and
• fair, ie did the parties receive a fair and unbiased hearing.

Given that the Gambling Commission has very wide powers to determine its own procedure and process, and the fair and unbiased hearing procedure established, a judicial review application would very rarely be successful.

The Commission’s practice of undertaking random, anonymous site visits could however result in a successful judicial review challenge. The High Court may consider this process to be a breach of the parties’ right to a fair hearing.

For example, in the recent Gambling Commission decisions regarding the suitability of tenpin bowling venues a Commissioner anonymously visited the tenpin bowling centres in question. Neither the Department or the venue’s solicitors were advised of the proposed visit and accordingly were not given the opportunity to comment or explain on any issue that may have been observed during the visit. The impression gained by the Commissioner during the brief, single, visit is likely to have had considerable influence on the Commission’s decision. The single site visit however only gives a small snapshot of the operation of the venue and can accordingly be seriously misleading. For example, in the tenpin bowling case had the venue been visited at 10.00am on a Wednesday morning the venue would have been patronised by 95% of people over the age of 60 years (this time being when the masters play their senior league competition). Had the inspection been undertaken at 3.30pm on a Thursday the venue would have been patronised by 95% of people under the age of 18 years (due to a school visit). Because the Commissioner remained anonymous during the visit the venue operator did not have the opportunity to comment on or explain any impression that the Commissioner would have gained during their short visit.

Although a site visit is an important part of the process, in order to ensure a fair hearing is received by all parties it would be prudent for any site visits to be notified and the parties given the opportunity to be present during the visit and comment on any concerns that the Commissioner may have.

In summary, the dispute process has proved to be effective and efficient. It may however be appropriate for the Gambling Commission to consider modifying how site visits are conducted by Commissioners in the future.

Jarrod True

, specialises in advising societies and clubs that operate gaming machines. Jarrod is happy to discuss gaming related issues.