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However, possible disadvantages of Victoria’s
EGM duopoly include:
the two operators have a considerable degree of
power vested in them and may be able to
extract monopoly rents;
venue owners have little or no choice over the
type of machines placed in their premises
and thus have little opportunity to exercise
managerial discretion. This is in contrast to
the position in NSW where hotels and clubs own
the EGMs and thus have full
responsibility. In Victoria, there is also no
scope for proprietors to adjust machine
payout rates in response to competitive forces;
and
most EGM venues invest heavily in facilities,
and thus become highly dependent upon
this source of revenue. However, the possibility
that the gaming operators could remove
EGMs and transfer them to other venues
contributes to a degree of uncertainty in
decision-making, particularly for the smaller
clubs.
kpmgConsulting Victorian Casino and Gaming
Authority
Report of the 1999 Longitudinal
Community Impact Study: Main Report
September 2000
19
3.4 Gambling taxation
Gambling is an important source of income for
governments, accounting for approximately
10 per cent of own-source revenues across the
states (see Figure 3.4). In Victoria, gambling
taxes accounted for 7% of total State government
revenue, or 11% of State revenue
excluding Commonwealth grants (see Figure 3.5).2
High gambling taxation has been justified
historically as a trade-off for permitting
activities
that were previously illegal.
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