Risks associated with restrictions on gaming
machine supply
Finally, it is important to consider the impact on industry competition and
development of
policies designed to combat problem gambling. This issue raises questions
well beyond the scope
of this study. However, we comment here on one issue that arose during our
consultations,
namely that State or regional caps may lead to significant risks for less
financially sophisticated
clubs.
Our consultations revealed that gaming had increased the
financial stakes for clubs. Prior to
gaming, many clubs were relatively small operations with small investments.
Traditionally clubs
elect their boards, which does not always ensure extensive management
expertise. During our
consultations, we spoke to one small country club that was considering
installing gaming
machines, subject to a $0.5 million refurbishment of premises required by
the gaming machine
operator. For this small club, such an investment would take many years to
pay off. However the
proposed contract for the gaming machines was for only four years.
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