New South Wales’ peak clubs body, NSW Clubs, has gone to Australian Supreme Court to get a decision on an NSW Health interpretation of new laws regulating smoking in licensed clubs.
Bans on smoking inside venues came into effect on July 1. Clubs had to set up smoking areas at the required level of 75 percent open-air.
But health authorities draw an imaginary line down from the roof of this smoking area, which means that often this is less than 25 percent unenclosed.
ClubsNSW estimates that clubs spent more than $422 million.
But NSW Health inspectors have interpreted the same laws differently. They issued warning letters to some clubs relating to covered sections of the smoking areas.
Clubs can be fined $5,500 for each person smoking in the wrong area, and some fear that their new smoking areas may be ruled obsolete.
Seagulls Club chief executive Wayne Kendrigan said, "They acknowledge that we comply with our interpretation but they are not sure if we are right. We believe we are."
Figures show gaming revenue in these venues were down since July 1, with September showing a 7 percent drop.
Music NSW estimates gaming revenue makes up 75 percent of overall revenue.
The Australian Hotels Association, which is not involved in the court case, estimates publicans in NSW spent $300 million to $400 million to provide outdoor smoking areas.