It looks like for the "scale.labels" of a kendoRadialGauge, even when set to "visible:false", the space the labels would have occupied is still present in the gauge area? So for "outside" labels, there will be empty space outside the dial. For "inside" labels, the pointer shrinks to where the tickmarks would be if they were displayed, but does not cross the range arcs, which would be preferable in this case.
I tried setting labels.font to "0px Helvetica" to see if this would shrink the space consumed beyond the dial for "outside" labels, but it didn't seem to. There isn't any defined way to have label space completely absent for "outside", rather than just invisible?