Be Legal And Decent: Victoria Reads The Riot Act To Operators

October 20, 2023
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The regulator in the Australian state of Victoria has thrown down the gauntlet to gambling companies that fail to operate “decently as well as legally”, warning that the “days are over” for passive compliance practices.
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The regulator in the Australian state of Victoria has thrown down the gauntlet to gambling companies that fail to operate “decently as well as legally”, warning that the “days are over” for passive compliance practices.

Victorian Gambling and Casino Control Commission (VGCCC) chair Fran Thorn said the regulator is coordinating with other Australian gambling regulators, local governments within Victoria and harm minimisation groups to ensure “gambling operators are responsible for turning their minds to identifying and preventing harm”.

“It is no longer acceptable for them to sit on the sidelines passively waiting to be told what to do,” she told the Hume City Council Gambling Harm Symposium in northern Melbourne on October 2.

“Those days are over, and the operators must step up to their responsibilities.”

Thorn’s take-no-prisoners speech assured the gathering of gambling harm activists, academics and local politicians that the VGCCC had responded proactively to “the community’s despair and fury” over Crown Resorts’ compliance failures at Crown Melbourne casino.

The VGCCC commenced operations in 2022 after its predecessor regulator suffered extensive criticism from politicians, whistleblowers and the head of the Royal Commission into Crown Melbourne.

The regulator “was created to reflect changing community standards toward gambling and the harm it causes”, Thorn said. “Those changing community standards now form the keystone of everything we do.”

Since then, the VGCCC has become the most aggressive gambling regulator in Australia, outdoing other state and territory regulatory authorities, and even the federal online gaming regulator, with a series of heavy fines, joint probes with national money laundering agency AUSTRAC, stringent enforcement of harm technology and advertising requirements, and proactive warnings and advisories to every gaming sector.

Thorn’s comments this month reinforce that Victoria’s regulatory game has changed dramatically and could tighten further, with operators told they will enjoy a supportive relationship with the VGCCC only if they “behave decently and co-operatively”.

Otherwise, “if a licensee operates deliberately and maliciously out of sync with the laws and their licence, they can expect us to take every action against them at our disposal — and if that is insufficient, over time seek increased legislative powers”, she said.

“Failure to honour the duty of care to protect customers and minimise harm invites scrutiny into whether a gambling provider is complying with its other legal obligations — and they can be assured that scrutiny will take place,” she added.

Referring to the regulator’s position statement released earlier in the year, Thorn said the industry must take the initiative on compliance responsibilities.

“Let me put it as bluntly as I can. We expect gambling providers to operate decently as well as legally,” she said.

This is particularly the case in adopting a global harm minimisation approach, rather than consigning responsibility to a small pool of “problem gamblers”, she said.

“These are not just aspirations,” Thorn said. “We made it clear that we would have zero tolerance for industry participants that opportunistically or deliberately contravene their obligations and the law and/or deliberately attempt to frustrate or obfuscate the work of the regulator.

“And we continue to pursue that intent relentlessly.”

Harm minimisation has been central to the VGCCC’s revised mandate, featuring in the heaviest fines, while new licences for electronic gaming machines (EGMs) and wagering companies now include harm minimisation criteria.

Harm concerns are also at the core of the regulator’s collaboration with the Victorian Responsible Gambling Foundation in educating gamblers on their rights and risk of harm, Thorn said.

“For the past 30 years, concerns about harm have been pushed into the margins,” Thorn said.

“The common narrative about gambling had the effect of marginalising harm by only referring to it in the context of something conveniently labelled, ‘problem gambling’, and that this problem was experienced by a small proportion of people.

“This labelling has had the effect of minimising the impact of harm and tying harm to human failure,” she said.

“You’ll see no such language from us.”

Peter Cohen, the Melbourne-based director of regulatory affairs at The Agenda Group and a former Victorian gaming regulator, told Vixio GamblingCompliance that the VGCCC has shaken things up, forcing the industry to “understand that it has a responsibility to respect not just the legal framework within which it operates, but the community to whom it offers its products.

“It is refreshing to see the VGCCC making public statements about its expectations. This had not been a feature of the regulator in the last decade,” Cohen said on Friday (October 20).

“There can be no licensed operator in Victoria — whether it’s the casino, gaming venues or wagering operators — who should be in any doubt as to what is now expected of them by the VGCCC.”

Amid regulatory upheaval in other Australian states such as New South Wales and Western Australia, Cohen said the VGCCC’s transformation of industry oversight could exert influence nationally.

“Other gaming regulators around Australia will be watching what is happening in Victoria and can decide whether they need to modify their approach,” he said.

“The beauty of the federal system of government in Australia is that the gaming regulators in every state and territory can observe every other jurisdiction and see what works best and adapt it to their needs as necessary.”

However, David Green, the Melbourne-based principal of Newpage Consulting and a former South Australia state gambling regulator, warned that recent difficulties with Victoria's tax environment could place political pressure on the VGCCC.

"There is a risk that a regulatory policy of fining your way to compliance will ultimately cause the industry to become unattractive for investment, and reduce government revenues from gaming taxes to a level that may require an uplift in other taxes, or new taxes," he told Vixio on Friday.

Green said the state government has hit tax obstacles in a new ruling by Australia's apex court on electric vehicle road use that denied Victoria hoped-for tax revenue, and this, combined with school payroll tax and vacant land tax complications, can only make gaming taxes more vital to the treasury.

This "highlights the difficulty associated with having to supplement government revenues or replace significant tax revenue streams should they atrophy for any reason", Green said.

Crown Resorts' flagship casino has suffered hundreds of millions of dollars in fines at the hands of the VGCCC for its years of breaches, and its provisional licence is to be reviewed in early 2024 after a two-year probationary period.

Annette Kimmitt, the VGCCC’s CEO, previously said the regulator is preparing for a scenario in which Crown loses its casino licence, although in general the VGCCC has expressed satisfaction at the approach and record of the current owners, US-based Blackstone Group.

But the VGCCC has also taken a dim view of sloppy or negligent practices in digital segments, fining wagering giant Tabcorp Holdings A$1m ($630,000) last month for ignoring its concerns over a data centre outage in New South Wales state.

The regulator has also acted with unusual aggression toward the once untouchable slots segment, policing pubs and clubs to ensure pre-commitment technology is in place, and fining a leading slots operator A$550,000 for failing to install required software.

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