New South Wales Unveils Hawkish Powers For Casino Regulator

August 3, 2022
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The New South Wales government is preparing to super-charge the powers of a new gaming regulator in Australia’s largest state, including the option of prosecuting individual company directors and executives.

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The New South Wales (NSW) government is preparing to super-charge the powers of a new gaming regulator in Australia’s largest state, including the option of prosecuting individual company directors and executives.

Legislation empowering the NSW Independent Casino Commission (NICC), which will operate in tandem with the Independent Liquor & Gaming Authority (ILGA), will be introduced to state parliament next week, racing and hospitality minister Kevin Anderson said in a statement on Tuesday (August 2).

Smarting from years of close scrutiny of the misconduct and negligence of executives and directors of Crown Resorts and The Star Entertainment Group, the government will implement “all 19 recommendations” of the Bergin Inquiry into Crown.

It will also introduce “additional measures to strengthen casinos’ compliance requirements”, including key recommendations of Victoria state’s Royal Commission into Crown Melbourne, according to the statement.

“The new regulator will be truly independent, and will be directly funded by the Casino Supervisory Levy paid by both casinos, with independent decision-making on licensing and disciplinary matters.

“With all penalties under the Casino Control Act to be increased at least tenfold and a new maximum fine of A$100m [$69m] for disciplinary action, the NICC will have scope to deal appropriately with serious misconduct of the type uncovered by various recent inquiries,” it said.

The legislation will end an era of de facto impunity for casino officials who break the law or fail to meet compliance standards, with new “executive liability powers” targeting those who “facilitated or knew about but failed to stop” serious misconduct.

Legislative reforms will include more frequent reviews of casino performance with Royal Commission-like powers that compel testimony and provision of documents; the appointment of independent compliance auditors; the introduction of cashless gaming, carded play, and the phasing out of cash transactions greater than A$1,000; tougher suitability tests or probity assessments for close associates and related entities of casinos; and continuous availability of gaming floor data.

“A multi-agency coordination committee with NSW Police and the NSW Crime Commission will be set up to guide the regulatory efforts of NICC and identify potential law enforcement collaborations in areas such as money laundering,” the statement said.

Anderson said the NICC will work with the ILGA in monitoring Crown’s improvements to a lackadaisical governance model that saw its entire board purged and paved the way for a takeover by US-based Blackstone Group.

“The conditional gaming period will enable the NICC to closely monitor Crown’s operations and ensure that the reform agenda is completed to the regulator’s satisfaction,” he said.

The NSW government announcement came on the same day that the Victorian state government introduced a second tranche of legislation for better policing Crown operations in Melbourne, with similar controls to the NSW initiative.

It also comes ahead of the ILGA-commissioned inquiry into Star Entertainment, a disastrous spectacle for the company and the wider industry that forced the resignation of most senior management and members of the board.

The government said in June that the NICC will be headed by a dedicated chief commissioner with the support of at least four ordinary commissioners, reversing years of redistribution of regulatory authority to bureaucrats with separate responsibilities.

It added that junkets would be banned, and that casino operators will need to provide suspicious transaction reports to both the NICC and transactions regulator AUSTRAC, along with tighter and verifiable due diligence into gamblers.

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