Gambling regulator is losing its way

Sensible reforms are needed to tackle the gaming industry.

GAMBLING is a massive growth industry in Victoria, with punters losing more than $5.1 billion a year to Crown Casino, suburban poker machines, sports betting, online betting and race tracks. Gambling losses are up more than $700 million in four years.

In such a climate effective independent oversight of the industry is essential. Clearly, this task can't fall to the State Government — it reaps almost $1.6 billion a year from gambling taxes and consequently has a massive conflict of interest. Responsibility for regulating the booming gambling industry lies with the Commission for Gambling Regulation, established by the Bracks government in 2004.

The commission's role is to ensure "responsible gambling" but it is failing to act in the manner expected of an independent statutory body. It has become too chummy with gambling operators, such as Crown Casino, and with the Government.

Consider its fourth review of the casino operator licence — handed down last year — which described Crown Melbourne as being "at the forefront of Australian casinos" and meeting "the requirements of an international world class casino". It went so far as to applaud Crown as "a world leader" in dealing with problem gambling.

Is it really possible that the commission has forgotten that it is not there to champion and promote gambling. It appears so.

Consider these facts. Last week, the Supreme Court criticised Crown's treatment of at least one problem gambler, Harry Kakavas, who turned over $1.5 billion playing baccarat at Crown between June 2005 and August 2006, and failed in his bid to sue Crown for his losses.

Justice David Harper said that while "general conclusions" could not be drawn from one case, Crown's process for allowing the known pathological gambling addict to return was "a pathetic excuse for world's best practice".

"Crown does present itself as a world leader in responsible gambling. Its relationship with Mr Kakavas does not give one any confidence that it deserves that status," Justice Harper said.

And then there was the deal to grant Crown Casino its biggest gambling expansion in more than a decade. On May 4 Treasurer John Lenders wrote to the Commission outlining the proposed deal and said — "I would appreciate the VCGR's assistance in treating with its approval and review powers expeditiously".

The very next day Crown chief executive David Courtney wrote to the commission outlining the deal that included an expansion to Crown's boundary, allowing for 150 new gaming tables and up to 200 terminals for fully automated table games. (The automated terminals had not previously been permitted in Crown but were in use in Victorian pubs and clubs as poker machines.)

How long did it take Victoria's gambling regulator to consider the biggest changes at Crown in a decade? One day.

In a letter of reply the commission wrote that it did "not see any reason why its necessary consents, approvals and amendments should be provided or made. No impediments appear to exist." It continued: "The commission is influenced by the fact that the proposed changes do not involve any variation in the number of electronic gaming machines, bearing in mind that the playing of electronic gaming machines is acknowledged as the most likely initiator of problem gambling."

This was political gold for the Opposition. Gambling spokesman Michael O'Brien declared: "In my view that was a dereliction of duty on the part of the [regulator] — to say that because there is no increase in electronic gaming machines and any expansion of the rest of the casino will not have an impact on problem gambling is just a dereliction of duty."

The Opposition later took on the mantle that should have been worn by the commission and demanded the Government facilitate a social and economic impact statement for the deal.

This is only part of the story. In the past two weeks Victorians have also read of money laundering and suicides at the state's monopoly casino. It seems that there is truth in the claim by a leading problem gambling advocate that Crown Casino enjoys a special relationship with the regulator. This is unacceptable. The public must be confident that there is a most thorough and independent oversight of the casino and gambling in Victoria.

This is especially true, as the poker machine industry will soon undergo its biggest transformation in almost two decades

when the Tatts Group and Tabcorp multibillion-dollar poker machine duopoly ends and pubs and clubs will be able to own, not just operate, poker machines for the first time. These changes will require increased scrutiny of potentially hundreds of poker machine owners. The worry is that the commission has shown itself incapable of doing this.

In the lead-up to next year's November state election, the Opposition is considering regulatory reform of gambling in Victoria — a no-brainer given that the need for reform has been plainly demonstrated this year.

The public has a right to expect proper and thorough scrutiny of Crown Casino and gambling in Victoria. If the Victorian Commission for Gambling Regulation is not doing the job it should be replaced.

Issued by The Age December 18th 2009

http://www.theage.com.au/opinion/society-and-culture/gambling-regulator-is-losing-its-way-20091217-kzuj.html