Asia round-up: Australasia focus featuring Paul Newson exclusive, The Star & SkyCity

In today’s Asia round-up, Advisor to Australian Gambling Regulation Law Firm Senet, Paul Newson, shares exclusive insights on the importance of sustained regulatory enforcement. Especially in a country where casinos have been hit with multiple accusations of alleged illegality.  

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Newson: Shattering the spell of limited consequences  

The spell of ineffectual fines and limited consequences for shortcomings and wrongdoing in the Australian gambling sector is broken. The enchantment wasn’t overcome with cogent public policy advice and argument; nor was it defeated by a subtle departure and incremental advance in regulatory intervention and penalties responding to aggravated breaches.

It was ruptured by biblical fire and brimstone in the form of an AU$80m (US$55m) Victorian Gambling and Casino Control Commission disciplinary action. An unambiguous reset and repudiation of conduct surfaced by the Victorian Royal Commission into the Casino Operator and Licence, and the previous regulatory settings. How else to describe this aggressive lurch towards Australian Transaction Reports and Analysis Centre (AUSTRAC) type penalties and watershed in gambling regulation, while recognising a history of mostly limited powers and sanctions, often timidly exercised?  

It takes a lot to disturb and materially re-posture regulatory settings. Public policy and regulation are enabled and constrained by the window of discourse, and in my experience, there has historically been fleeting interest and limited appetite to incur costs involved in meaningfully empowering Australian gambling regulators. Public policy ought to be evidence-informed, and alive to the universe of stakeholder perspectives and community expectations, but ultimately policy positions are determined by government ministers and quite reasonably involve trade-offs.

The spell of ineffectual fines and limited consequences for shortcomings and wrongdoing in the Australian gambling sector is broken. The enchantment wasn’t overcome with cogent public policy advice and argument; nor was it defeated by a subtle departure and incremental advance in regulatory intervention and penalties responding to aggravated breaches Paul Newson, Senet Advisor

Unfortunately, the odd place that gambling occupies in the Australian cultural milieu has meant that it is hugely popular with massive taxation windfalls for Australian state and territory governments. However, it is also actively resented and stigmatised by activists, media and interest groups to the extent that it disregards the sector’s enormous economic and social contribution; and can adversely impact responsible gambling outcomes. 

In my view, regulatory and sector leadership is fundamental to creating the conditions for innovation and efficient, and effective industry supervision is essential to secure industry integrity; as well as a sustainable sector that values and advances safer gambling outcomes, and is hardened against financial crime.  

Regulators' public denouncement of misconduct and serious penalties are necessary to disincentivise wrongdoing, and ensure accountability and public confidence. But governments must also grasp the significance of the sector and its associated regulatory complexities and risks, sparing everyone from incessant, often misconceived machinery of government and framework changes, robbing capability and leadership and delivering pyrrhic savings.

The sector must be supervised by highly competent strategic leaders with a sophisticated grasp of regulatory policy and practice, underpinned with a deep understanding of the sector and mettle to dispassionately engage in public policy discourse, build dialogue with the continuum of stakeholders and weather criticism. 

Policy settings should also support investment, cultivate innovation and recognise, if not noisily celebrate, the economic and social benefits arising from the sector while resisting stigmatising industry and responsible gambling. 

Finally, I think the tolerance for an industry de minimis approach towards regulatory obligations and responsible gambling across the sector is exhausted. There is a tremendous opportunity for leadership in the space, and for operators to distinguish themselves by investing in best practices, innovating and advocating for better responsible gambling outcomes, while also championing the industry and its economic and social contribution.  

The Star professes suitability as investigation looms 

An independent review will investigate The Star Entertainment’s Queensland casinos, following a series of allegations linking the operator to criminal activity in other states.   

Australia’s Cabinet has yet to decide who will lead the investigation, though a decision is expected next week. 

Minister Shannon Fentiman did, however, confirm that The Star’s eligibility to operate would be a condition of the investigation.  

She said: “We’re going to accept the findings of the Bell inquiry in New South Wales because they’re dealing with the same company. We need to put that in Queensland context about [The Star’s] ongoing suitability there."

Meanwhile, The Star has claimed it is suitable to hold a casino licence in Sydney, despite “significant deficiencies and failings,” as reported by ABC. 

In connection with an ongoing review of the operator’s Sydney casino, The Star has accepted prior misconduct but claimed all involved have since left the company. 

“The persons who engaged in the misconduct are no longer with the businesses. The Star respectfully submits that the review should conclude that it is presently suitable to hold the casino licence,” said Kate Richardson, a lawyer for The Star. 

SkyCity reports FY22 earnings guidance 

Subject to there being no material changes to the group’s current operating settings before 30 June 2022, SkyCity has reported that it expects normalised EBITDA of between AU$135m-AU$140m (US$94m-US$97m); and group normalised profit after tax (NPAT) of between AU$3.5m-AU$7m. Read the full story here.

Missed a big gambling industry story in Asia? Don't worry, Gambling Insider has you covered with our Asia round-up. 


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