Melbourne Crown Casino 

The Victorian Auditor General’s Office (VAGO) released a report today (Tuesday) slamming the state’s alcohol and gambling regulator for being too weak, divided and disorganised to address problem drinking and gambling and for being too soft on Melbourne’s Crown Casino.

Auditor-General Andrew Greaves gave the Victorian Commission for Gambling and Liquor Regulation (VCGLR) an emphatic thumbs down across a number of key issues in his report and said a big shake up of the organisation and its work was needed.

What emerges is a picture of an agency which has dropped the ball on problem alcohol and gambling in Victoria; one which has put quotas, convenience and box ticking ahead of genuinely trying to head off high risk situations.

He criticised the agency for failing to clamp down on rogue venues that supplied alcohol to minors and drunk people and venues that allowed both groups to gamble.

The report said the Commission’s management approach and culture meant it employed “superficial inspection activities” and focused on meeting quotas rather than pursuing harm minimisation.  

There are signs too that criminal elements have been given too much freedom inside Melbourne Casino, the only Victorian venue that provides gambling and alcohol round-the-clock and the holder of 13 liquor licenses.

Mr Greaves said the Commission’s compliance division had “not applied a level of focus on the casino that reflects its status and risk as the largest gaming venue in the state” and its approach had been patchy, at best.

He said the Commission had “not paid sufficient attention’ to problem areas like barring people who had been excluded by police or keeping an eye on money laundering and problem gambling.

Melbourne’s Crown Casino was the subject of court judgements on Chinese money laundering at the end of last year, activities which involved regular large buy-ins and cash-outs of chips.

Players lost more than $1.8 billion at the casino in 2015–16.
Other criticisms of the VCGLR included:

• Licensing applications not thoroughly assessed before being approved. In some cases licenses were granted where applicants had hidden the truth about their past criminal convictions and associates
• Allocating resources to compliance activities inflexibly and based on factors other than risk
• Inadequate guidance and training for inspectors
• Unreliable data about liquor and gambling inspections

The A-G said the agency had an unstable management team and lacked leadership after delays filing the CEO role. He pointed to a negative, divided work culture where sloppy systems and procedures let abuses slip through the cracks.

Mitigating factors

But the Auditor-General acknowledged the multiple challenges the Commission faced, after suffering a 30 per cent reduction in staff and in its budget (in real terms) between 2012 and 2016. It also lost expertise after 46 experienced staff were made redundant in the first two years.

VCGLR was formed in 2012 out of a merger between Victorian Commission for Gambling Regulation (VCGR) and Responsible Alcohol Victoria (RAV), a business unit of the former Department of Justice.

The A-G’s report found that the merger had ignited anger over pay and working conditions because inspectors brought in from two difference agencies were not paid the same.

There were also 12 employee or industrial relations disputes which were a hangover from RAV, including serious bullying.

Morale was low too, with a survey revealing the Commission had the second lowest staff satisfaction levels in the Victorian public sector.

The Auditor General noted that the agency had to cope with venues being given responsibility for pokies at their own venues, which used to be controlled by a duopoly outside the Melbourne Casino and a dodgy IT system until integration in 2015.

Mr Greaves also commented that the VCGLR had made progress over the last two years to reorganise the licensing division and had begun to take a more risk-based approach to licensing and provided better training for staff.

But he concluded that ‘the scale of required reform is significant meaning that much work remains for VCGLR to become a fully effective regulator”.

“Ongoing challenges in merging the people, systems and cultures from VCGLR’s two predecessor regulatory bodies, along with the lack of a sufficiently risk-based approach, have precluded VCGLR from fully realising the benefits expected when creating a single regulator,” Mr Greaves said.

“These significant shortcomings continue to reduce assurance that VCGLR’s efforts are adequate to protect the Victorian community from the harms associated with the misuse and abuse of liquor and gambling.”

Recommendations

The chair recommended a number of measures to address these issues:

• Building VCGLR’s leadership capacity
• Having a specialist team to monitor the Melbourne Crown Casino
• Addressing serious systemic gaps in the compliance division
• Seeking additional budget to establish a presence in regional Victoria
• Reviewing and updating people and culture policies and practices
• Working better with other regulatory and enforcement bodies such as Victoria Police.