Western Australia gambling regulator told to lift its game

Western Australia’s gambling regulator, Gaming and Wagering Commission, has been told by the Perth Casino Royal Commission it needs to lift its game when it monitors whether casinos are complying with the law, and beef up its own code of conduct.

The final report of the royal commission chaired by Neville Owen, who is also known for chairing the royal commission into the collapse of the general insurer HIH almost two decades ago, identifies weaknesses in the expertise of the gambling regulator.

It also finds that the companies that hold a casino license in Perth were unsuitable and that they needed to take remedial steps to fix their operations over a two-year period to become suitable again.

This makes it the third report from an inquiring body that has found Crown Casino’s operations failed to comply with the conditions of the license.

The final report of the Perth Royal Commission also proposed there be an independent monitor to oversee a remediation plan for the casino to get back to suitability.

This recommendation replicates the tighter regulation and scrutiny of the Crown Casino business that was recommended in the Victorian and New South Wales inquiries that reported last year.

One of the weaknesses identified in the approach taken by the Gaming and Wagering Commission in Western Australia is that it did not have a formal information-sharing agreement with AUSTRAC, the government agency that monitors the details of financial transactions to identify money laundering and terrorism financing.

The royal commission recommends an information-sharing agreement be sought with AUSTRAC and that the gambling regulator get help from an external expert on anti-money laundering to help it comply with its obligation to better regulate the way in which a licensed casino manages its money laundering and terrorism-financing risks.

There is also a suggestion that there needs to be more detailed guidance on how a conflict of interest – perceived or real – could arise for a person working for the gambling regulator.

It identifies four areas in which the code of conduct of the gambling regulator should be updated to provide more detailed guidance for individuals charged with regulating casino and gambling businesses.

A prohibition on participation in casino gambling is already covered in the documents but other ways in which a person working at a regulator might be compromised needed greater detail.

“It may not be advisable for GWC members to stay at a hotel at the Crown Perth Resort because there is a potential for gratuities to be provided, such as a free room upgrade or a free bottle of champagne, which may be perceived as benefits being provided by reason of the person’s position as a member of the regulator,” the report says.

Concerns were also raised in the report about the possibility of personal relationships between people working at the regulator and individuals working at the casino affecting independence and objectivity.

“Personal relationships between officers of the regulator and officers of the licensee, if not properly managed, have the potential to compromise the regulator’s objectivity and independence and the public’s perception of the same,” the report says.

“The GWC Code of Conduct does not explicitly identify how personal relationships give rise to conflicts of interest and how such conflicts should be managed.”

Further and clearer guidance is required, the royal commission report says, on conflicts that arise from the acceptance of gifts.

“Gifts and benefits, whether received or given, give rise to conflicts of interest. This is not to say that every cup of coffee or biscuit at a business meeting should have to be declared,” the report says.

“The Code could deal with trivial or low-value gifts and benefits in the same manner as the Department’s Gifts, Benefits and Hospitality Policy.”

A range of other recommendations for the governance of the gambling regulator includes the introduction of a board charter that gets reviewed periodically, and a board-skills matrix be developed so that the regulator’s board has a guide to what skills are needed to properly regulate the sector.