Casino (Penalties) Amendment Bill

Second Reading

The Hon. K.J. MAHER (Minister for Aboriginal Affairs, Attorney-General, Minister for Industrial Relations and Public Sector) (16:52): I move:

That this bill be now read a second time.

I seek leave to have the second reading explanation and explanation of clauses inserted in Hansard without my reading them.

Leave granted.

This Bill proposes to amend the Casino Act 1997 and make related amendments to the Gambling Administration Act 2019 following unprecedented national scrutiny into casino governance and integrity.

To this end, the Bill includes a range of new and significantly increased penalties for contraventions of the Casino Act 1997 and Gambling Administration Act 2019, whetherimposed for criminal offending, as expiation fees or as a fine imposed by taking disciplinary action. The changes apply solely to casino operations and not to other gambling providers.

The Bill also establishes new causes for the Liquor and Gambling Commissioner (Commissioner) to take disciplinary action against the holder of the casino licence if:

circumstances come to light that show that the casino licensee, a close associate of the licensee or a designated person is found to have engaged in conduct that constitutes serious misconduct, or

if a court or tribunal in this State, the Commonwealth or a State or Territory of the Commonwealth has imposed a penalty (whether civil or criminal) on the casino licensee, a close associate or a designated person.

Furthermore, transitional provisions contained within the Bill clarify that the changes being made to the maximum fine that can be imposed by taking disciplinary action, as well as the new causes for taking disciplinary action, will apply retrospectively. This will address conduct which has occurred prior to commencement of the provisions (should such circumstances come to light), as well as to disciplinary action which has commenced but has not yet reached the stage of determining the penalty.

While the increased penalties set out in the Bill are certainly significant, being the first substantial increase to many of the provisions since the Casino Act was enacted in 1997, they are being sought to ensure that a penalty if imposed on the casino licensee is not simply treated as an acceptable cost of doing business in South Australia. The ability for the Commissioner and the courts to impose a significant monetary penalty is not unreasonable or inconsistent with the way that casinos across Australia are now regulated.

The measures contained in this Bill are intended to be proactive and not only designed to reflect the nature of the risks identified in the national casino environment, but also to address concerns about the efficacy of our state laws to regulate the Adelaide Casino now and into the future.

Over the last three years, we have witnessed a series of independent inquiries across New South Wales, Victoria, Queensland and Western Australia exposing widespread and serious integrity, compliance, governance and risk management issues at casinos operated by subsidiaries of Australia’s two largest casino operators, Crown Resorts Limited and The Star Entertainment Group Limited, leading to community calls for the wider casino sector to be subject to stronger regulatory scrutiny.

Findings of unsuitability, threat of licence suspension and other forms of disciplinary action taken by regulators in each of these States subsequently prompted extensive and willing remediation action by these casino operators accompanied by significant legislative reform to strengthen and enhance casino regulation, with fines of up to $100 million now being able to be imposed by regulators in Victoria, Queensland, New South Wales and Western Australia.

In comparison, the maximum fine currently able to be imposed on the casino licensee as a result of disciplinary action in South Australia is currently $100,000. Furthermore, in most cases, the maximum penalty for an offence if prosecuted before the courts is less than $50,000.

SkyCity Adelaide Pty Ltd (SkyCity) which holds the licence for the Adelaide Casino was not the focus of any of the interstate inquires. However it is currently the subject of multiple regulatory interventions, including—

action taken by AUSTRAC in the Federal Court of Australia for alleged serious and systemic non-compliance with anti-money laundering and counter-terrorism financing (AML/CTF) laws (which SkyCity has since indicated it will make admissions),

an investigation by the Hon Brian Martin AO KC (which the Commissioner has currently placed on hold) inquiring into the suitability of SkyCity to hold the casino licence and for its parent company SkyCity Entertainment Group Ltd (NZ) to be a close associate, and

monitoring by Kroll Australia Pty Ltd (Kroll) which has been appointed in response to a direction issued by the Commissioner. Kroll is to review SkyCity’s program of work focusing on its AML/CTF obligations and gambling related harm minimisation, to monitor implementation of that program of work and to monitor the operations of the Adelaide Casino for SkyCity’s compliance with its regulatory obligations relating to AML/CTF and addressing gambling related harm.

Furthermore, SkyCity’s counterpart in New Zealand, SkyCity Management Ltd which operates casinos in Auckland, Queenstown and Hamilton, is also the subject of proceedings before—

the New Zealand High Court for non-compliance with the Anti-Money Laundering and Countering Financing Terrorism Act 2009 (NZ), the equivalent to the Australian Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth), and

the New Zealand Gambling Commission, in relation to allegations that it had failed to comply with host responsibility requirements relating to the detection of incidences of continuous play.

This Bill reflects that the ability to conduct casino gaming in South Australia is a lucrative privilege bestowed only through the grant of a single licence issued by the state. Further, considering the scale of casino operations at the Adelaide Casino and the systemic risks identified in the national casino environment, the Bill provides a proactive response to calls particularly from within the South Australian community, for the Adelaide Casino to be subject to stronger regulatory scrutiny and accountability. It does this through a number of reforms.

First, the Bill addresses the currently limited options available to the Commissioner if cause for disciplinary action to be taken against the casino licensee arises. The current forms of disciplinary action available to the Commissioner (or the Licensing Court on review) include reprimanding the casino licensee, varying conditions of the casino licence, issuing directions as to the winding up of operations under the casino licence, imposing a maximum fine of $100,000, suspending the licence or cancelling the licence. The law also currently permits the issuing of a default notice requiring payment of up to $10,000. Short of suspending or cancelling the casino licence, there are currently limited repercussions for the casino licensee if found to have committed an act that is serious and fundamental in terms of the integrity of operating the Adelaide Casino.

To ensure there are meaningful consequences, the Bill provides that the Commissioner can impose a financial penalty on the casino licensee, either in the form of a default notice requiring payment of up to $1 million or by taking disciplinary action and issuing a fine not exceeding $75 million.

If the casino licensee is subsequently found guilty by a court of not complying with a requirement, order or direction of the Commissioner imposed as disciplinary action, the maximum penalty will also increase from $100,000 to $2.5 million.

Despite the Bill increasing the maximum fine for disciplinary action, the Bill does not change the power of the Commissioner to issue a reprimand, vary the licence conditions, give directions as to the winding up of operations, or suspend or cancel the licence.

The Bill also increases the maximum penalties which may be imposed by the courts if the casino licensee is found guilty of a range of critical offences to ensure they are an appropriate deterrent for the operator of a casino the size of the Adelaide Casino.

The Bill includes an increase to the maximum penalty arising from a contravention of the Casino Act 1997—

for failing to inform the Commissioner of certain transactions entered into by the casino licensee which as a result allow an outsider to acquire control or influence over the casino business from $60,000 to $500,000

for failing to get the Commissioner’s approval for a person to be a designated person under the casino licence (including a director of the licensee or a person who is employed or working in an executive capacity who exercises discretion, influence, or control in respect of business operations under the casino licence) from $20,000 to $250,000

for failing to notify the Commissioner of a person employed as a casino special employee or arising from the employment of a minor, from $20,000 to $250,000

if a designated person accepts a gift or gratuity from a person, from $20,000 to $250,000

if a person is found to have interfered with the proper operation of an approved system, equipment, machine or game to gain a benefit, from $50,000 or 4 years imprisonment to $500,000 or 4 years imprisonment

if a person manufactures, sells, supplies or has in their possession a device adapted to interfere with the proper operation of an approved system, equipment, machine or game to gain a benefit, from $50,000 or 4 years imprisonment to $500,000 or 4 years imprisonment

if a person is found using a computer, calculator or other device for the purpose of projecting the outcome of an authorised game to gain a benefit, from $50,000 or 4 years imprisonment to $500,000 or 4 years imprisonment

if a person, other than a special employee, removes cash or gambling chips from gaming equipment, from $5,000 to $50,000

if a child is permitted to enter or remain on the casino premises, from $10,000 to $500,000

if the casino licensee knowingly assists a child to enter or remain on the casino premises, from $10,000 to $500,000

if a person fails without reasonable excuse to comply with a requirement to produce evidence of age when requested by an authorised person, from $2,500 to $7,500

if a person subject to a barring order is permitted to enter the gaming area of the casino premises—

in the case of the barred person, from $2,500 to $7,500

in respect to the casino licensee, from $10,000 to $500,000

if the casino licensee is found guilty of the evasion and underpayment of casino duty required to be remitted to the Treasurer, from $100,000 to $50 million

if a person is found guilty of hindering or obstructing an authorised officer exercising powers under the Taxation Administration Act 1996 in relation to the calculation and reconciliation of casino duty, from $10,000 to $1 million.

The Bill also includes related amendments which will increase the maximum penalty arising from a contravention of the Gambling Administration Act 2019—

if the casino licensee fails to provide information at the request of the Commissioner, from $10,000 to $250,000

if the casino licensee fails to comply with a direction given by the Commissioner, from $100,000 to $500,000

if the casino licensee fails to comply with a mandatory provision of a responsible gambling or advertising code of practice—

for a category A offence from $20,000 to $75,000

for a category B offence from $10,000 to $50,000

for a category C offence from $5,000 to $35,000

for a category D offence from $2,500 to $20,000

if the casino licensee makes a false or misleading statement to the Commissioner, from $10,000 or imprisonment for 2 years, to $500,000 or imprisonment for 2 years.

Furthermore, the transitional provisions in the Bill make it clear that it is Parliament’s intention that disciplinary action may be pursued against the casino licensee not only in respect of future conduct, but also in respect of past conduct (including the conduct currently before the Federal Court irrespective of if the proceedings are finalised and a penalty imposed before or after the Amendment Act is enacted).

However, the Bill expressly requires that the Commissioner, in imposing a penalty, must take into account any penalty already imposed in proceedings taken in relation to matters the subject of the disciplinary action, and preserves the Commissioner's discretion not to take any disciplinary action whatsoever.

I commend this Bill to the House and I seek leave to insert the Explanation of Clauses in Hansard without my reading it.

Explanation of Clauses

Part 1—Preliminary

1—Short title

2—Commencement

These clauses are formal.

Part 2—Amendment of Casino Act 1997

3—Amendment of section 3—Interpretation

This clause provides for definitions of designated person and staff member for the purposes of the Act. These definitions were previously located in other sections of the Act.

4—Amendment of section 14—Other transactions under which outsiders may acquire control or influence

This clause increases the maximum penalty applying for an offence against section 14(2) of the Act from $60,000 to $500,000.

5—Amendment of section 14B—Approval of designated persons

Subclause (1) increases the maximum penalty applying for an offence against section 14B(1) of the Act from $20,000 to $250,000.

Subclause (2) increases the maximum penalty applying for an offence against section 14B(2) of the Act from $5,000 to $50,000.

Subclause (3) increases the maximum penalty applying for an offence against section 14B(6) of the Act from $10,000 to $75,000.

Subclause (4) deletes the definition of designated person, now proposed to be located in section 3.

6—Amendment of section 20—Applications

This clause increases the maximum penalty applying for an offence against section 20(3) of the Act from $10,000 to $75,000.

7—Amendment of section 23—Investigative powers

This clause increases the maximum penalty applying for an offence against section 23(3) of the Act from $10,000 to $100,000.

8—Amendment of section 28—Interpretation

This clause deletes the definitions of designated person and staff member, now proposed to be located in section 3.

9—Amendment of section 32—Offences in relation to special employees

This clause increases the maximum penalties applying for an offence against section 32(1) and (2) of the Act from $20,000 to $250,000.

10—Amendment of section 35—Special employees and designated persons not to accept gratuities

This clause increases the maximum penalty applying in relation to an offence against section 35(1) of the Act as it applies to a designated person from $20,000 to $250,000.

11—Amendment of section 41—Interference with approved systems, equipment etc

Subclauses (1), (2) and (3) increase the maximum penalty applying in relation to an offence against section 41(1), (2) and (3) from $50,000 to $500,000 respectively. Subclause (4) increases the maximum penalty applying in relation to an offence against section 41(4) from $5,000 to $50,000.

12—Amendment of section 43—Exclusion of children

Subclauses (1) and (3) increase the maximum penalty applying in relation to an offence against section 43(3) and (4a) from $10,000 to $500,000.

Subclauses (2) and (4) increases the maximum expiation fee applying in relation to an alleged offence against section 43(3) and (4a) from $1,200 to $5,000.

Subclause (5) increases the maximum penalty applying in relation to an offence against section 43(6) of the Act from $2,500 to $7,500. Subclause (6) increases the expiation fee applying for an alleged offence against section 43(6) of the Act from $210 to $425.

13—Amendment of section 44—Licensee's power to bar

Subclause (1) increases the maximum penalty applying in relation to an offence against section 44(6) of the Act from $2,500 to $7,500. Subclause (2) increases the expiation fee applying for an alleged offence against section 44(6) of the Act from $210 to $425.

Subclause (3) increases the maximum penalty applying in relation to an offence against section 44(7) from $10,000 to $500,000. Subclause (4) increases the expiation fee applying for an alleged offence against section 44(7) of the Act from $1,200 to $5,000.

14—Amendment of section 45—Commissioner's power to bar

Subclause (1) increases the maximum penalty applying in relation to an offence against section 45(5) of the Act from $2,500 to $7,500. Subclause (2) increases the expiation fee applying for an alleged offence against section 45(5) of the Act from $210 to $425.

Subclause (3) increases the maximum penalty applying in relation to an offence against section 45(6) from $10,000 to $500,000. Subclause (4) increases the expiation fee applying for an alleged offence against section 45(6) of the Act from $1,200 to $5,000.

15—Amendment of section 45A—Commissioner of Police's power to bar

Subclause (1) increases the maximum penalty applying in relation to an offence against section 45A(5) of the Act from $2,500 to $7,500. Subclause (2) increases the expiation fee applying for an alleged offence against section 45A(5) of the Act from $210 to $425.

Subclause (3) increases the maximum penalty applying in relation to an offence against section 45A(6) from $10,000 to $500,000. Subclause (4) increases the expiation fee applying for an alleged offence against section 45A(6) of the Act from $1,200 to $5,000.

16—Amendment of section 48—Accounts and audit

This clause increases the maximum penalty applying in relation to an offence against section 48(1) of the Act from $50,000 to $500,000.

17—Amendment of section 50—Duty of auditor

This clause increases the maximum penalty applying in relation to an offence against section 50(1) of the Act from $10,000 to $250,000.

18—Amendment of section 52—Evasion and underpayment of casino duty

This clause increases the maximum penalty applying in relation to an offence against section 52(1) of the Act from $100,000 to $50 million.

19—Amendment of section 52AA—Investigatory powers relating to casino duty

This clause increases the maximum penalty applying in relation to an offence against section 52AA(5) of the Act from $10,000 to $1 million.

20—Amendment of section 72—Regulations

This clause increases the maximum penalty able to be imposed for a contravention of a regulation from $2,000 to $15,000.

Schedule 1—Related amendments and transitional provisions

Part 1—Related amendment of Gambling Administration Act 2019

1—Amendment of section 8—General power to obtain information

This clause increases the maximum penalty applying to the holder of the casino licence for an offence against section 8(2) of the Act from $10,000 to $250,000.

2—Amendment of section 10—Commissioner may give directions

This clause increases the maximum penalty applying to the holder of the casino licence for an offence against section 10(3) of the Act from $100,000 to $500,000.

3—Amendment of section 16—Offence of breach of mandatory provisions of codes

Subclause (1) increases the maximum penalties applying to the holder of the casino licence or a person involved in an activity to which the Casino Act 1997 applies from those applying to other gambling providers as follows:

for a category A offence—$75,000;

for a category B offence—$50,000;

for a category C offence—$35,000;

for a category D offence—$20,000.

Subclause (2) increases the maximum expiation fees applying to the holder of the casino licence or a person involved in an activity to which the Casino Act 1997 applies from those applying to other gambling providers as follows:

for a category A expiable offence—$5,000;

for a category B expiable offence—$2,500;

for a category C expiable offence—$1,200;

for a category D expiable offence—$425.

4—Amendment of section 36—Cause for disciplinary action

The amendments in subclause (1) extend the circumstances in which the Commissioner may determine there are proper grounds for disciplinary action against the holder of the casino licence to include the following:

an event occurs, or circumstances come to light, that show the licensee, a close associate of the licensee or a designated person has engaged in serious misconduct;

a court or tribunal in this State, the Commonwealth or a State or Territory of the Commonwealth has imposed a penalty (whether civil or criminal) on the licensee, a close associate of the licensee or a designated person.

The amendments in subclause (2) defines the terms close associate, designated person and serious misconduct for the purposes of the amendments in subclause (1).

5—Amendment of section 37—Compliance notice

This clause increases the maximum penalty applying to the holder of the casino licence in relation to an offence against section 37(2) of the Act from $100,000 to $1 million.

6—Amendment of section 38—Default notice

This clause increases the maximum sum able to be set out in a default notice given to the holder of the casino licence under section 38 of the Act from $10,000 to $1 million.

7—Amendment of section 39—Disciplinary action

Subclause (1) increases the maximum penalty able to be imposed by the Commissioner if the Commissioner takes disciplinary action against the holder of the casino licence from $100,000 to $75 million.

Subclause (2) increases the maximum penalty applying to the holder of the casino licence for an offence of failing to comply with a requirement, order or direction of the Commissioner under section 39 from $100,000 to $2.5 million.

8—Substitution of section 42

This clause substitutes the section as follows:

42—Other proceedings to be taken into account

The proposed section reenacts the current provisions of section 42, with the addition of a provision in paragraph (a) which provides that the Commissioner may take disciplinary action against the holder of the casino licence—

whether or not civil or criminal proceedings have been, or are to be, taken in a court or tribunal in this State, the Commonwealth or a State or Territory of the Commonwealth in relation to the matters the subject of the disciplinary action; and

whether or not a penalty (whether civil or criminal) has already been imposed as a result of those proceedings in relation to those matters,

however, the Commissioner must, in imposing a penalty under Part 5 of the Act, take into account any penalty (whether civil or criminal) that has already been imposed in such proceedings.

9—Amendment of section 63—False or misleading statements

This clause increases the penalty applying to the holder of the casino licence for an offence against section 63 of the Act from $10,000 or imprisonment for 2 years to $500,000 or imprisonment for 2 years.

Part 2—Transitional provisions

10—Transitional provisions

This clause contains transitional provisions consequential on amendments in Part 1 of the Schedule.

Debate adjourned on motion of Hon. L.A. Henderson.