An independent investigation into Victoria’s casino regulator has called for formal legislation banning junkets, increased probity of premium players and greater investment in both on the ground and investigative regulatory resources but cleared the authority of corruption or wrongdoing.
The investigation into the Victorian Commission for Gambling and Liquor Regulation (VCGLR), headed by Dr Ian Freckelton QC, was announced in July following accusations by five former VCGLR casino inspectors, which aired on local current affairs show Four Corners, that it was a “lapdog” of Crown Melbourne.
In-particular, the inspectors alleged they were actively blocked by the VCGLR from looking into money laundering at Crown, that the VCGLR took no action on reports of criminal activity and that Crown exercised undue influence on the VCGLR to the extent that “Crown were running the office.”
While the Victorian state government has already announced plans to overhaul gambling regulation via the establishment of a dedicated casino and gambling regulator, the 148-page Freckelton report, made public on Wednesday, said there was no evidence to support the claims of its former inspectors.
“We have not found any wrongdoing, corruption, unlawfulness, a breach of any laws/regulations or motivations based on improper purposes at the VCGLR based on any part of our investigation,” the report reads.
It does, however, outline a series of recommendations around the regulation of junkets and premium players.
In particular, it says junkets should “in substance, as well as in name … be legislatively abolished,” and that any form of future resumption under a revised model should “at least need to be made subject to the most stringent levels of regulator scrutiny.”
The report also suggests revising how the casino and regulator work together in regards to assessing risks around premium players, particularly via Internal Control Statements that are traditionally generated by the casino operator and approved by the regulator. Some of these, it says, have been overly “aspirational and non-specific” and therefore problematic as tools for regulation.
“There should be a review of the 2020 Internal Control Statement that regulates the casino operator’s probity assessments of premium players with a view to ensuring a satisfactory level of reliable and accountable evaluation of whether such persons are fit and proper persons and so that the regulator can effectively discharge its regulatory responsibilities over such assessments by the casino operator,” the report reads.
Consideration should also be given to “investing further in the resourcing and capabilities of the intelligence and investigation units within the compliance division of the regulator,” as well as to increasing the size of the regulator’s casino team to ensure appropriate staffing coverage at all times.
In a statement following release of the report on Wednesday, VCGLR chair Ross Kennedy said his team had been vindicated.
“The findings of the independent investigation deserve equal prominence with which the original allegations were broadcast,” he said.
“While it is pleasing that the investigation has confirmed the VCGLR’s integrity, there are references to historical shortcomings which have been addressed, and recommendations for further improvement which are welcomed, consistent with our reform program underway, and will be fully implemented.
“I take comfort that Dr Freckelton found no evidence of wrongdoing, corruption or unlawfulness of VCGLR employees or officers and current management are dedicated, professional and reflective.”