V ictorian Commission for Gambling Regulation Level 5, 35 Spring Street Melbourne Victoria 3000 Australia PO Box 1988, Melbourne Annual Report Victoria 3001 Australia Telephone 61 3 9651 3333 2006–2007 Facsimile 61 3 9651 3777 www.vcgr.vic.gov.au Annual Repor t 2006–2007 Victorian Commission for Gambling Regulation Office Level 5 35 Spring Street Melbourne Victoria 3000 Postal Address PO Box 1988 Melbourne Victoria 3001 Website: www.vcgr.vic.gov.au Office Hours 9.00 am to 5.00 pm Monday to Friday Switchboard Telephone: 61 3 9651 3333 Facsimile: 61 3 9651 3777 E-mail contact address: [email protected],gov.au Complaints hotline: 61 3 9651 3737 Inspectors at Melbourne Casino Southbank: Telephone: 61 3 9690 4657 (24 hours a day 7 days a week) Chairman’s Letter 30 October 2007 Minister for Gaming Parliament House Spring Street MELBOURNE VIC 3002 Dear Minister I am pleased to present the Annual Report of the Victorian Commission for Gambling Regulation for 2006–2007. This Annual Report is prepared in accordance with the provisions of the Financial Management Act 1994, the Gambling Regulation Act 2003 and the Casino Control Act 1991 and covers the period between 1 July 2006 and 30 June 2007. Yours sincerely Ian Dunn Chair 2 Contents Chairman's Letter 1 Chairman's Report 5 Part 1 – The Victorian Commission for Gambling Regulation 7 Overview 8 Objectives 9 Functions 10 Members of the Victorian Commission for Gambling Regulation 11 Organisational Structure 12 Key Achievements in 2006–2007 15 Corporate Governance 18 Part 2 – Report of Operations 2006–2007 by Intended Outcomes 19 Intended Outcome 1 20 Ensure that gaming on gaming machines, casino table gaming, wagering, lotteries, Club Keno and community and charitable gaming is conducted honestly and the management is free from criminal influence Intended Outcome 2 29 Regulate the use of gaming machines in casinos and approved venues, wagering equipment, Club Keno equipment, lotteries equipment and community and charitable gaming equipment Intended Outcome 3 32 Regulate the activities of key operatives in the gaming machine, casino, wagering, lotteries, Club Keno and community and charitable gaming industries Intended Outcome 4 35 Supervision and control of the Casino Intended Outcome 5 41 Foster responsible gambling Intended Outcome 6 44 Other operational matters Summary of Financial Results 52 Part 3 – Financial Report 2006–2007 57 Part 4 – Appendices 83 1 A Principal Legislation Administered by the Minister for Gaming 85 B Commencement Dates of New Legislation 86 C Subordinate Legislation 87 2 Ministerial Directions 88 3 Ministerial Determination – Community Benefit Statements 91 4 Victorian Commission for Gambling Regulation Rules 92 5 Decisions on Applications for New Premises and Venue Operator Licence Amendments 95 6 Commission Meetings, Inquiries and Hearings 2006–2007 97 7 Gaming Venues as at 30 June 2007 98 8 Bingo Centres and Approved Commercial Raffle Organisers as at 30 June 2007 111 9 Licensing Activities 112 10 Number of Active Licences at 30 June 2006 and 30 June 2007 114 11 Roll of Manufacturers, Suppliers and Testers as at 30 June 2007 115 12 Responsible Gaming Training Course Providers as at 30 June 2007 116 13 Community Benefit Statements – Summary of Claims 119 14 Gambling Player Loss and Taxes and Levies Paid 2006–2007 120 15 Player Loss from Gaming Machines – Statistical Data Fact Sheet 122 16 Distribution of Player Loss from Gaming Machines 123 17 Representation on Working Parties 124 18 Commission Whistleblower Procedures 125 19 Staff Profile by Position 2006–2007 131 20 Additional Information Available 132 21 Disclosure Index 133 22 Glossary 135 3 4 Chairman’s Report The changes in the global gambling market, and its challenges for regulators, are, I believe, the most important issues arising in 2006–2007. With its increasing focus on opportunities off-shore, PBL, Australian gambling market will be challenged. The increased Australia's largest company with a gambling focus, leads the competition in the market is prompting more innovation in game way in what I believe will be an increasing trend involving other and product design as well as non-gambling entertainment Australian companies. Most recently its announcement of its options at venues. intended demerger, and the dividing of the publishing and I have mentioned earlier the need for excellent relationships with gaming divisions, led to a substantial workload for the overseas regulators. The importance of such relationships is Commission. So too do the forays into Macau, where the demonstrated by the constant stream of regulators who visit the Crown Macau casino opened in May 2007, and into Canada and Commission from many countries in a variety of regions. It is Las Vegas. Fresh involvements with further overseas entities pleasing to hear from them that the rigour of our investigations inevitably lead to the need for investigation of new companies is renowned as being first-rate. And those sections of the and associates. Our good relationships with international Gambling Regulation Act 2003 that impose severe restrictions regulators are critical. upon the ability of the Commission, or its officers, to make I regard as inevitable the present trend in which not only PBL public matters which are the subject of our work, do permit the but also the other major players in the gambling market seek exchange of such material with our international or interstate further opportunities elsewhere. An examination of the Annual counterparts. In turn, their willingness to provide information to Reports of the Australian companies with a focus on gambling the Commission will be in jeopardy if they cannot be assured confirms what the Commission's data suggests, namely, that that it will remain confidential. the Australian market is not expanding. Indeed, in real terms The role of the Commission in dealing with applications for new many aspects of it are shrinking. premises approvals for gaming machines or for amendments to The topic which attracts most interest in Victoria is the permit more gaming machines has been mentioned in earlier expenditure by Victorian adults on gaming machines. This year reports. that figure has increased from $630 per adult to $639, an The work continues and will become more constant following increase of less than 1.5% and well below the CPI increase. the decision by the Minister for Gaming to introduce more I again point out that, in Victoria, the peak expenditure on regional caps. A consequence of this decision is that some 543 gaming machines occurred in 2001–2002 when it reached $696 gaming machines must be removed from existing venues in per adult. Had that figure kept pace with inflation, with CPI capped regions. No doubt the operators, Tabcorp and increase, or remained as a constant percentage of net Tattersall’s, will seek to have them introduced into other venues household disposable income, the figure would now be an in non-capped regions. estimated $739 per adult per annum. And expenditure in other This will lead to a significant workload increase for the areas of gambling is also flat. Any new venturers into the Commission, bearing in mind that a public inquiry must be 5 Chairman’s Report continued conducted for each proposal, and there are but three I must make reference to the Commission's work regarding the Commissioners. Although we can call upon the assistance of awarding of one or more Public Lotteries Licences. Last year I three Sessional Commissioners, each inquiry must be chaired by mentioned this matter and commented that I could say little, either the Chair or Deputy Chair of the Commission. because of confidentiality requirements. Regrettably, the Even leaving aside the work associated with the transfer of situation is not resolved, and our work is one of the matters gaming machines from capped regions, what must be stressed [amongst a large number] being scrutinised by a Select is that the issues to be considered are complex and the Committee of the Legislative Council. I can say, without consequences of our decisions, particularly when dealing with hesitation, that no-one has sought to improperly affect the work applications regarding new venues, are frequently very far of the Commission and that the probity of the Commission's reaching. Recent applications for new premises approvals have work has been maintained. A more complete report on this involved proposed projects often involving expenditure of $10 subject must await the completion of the lotteries licensing million to $20 million. Without the Commission's approval, the process. project will not eventuate. The consequences as to, for The Commissioners are supported in their work by a team of example, employment in a newly developing region, are serious. officers with great skill and dedication who provide exceptional Yet the Commission cannot grant an application unless satisfied advice and ensure that all aspects of the Commission's that the net social and economic impact upon the community in business operate smoothly. I would like to take this opportunity the region of the proposed venue will not be detrimental. We to thank all the Commission's staff, as well as my co- must accept that our decisions will be heavily scrutinised and Commissioners, including Sessional Commissioners, for their sometimes will be controversial. efforts in the past year. Ian Dunn Chair 6 Part 1 Victorian Commission for Gambling Regulation 7 Overview History Purpose The Victorian Commission for Gambling Regulation (VCGR) The VCGR seeks to provide a fair, responsible and crime free came into operation on 1 July 2004 following the proclamation gambling industry which optimises the benefits for all Victorians. of the Gambling Regulation Act 2003. As at 30 June 2007, the To achieve this outcome, the VCGR strives to be at the forefront responsible Minister was the Minister for Gaming, the of effective regulation of the gambling industry, guided by its Honourable Daniel Andrews, MP.