Thursday, 1 September 2022

Casino Legislation Amendment (Royal Commission Implementation and Other Matters) Bill 2022

Introduction and first reading

The PRESIDENT (17:33): I have a further message from the Assembly:

The Legislative Assembly presents for the agreement of the Legislative Council ‘A Bill for an Act to amend the Casino Control Act 1991, the Casino (Management Agreement) Act 1993, the Gambling Regulation Act 2003 and the Tobacco Act 1987 to implement recommendations of the Royal Commission into the Casino Operator and Licence and other gambling reforms and for other purposes’.

Ms SHING (Eastern Victoria—Minister for Water, Minister for Regional Development, Minister for Equality) (17:34): I move:

That the bill be now read a first time.

Motion agreed to.

Read first time.

Ms SHING: I move, by leave:

That the second reading be taken forthwith.

Motion agreed to.

Statement of compatibility

Ms SHING (Eastern Victoria—Minister for Water, Minister for Regional Development, Minister for Equality) (17:34): I lay on the table a statement of compatibility with the Charter of Human Rights and Responsibilities Act 2006:

Opening paragraphs

In accordance with section 28 of the Charter of Human Rights and Responsibilities Act 2006, (the Charter), I make this Statement of Compatibility with respect to the Casino Legislation Amendment (Royal Commission Implementation and Other Matters) Bill 2022 (the Bill).

In my opinion, the Bill, as introduced to the Legislative Council, is compatible with human rights protected by the Charter. I base my opinion on the reasons outlined in this statement.

Overview

The Bill amends the Casino Control Act 1991 (the Casino Control Act), the Casino (Management Agreement) Act 1993, the Gambling Regulation Act 2003 and the Tobacco Act 1987.

It will deliver 12 recommendations of the Royal Commission into the Casino Operator and Licence (the Royal Commission), and complementary reforms, which together will ensure the casino is subject to strengthened harm minimisation and anti-money laundering measures and improved governance arrangements.

Human Rights Issues

The human rights protected by the Charter that are relevant to the Bill are:

• freedom of movement (section 12);

• privacy and reputation (section 13);

• freedom of thought, conscience, religion and belief (section 14);

• peaceful assembly and freedom of association (section 16);

• property rights (section 20); and

• rights in criminal proceedings (section 25).

Section 12—Freedom of movement

Section 12 of the Charter provides that every person lawfully within Victoria has the right to move freely within Victoria.

Clause 30 of the Bill makes changes to the exclusion framework at the casino, allowing a casino employee or the Victorian Gambling and Casino Control Commission (the VGCCC) to orally give a person a temporary exclusion order for a maximum of 24 hours. The clause introduces two offences for the casino operator where an excluded person enters or remains on the premises (new section 76B) or plays a casino game (new section 76C). Clause 31 also makes it an offence for a person who is the subject of a temporary exclusion to enter or remain in the casino.

The purpose of these amendments is to strengthen the existing exclusion framework at the casino by improving enforcement. Temporary exclusion orders are being introduced as a mechanism to address gambling harm at the casino, which the Royal Commission identified as carrying a significant cost to Victoria. The Royal Commission cited numerous examples of patrons gambling for long periods of time with little or no staff intervention or breaks. The introduction of a temporary exclusion order mechanism allows casino staff to intervene and require a patron to take a break in play for anywhere between 15 minutes to 24 hours. The break in play can assist patrons to reconsider their gambling away from the distraction of the gaming floor.

The right to freedom of movement may be subject to reasonable limitations in accordance with section 7 of the Charter. To the extent that clauses 30 and 31 of the Bill restrict freedom of movement, this limit is justified as the maximum 24-hour temporary exclusion period is not excessive and is designed to address the risk of gambling harm.

Section 13—Privacy and reputation

Section 13 of the Charter provides that every person has the right not to have their privacy, family, home or correspondence unlawfully or arbitrarily interfered with.

Clause 41 of the Bill makes it mandatory, from 1 December 2025 or earlier date declared by the Minister, for a patron to use a player card to play games at the casino, and further specifies that the player card must only be issued where the casino operator has verified the person’s identity in line with the regulations. Clause 47 provides the Governor in Council authority to make such regulations which will include such matters as the processes for verification of identity and the collection, storage and use of information provided by players. Improved identification was a recommendation of the Royal Commission and is intended to address money laundering through the casino.

If an interference with the right to privacy is lawful and not arbitrary, it does not come within the scope of section 13. In this case, the requirement for identification will be required by law (by the Casino Control Act) and not arbitrary as it will apply to all patrons at the casino. The information will only be collected in accordance with the law and requirements to be prescribed in regulations. Therefore, these clauses do not limit the right to privacy in section 13.

Section 14—Freedom of thought, conscience, religion and belief

Section 14 of the Charter provides that every person has the right to freedom of thought, conscience, religion and belief, including the freedom to have or adopt a religion or belief of their choice and to demonstrate that religion or belief in worship, observance, practice and teaching, both publicly and privately.

Clause 41 makes it mandatory to use a player card to play games at the casino, and further specifies that the player card must only be issued where the casino operator has verified the person’s identity in line with the regulations. Clause 47 provides the Governor in Council authority to make such regulations.

The improved identification requirements may restrict a person’s right to demonstrate their religious belief where that demonstration includes wearing religious dress that covers the face. However, these clauses of the Bill include high level requirements regarding the identification of patrons at the casino and the more detailed requirements and processes for identity verification will be prescribed in regulations, which will undergo a human rights impact assessment. It is therefore possible that these clauses alone do not engage the rights in section 14.

Improved identification was a recommendation of the Royal Commission and is intended to address money laundering through the casino. The Royal Commission attributed the increased risk and occurrence of financial crime at the casino to the anonymity with which people could access the casino and make large financial transactions.

The rights in section 14 may be subject to reasonable limitations in accordance with section 7 of the Charter. To the extent that the right to demonstrate a person’s religion or belief may be restricted by the Bill, the restriction is justified as the identification requirements apply universally and are proportionate to the significant risk posed by money laundering and other financial crime at the casino.

Section 16—Peaceful assembly and freedom of association

Section 16 of the Charter protects the right of peaceful assembly and the right of freedom of association with others.

Clause 16 of the Bill expands the current definition of an associate of a casino operator. Under the Casino Control Act, associates of the casino operator must be approved by the VGCCC and are monitored for ongoing suitability by the VGCCC. While most associates of the casino operator are likely to be corporate entities, the definition does include officers and persons who have relevant interests in the casino operator.

The new definition in the Bill may result in some persons who would not currently fall within the definition of associate becoming subject to the restrictions in the Casino Control Act where the VGCCC can refuse to approve a person becoming an associate or can require that an associate terminate their relationship with the casino operator. To the extent that the associates are natural persons, this may place a limit on the freedom of association.

The scope of section 16 is wide and includes the right to voluntarily form and participate in any kind of organisation for a common purpose. On a broad reading of the right, it is arguable that the freedom includes commercial relationships set up primarily for economic gain.

The justification for the limitation on freedom of association is based on real concerns raised by the New South Wales Independent Liquor and Gaming Authority’s Bergin Inquiry (which considered whether Crown Sydney was suitable to hold a casino licence in New South Wales) (the Bergin Inquiry) and the Royal Commission that certain persons who are in a position to control or influence a casino operator are not captured as associates under the current definitions. Both the Bergin Inquiry and the Royal Commission also identified ambiguities that make the definition of ‘associate’ difficult to apply.

To the extent that different treatment based on an association with the casino operator may engage the right to the freedom of association, any limitation is justified by the demonstrated risks posed by potential criminal activity of associates of the casino operator and the need for greater safeguards to ensure the integrity of casino operations as highlighted by the Royal Commission and other inquiries.

Section 20—Property rights

Section 20 of the Charter provides that a person must not be deprived of their property other than in accordance with the law. This internal limitation in section 20 means that as long as a limitation is prescribed by law, it is not necessary to demonstrate that it is ‘reasonable’ and ‘demonstrably justified’. The term ‘property’ is not defined in the Charter but can include both real and personal property including land, shares, leases and other rights and interests.

Clause 22 of the Bill inserts new section 36U which requires a person to obtain VGCCC approval before acquiring a relevant interest of five per cent or more in the shares of a casino operator or any of its holding companies or increasing such an interest. Similarly, Clause 20 of the Bill inserts new section 28AB which requires an associate to obtain VGCCC approval before increasing their relevant interest in shares in the casino operator or a holding company above the five per cent shareholding threshold.

Clauses 20 and 22, respectively, insert new sections 28AE and 36Y into the Casino Control Act which enable the VGCCC to instruct a person or an associate to reduce their relevant interest in the casino operator or holding company, or to seek a court order to enforce compliance with the instruction, including an order requiring the person or associate to dispose of shares or other securities. To the extent that these clauses restrict natural persons from acquiring or holding shares or securities in a company, they may appear to limit that person’s property rights.

The shareholding cap was a recommendation of the Royal Commission and is intended to prevent outside influence on the operations of the casino. Referring to findings of the Bergin Inquiry, the Royal Commission found that, as a dominant shareholder, Consolidated Press Holdings Pty Ltd exercised undue influence over the board of Crown Resorts.

Clause 26 clarifies and expands the role of a manager if the casino licence is suspended, cancelled or surrendered and strengthens the arrangements for statutory management of the casino. This includes provisions that the manager assumes full control and responsibility for all the property of the casino operator in relation to casino operations, and that they may manage that property or sell it to pay liabilities.

Clause 27, which inserts new section 22D into the Casino Control Act, prohibits a third party who holds a security interest in managed property to enforce that interest during the period of appointment of a manager or to take or enter into possession of any managed property during that period, except with the approval of the VGCCC. To the extent that these provisions restrict a third party who is a natural person from enforcing their interests or otherwise restrict the person’s rights with respect to their property, these provisions may be regarded as a limitation on that person’s property rights.

Clauses 26 and 27 implement recommendations of the Royal Commission, which found that the current scheme is unsatisfactory and most likely unworkable. The scheme is designed to ensure that the surrender, suspension or cancellation of a casino licence does not automatically bring an end to casino operations. These amendments ensure that the manager has appropriate power to carry on the operations of the casino where the licence has been surrendered, suspended or cancelled.

Clauses 26, 27, 20 and/or 22 are unlikely to limit the right in section 20 of the Charter as the deprivation, if any, will be in accordance with the law.

Section 25(1)—The right to be presumed innocent

Section 25(1) of the Charter provides that a person charged with a criminal offence has the right to be presumed innocent until proved guilty according to law. Any new offence that includes an exception, exemption, excuse or other defence may affect rights under section 25(1).

Clause 27 of the Bill inserts a new section 22C into the Casino Control Act, which creates an offence for the casino operator where the operator does not meet certain obligations during the appointment of a manager. New section 22C(2) imposes criminal accessorial liability on officers of the casino operator if the officer authorised or permitted the commission of the offence by the casino operator or was knowingly concerned in any way in the commission of the offence by the casino operator. Under new section 22C(3) the officer may rely upon the same defences that would be available to the casino operator.

The offence in new section 22C is justifiable because it represents a reasonable response to issues identified by the Royal Commission which included the casino operator being uncooperative and at times actively misleading the regulator.

Clause 30 inserts new section 76B into the Casino Control Act, which creates new offences for the casino operator or the person for the time being in charge of the casino where an excluded person enters or remains in the casino or the casino complex. New section 76B(3) provides an exception to the offence where the casino operator or person in charge of the casino has taken all reasonable steps to prevent that person from entering or remaining in the casino.

To the extent that the person in charge of the casino is a natural person, new section 76B(3) may engage the right to be presumed innocent by creating an exception for which the accused bears the evidential burden. However, this does not shift the legal burden of proof for the offence itself to the accused or require the accused to disprove an element of that offence.

Any limitations on the rights under section 25 of the Charter are justifiable to ensure compliance with the exclusion orders scheme in the Casino Control Act and to address the issues identified by the Royal Commission.

For the reasons set out above, I consider that the Bill is consistent with the Charter.

Hon Jaala Pulford MP

Minister for Employment

Minister for Innovation, Medical Research and the Digital Economy

Minister for Small Business

Minister for Resources

Second reading

Ms SHING (Eastern Victoria—Minister for Water, Minister for Regional Development, Minister for Equality) (17:34): I move:

That the second-reading speech be incorporated into Hansard.

Motion agreed to.

Ms SHING: I move:

That the bill be now read a second time.

Incorporated speech as follows:

Following the release of the report of the Royal Commission into the Casino Operator and Licence on 26 October 2021, the Government acted immediately to deliver nine priority recommendations through the Casino and Gambling Legislation Amendment Act 2021. This included establishing both the Special Manager and the Victorian Gambling and Casino Control Commission and providing the new regulator with strengthened and expanded powers to hold the casino operator to account.

The Government went beyond the Royal Commission recommendations in several key respects. The Casino and Gambling Legislation Amendment Act 2021 provided that Crown Melbourne’s licence will be automatically cancelled at the end of the period of Special Manager oversight unless the Victorian Gambling and Casino Control Commission is clearly satisfied that Crown is suitable to continue operating the Melbourne casino. The Casino and Gambling Legislation Amendment Act 2021 also increased the maximum fine the regulator can impose on Crown Melbourne for disciplinary action from $1 million to $100 million and fully repealed legislative provisions that prevented the State from making regulatory changes to reform the casino’s operations without incurring a liability to pay compensation to Crown Melbourne.

In its response to the report of the Royal Commission into the Casino Operator and Licence, the Government flagged that further legislation would be introduced into Parliament in 2022 to acquit actions arising from the remaining recommendations.

The Casino and Liquor Legislation Amendment Act 2022 was passed by Parliament in June 2022 and delivered a further two Royal Commission recommendations to strengthen the powers and functions of inspectors. The Act also embedded a focus on harm minimisation, ensuring this shapes every single decision the regulator makes. The Casino and Liquor Legislation Amendment Act 2022 also expanded the grounds for disciplinary action against the casino operator and completed the transition to the new regulator, the Victorian Gambling and Casino Control Commission.

The Royal Commission recommendation to establish a single patron bank account was delivered by the Victorian Gambling and Casino Control Commission on 29 June 2022 through a direction issued to Crown Melbourne.

The Government supports the remaining 21 recommendations and is acting to deliver key reforms across five areas:

• preventing money laundering and other criminal activity at the casino

• minimising the impact of gambling harm

• enabling the ongoing operation of a casino in the event the operator’s licence is cancelled, suspended or surrendered

• regulating the ownership and governance of the casino and its holding companies, and

• strengthening casino tax arrangements.

These reforms will make certain that the casino operator acts in a way that befits the privilege of holding the State’s casino licence. 

The Casino Legislation Amendment (Royal Commission Implementation and Other Matters) Bill 2022 (the Bill) introduces the most significant reforms to casino regulation in decades. It marks the next stage in the Government’s comprehensive response to the Royal Commission into the Casino Operator and Licence and will deliver 12 Royal Commission recommendations.

This Bill is the third tranche of legislation to be brought to Parliament since the Victorian Government tabled its response to the Royal Commission in October 2021 and acquits the commitment made last year to deliver reforms that address the findings of the Royal Commission.

The Government supports the remaining recommendations made by the Royal Commission not covered by this Bill and will implement them through a combination of further legislation, directions and administrative mechanisms over the next 12 months.

I now turn to the provisions of the Bill before the House, which will implement world first harm minimisation and anti-money laundering reforms. The reforms will result in some of the strongest measures in any casino in Australia or overseas.

Preventing money laundering and minimising gambling harm at the casino

The Royal Commission revealed the prevalence with which money laundering and other financial crime was occurring at the casino.

The Bill will reduce the risks of financial crime by removing the anonymity with which people can access the casino.

It will make carded play compulsory and prohibit the casino operator from issuing a player card to someone without first verifying their identity in accordance with requirements to be set out in regulations.

Cash transactions will be limited to amounts of up to $1,000 in a 24-hour period.

As outlined in the Royal Commission’s report, perhaps the most damning discovery from the Royal Commission is the manner in which Crown has dealt with the many vulnerable people who experience gambling harm. It is not only the gambler who suffers, but also their family, friends and the broader Victorian community.

The Bill will introduce mandatory pre-commitment to the casino to be fully implemented no later than 1 December 2025, requiring patrons to set limits on gaming machines before they play.

In addition to implementing Royal Commission recommendations, the Bill will overhaul the state’s pre-commitment system, YourPlay.

As the first step towards mandatory pre-commitment, the Bill will require any person who plays a gaming machine under a loyalty scheme at the casino to use YourPlay to track their play.

It will enable the Victorian Gambling and Casino Control Commission to publish information about individual venue compliance with YourPlay obligations.

There will also be an offence for a casino operator who does not disclose information about their loyalty scheme when requested by the Victorian Gambling and Casino Control Commission or the Minister.

Further, the Bill will impose stricter obligations on the casino operator in relation to excluded persons, such as making it an offence for the operator if an excluded person enters or remains on the premises.

In response to findings of significant failures by the casino operator to detect and deter money laundering or other forms of financial crime, the Bill will prohibit all third-party payments into the casino’s patron deposit account.

Enabling the ongoing operation of a casino where the operator’s licence is cancelled, suspended or surrendered

The Bill will ensure the smooth transition to a new casino operator in the event that the licence is cancelled, suspended, or surrendered.

This includes provisions that:

• authorise a manager to act as the agent of the former casino operator,

• require the former casino operator to support a manager and facilitate the operation of the casino, and

• prevent third parties taking possession of property, such as gaming equipment while used by the manager.

If the casino operator’s licence is cancelled, suspended or surrendered, the reforms will ensure that a statutory manager has the full set of powers needed to run the casino and smoothly transition it to a new casino operator.

The Bill will also ensure that the area on which Crown Melbourne is licensed to operate the casino is the area that would be sub-leased to any new casino operator.

Regulating ownership and governance of a casino operator and its holding companies

The Bill introduces new requirements to prevent outside interference in the running of a casino by a dominant shareholder.

The Government is committed to restoring the integrity of the casino licence and ensuring the failures exposed by the Royal Commission never happen again, regardless of who owns the Melbourne casino.

As recommended by the Royal Commission, the Bill requires those seeking shares of five per cent or more in the casino operator to first gain regulatory approval and imposes rules to protect the independence of the board.

The Bill will also give the Victorian Gambling and Casino Control Commission the ability to recover the costs of investigating and approving shareholdings at or above the five per cent shareholding threshold.

The Bill will introduce a new definition of associate to capture the broader range of individuals and organisations that have the potential to influence a casino operator including holding companies and their officers, and those holding shares above the shareholding threshold.

Additional reforms to the casino operations

In line with community expectations around health and safety, including the right of all Victorians to a safe workplace, the Bill will remove Crown’s exemption under the Tobacco Act 1987 so that smoking is banned in all areas of the casino.

Finally, the Bill will address the significant costs of casino regulation by reintroducing an annual supervision charge, which was levied on the casino operator up until 1 July 1997.

As Commissioner Finkelstein made clear in his final report, holding Victoria’s casino licence is a privilege, not a right.

The Victorian people are entitled to a casino operator that acts with integrity and transparency at all times, that works proactively to stamp out money laundering and illegal activity, and that prioritises the reduction of gambling harm.

This Bill is a vital step in ensuring Victoria has a casino operator that meets those expectations.

I commend this Bill to the house.

Mr RICH-PHILLIPS (South Eastern Metropolitan) (17:34): I move:

That debate on this bill be adjourned for one week.

Motion agreed to and debate adjourned for one week.