New South Wales Report Finds Lapses in Responsible Gambling Oversight
A new report released by the New South Wales (NSW) Auditor-General has found that the state's regulatory bodies are not effectively supporting harm minimization outcomes in their oversight of gaming machines. The 47-page report highlights a series of issues related to the implementation and enforcement of gambling reforms, including the slow pace of gaming machine reductions, inadequate communication regarding harm minimization objectives, limited compliance data, and shortcomings in staff training around responsible gambling practices.
LISTEN TO THIS ARTICLE:As of June 30, 2024, there were 87,749 gaming machines operating in the state, generating profits exceeding AU$8.4 billion (US$5.5 billion). The report noted that NSW houses more than half of all gaming machines in Australia. The state also has triple the number of machines per 1,000 adults compared to Victoria, the next most populous state.
Related: New South Wales Consultation on Reducing Gambling HarmDespite legislative measures outlined in the Gaming Machines Act 2001, which introduced a tradeable gaming machine entitlement system aimed at reducing machine numbers, the report found that the actual decrease has been marginal. In some years, it has even been reversed.
The report points out that although the Act aims to continually reduce the number of gaming machines, progress has been minimal. When the legislation was introduced, there were over 100,000 machines in operation.
Since the 2001–02 fiscal year, that number has only decreased by 13,758, averaging just 598 machines per year. At the current rate of reduction, the report estimates it would take more than 55 years for NSW to align with the national average of gaming machines per 1,000 adults.
A major concern highlighted in the report is the limited effectiveness of the Responsible Conduct of Gambling (RCG) training provided to venue staff. The training does not adequately prepare staff to proactively identify and address harmful gambling behavior. Furthermore, the Department responsible for overseeing this training lacks a structured framework for monitoring its quality, despite its importance as a key harm minimization measure under the current legislative framework.
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Current Regulations Misguided, Asserts Report
The report also found that recent regulatory activities have largely concentrated on ensuring compliance with specific legislative changes, such as restrictions on external signage promoting gaming machines, the placement of ATMs within venues, and requirements for Gaming Plans of Management and designated Responsible Gambling Officers. However, these efforts have not extended to assessing the real-world application of RCG principles, nor has there been a developed strategy to evaluate the influence of venue culture or staff behavior on gambling practices.
To improve oversight and enforcement, the Auditor-General has issued several recommendations to both the Department and the Independent Liquor and Gaming Authority (ILGA). The Department is advised to establish clear baselines and targets for harm minimization improvements, enhance enforcement of key regulations with direct harm minimization impact, and publicly report on its regulatory activities with a focus on measurable outcomes.
Additionally, it is recommended that the Department review the gaming machine forfeiture scheme. This includes reassessing all current exemptions and considering further measures to encourage voluntary forfeiture by clubs and hotels.
The ILGA is advised to begin periodic reviews of license conditions by June 2026 for venues operating in high-risk areas. It should also work to improve transparency around its decision-making processes for gaming machine applications and ensure that statements explaining these decisions are released in a timely manner. Venues whose applications are denied should receive detailed explanations for those decisions.
The Auditor-General stated that the purpose of the review was to evaluate how effectively the Department and the ILGA regulate gaming machines in clubs and hotels, with a particular emphasis on meeting harm minimization requirements. This included assessing the administration of gaming machine applications and the approach taken to compliance and enforcement of relevant legislation.
In response to the findings, the NSW state government confirmed that both the ILGA and the Department have accepted all recommendations outlined in the report. The government indicated that it would be working toward implementing these changes to strengthen oversight and reduce gambling-related harm in the state.
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