Norfolk Island Gaming Authority report and action
05 November 2016
The Australian Government has released an independent report into the Norfolk Island Gaming Authority, which issues gaming licences valid throughout Australia.
The report was performed by the Centium Group, an audit and assurance firm which has expertise in the gaming industry.
It found, among other things:
- “Internal controls over the Norfolk Island Gaming Authority are inadequate and can give rise to fraud and corruption.”
- “…the Authority appears to have been ‘captured’ by the industry. As an example, the Authority was awarded the EGR Australia Award for ‘professional services partner’—the Authority should not be viewed as being a “partner”; its role is that of a regulator.”
- “The Authority has been operating in a non-transparent way with little to no reporting or communication with the Administration.”
- “The Authority has been grossly under-resourced. Basic control elements are not in place, such as: governance and reporting structures, a risk register, contracts with key personnel, segregation of duties, controls to prevent conflicts of interest, staff remuneration processes and policies and procedures.”
- “The Authority and the former Administration have been more concerned about raising revenue from gaming licences than having due regard to its regulatory functions;”
- “…the Director is the brother in law of the former Minister for Tourism, Industry & Development and the former Chief Minister…it was not formally declared and we found no formal documented declaration or a documented plan to manage the potential conflicts…”
- “We found the Authority in its current form to be barely viable.”
- “We recommend that it not continue to operate in its current form.”
The Centium review was conducted as part of the Federal Coalition's commitment to reform Norfolk Island and improve local governance. The Australian Government began to modernise Norfolk Island law in 2015 following requests from the Norfolk Island Government for assistance providing services and the gifting of $27.5 million to keep services running on the Island over five years prior.
Given the results of the report, Federal Minister for Local Government and Territories Fiona Nash said there was no choice but to wind up the Authority.
“Gambling in Australia must be carefully regulated to ensure the integrity of our sport and to protect consumers,” Minister Nash said.
“The decision to close the authority follows a careful and considered assessment of all available options. Before arriving at this decision, I asked Centium to undertake a further assessment to determine whether it would be possible to rectify the myriad of issues identified in the first report.
“Centium's report made it abundantly clear that the authority is beyond redemption and that these problems cannot be resolved satisfactorily. As a result, I am entirely confident that closing the Authority is the right thing to do.”
Operators with licences from the Authority will have until 31 March 2017 to seek licences in other jurisdictions.
The Australian Government will cover the small shortfall in revenue on Norfolk Island as a result of the closure of the authority.
The Authority was established by the former Norfolk Island Government.
Racing Australia, Racing Victoria and Racing NSW raised concerns in April 2016 around the Authority's poor performance and lack of probity checks on new licence applications. The Australian Government instructed the Authority to cease issuing new licences pending the outcome of the Centium review.
For more information on the Australian Government's Norfolk Island reform package, or to find a copy of the Centium report, please visit: http://regional.gov.au/territories/publications/index.aspx