The body responsible for regulating alcohol and gambling licences in Victoria has approved licences for people with criminal histories and links to alleged underworld figures by failing to thoroughly assess all licensing applications.
This is one of the findings of a review into the Victorian Commission for Gambling and Liquor Regulation that was released by the state’s auditor general on Wednesday.
The audit assessed the commission’s licensing and compliance functions, its oversight of Melbourne’s Crown Casino, the way it monitored compliance with gaming and alcohol regulations and its collaboration with other agencies.
It found the commission granted licences without properly assessing the suitability of applicants and their associates, leading to questionable decisions.
In one case, the commission’s licensing process identified that an associate and shareholder named on a licensing application had previous business connections with an alleged underworld figure barred from Victorian racetracks and Crown Casino.
But the commission’s compliance branch determined that “there probably wasn’t an issue arising from this association because there hadn’t been reports of contact between the alleged underworld figure and the applicant for two years”.
“This advice appears deficient as it was solely based on a review of publicly available information,” the auditor general found.
No attempt was made to obtain explanations and assurances about the nature and status of the association with the alleged underworld figure, or to obtain information from Victoria police.
It was also of concern that the licence was granted without any conditions attached to it to address the risks associated with the relationship, the report said.
The auditor general also found that the commission had not applied a level of scrutiny to Crown Casino “that reflects its status and risk as the largest gaming venue in the state”. In 2014−15, Victorians lost on average 2% of their household disposable income on gambling.
Dr Charles Livingstone, a senior lecturer and gambling researcher at the school of public health and preventive medicine at Monash University, said the auditor general’s report confirmed a number of concerns that had arisen from his own research.
Livingstone co-authored research on the commission’s decision-making process, highlighting the lack of a systematic approach to licensing decisions in its gambling jurisdiction.
“The auditor general confirms that the commission’s processes are below standard and attributes this to poor workplace culture, failure to integrate the previous liquor and gambling jurisdictions adequately, 30% budget and staffing cuts, and inadequate training,” Livingstone said.
“The report highlights what is an open secret amongst industry observers; that there are inadequate compliance checks, including for very serious issues including money laundering and the attendance at the casino of known criminal figures. Standard audits of gambling activity at the casino have also been substantially neglected.”
He said compliance remained a major issue for Victorian gambling venues and licensing decisions were ad hoc, often unreasonable and contrary to the interests of ordinary people, particularly those in areas of disadvantage and social stress.
The Alcohol Policy Coalition responded to the report by calling for increased scrutiny of liquor licence applicants.
The review found that over the past two years the commission has been unable to demonstrate that all alcohol licensing applications are properly examined and assessed before being approved.
A coalition member, Dr Mark Zirnsak, the director of justice at the Uniting church in Australia, said the findings provided further evidence that licensing decisions did not prioritise harm minimisation.
“The overwhelming majority of licence applications are uncontested, with only 1% of applications refused,” he said. “As a result, we have seen a boom in the number of packaged liquor licences in Victoria. Strong evidence links this rise with increases in alcohol-related harm.
“The liquor application process needs to be reviewed to place greater scrutiny on new licence applications and better protect Victorian children, families and communities.”
Alcohol was linked to three deaths and more than 100 hospital admissions every day in Victoria, he said.
