REGULATORY FAILURE? The Case of Crown Casino

Casinos account for 18% of Australia’s $19 billion gambling industry.

What goes on inside them has been closed to public scrutiny and independent research.

REGULATORY FAILURE? The Case of Crown Casino, the new book  by Deakin University's Associate Professor Linda Hancock, is the first systematic independent Australian research on casinos; how they are run and how they are regulated.

"Casinos have gone ‘under the radar’ because of the focus on gambling in clubs and pubs; and because of the politics of regulation and the close relationships between the gambling industry and state governments dependent on gambling tax revenue, about 10% nationally," said Associate Professor Hancock.

The book has drawn praise from a number of national figures in Australia, including Senator Nick Xenophon, the Reverend Tim Costello and John Lepper, a Research Fellow from Lancaster University.

“Linda Hancock’s powerful work not only reveals the first-hand experiences of Crown Casino employees, it exposes the inadequacies of a regulatory system that seems designed to fail,” Senator Xenophon said.

“ This book highlights the need for the Commonwealth to take over gambling regulation before even more lives a ruined by this dangerous product.”

Reverend Costello, the CEO of World Vision Australian, said the book was an inside story of Crown Casino.

“Not the intrigues in the boardroom, but the personal accounts from the staff walking the carpeted floor. Crown Casino was established under a so-called 'best practice' self-regulatory model”, he said.

“But Linda Hancock's unique examination finds Crown's compliance falls short. More disturbing are her conclusions about the 'light-touch' of the state and the breakdown of enforcement of responsible gambling.

“ Crown's influence has only grown. And the State Government has been drawn into a deep dependence on dividends: dividends that come from the pockets of - in many cases - problem gamblers.”

According to John Lepper, the book throws a new  light on casino regulation.

“It shows that the effectiveness of light-touch regulation depends on how well casino staff are trained and how actively they are encouraged to help gamblers with problems,” he said.

“It has international application and should be read by all regulators and policy-makers.”

The triangulation method is used in the book to compare

• policy and legislation on casino codes of conduct and responsible gambling,
• what staff at Australia’s biggest casino, Crown Casino say about routine practices (on responsible gambling, responsible service of alcohol, safety issues and staff training); and
• the effectiveness of state gambling and liquor licensing regulators in enforcing “responsible gambling” and protecting citizens from gambling-related harms.

Regulatory failure is illustrated by the rupture between the four sub-systems, in the regulatory system in terms of “responsible gambling” (RG): government (policy and legislation), regulation, licensed gambling operator codes of conduct and casino floor worker enforcements.

According to Associate Professor Hancock,’s analysis, the primary purpose of gambling legislation in Victoria shifted in 2000 from tourism, economic development and employment to “responsible gambling”. 

"Codes of Conduct on Responsible Gambling are the principal means of implementing “harm minimisation” and responsible gambling," she said.

"There are over 30 different codes across the gambling industry in Australia.

"The question is: How well are codes implemented at the venue level? Are consumers being protected from preventable harms caused by gambling products in land-based gambling environments?"

The case study on Australia’s largest casino, Crown Casino takes an in-depth analysis of how regulation and enforcement of responsible gambling work in practice in liquor-licensed casino environment.

The book gives a detailed report of interviews with 225 Crown Casino employees covering responsible gambling, responsible service of alcohol (RSA), safety and staff training.

Interviews with 225 current Crown Casino staff who are union members have revealed:

• a serious breakdown in implementation of Crown Code of Conduct on responsible gambling
• unacceptable levels of violence
• poker machine players regularly urinating and even defecating on the gaming floor because they don't want to stop playing the machines
• an unwritten policy of calling taxis for injured patrons and staff, instead of ambulances which may trigger an emergency services report
• patrons being allowed to gamble while intoxicated even though this is against the law in Victoria
• low awareness amongst staff of the “signs” of problem gambling in the Crown Code
• half of those interviewed say they wouldn’t intervene even if a gambler was in a distressed state
• inadequate and 'phantom' training of staff

Operator practices demonstrate ineffective implementation of codes of conduct and staff turning a blind eye to problem gambling. 

Staff reports point to a 24 hour venue with inadequate standards of enforcement, bar revenue targets and exhortations to ‘keep people gambling’ and spending. The reported regularity of patrons being served alcohol to the point of intoxication (necessitating exit from the premises) beg the question of RSA.

 “All of this raises a lot of questions and issues which the book seeks to address in a clear and responsible way,” Associate Professor Hancock said.

These include.

HOW ADEQUATE IS GOVERNMENT REGULATION?

• Governments have embraced “responsive regulation” [a model combining deterrence and cooperation] which is inadequately implemented, given the risks of harm from gambling and intoxication. Hence the analysis finds that both gambling and liquor licensing regulators are “light touch”. Both gambling and liquor licensing regulators show a preoccupation with compliance issues and inadequate focus on consumer protection and public safety via RG and RSA.

• A chapter dealing with international best practice shows the Regulator should be comparing Crown Casino to Switzerland (on signs of problem gambling), The Netherlands (on protective player interventions), Canada (on use of loyalty data and smart cards) and New Zealand (on problem gambling identification and on how to regulate casinos for responsible gambling player identification). - not against liberal regulatory regimes like Macau and Las Vegas. Just on its Code of Conduct, Crown has only 9 signs for identification of problem gambling whereas Switzerland has 20 and New Zealand has 32.

• Comparison with the New Zealand regulatory review of casino licenses shows how the Victorian regulator fails to implement stringent enough expectations on Crown as a casino operator (no mandatory inventories of interventions; no use of player loyalty central monitoring system for problem gambling identification).

• “Light touch” regulation of Responsible Service of Alcohol (RSA) RegulationThe dual track system of liquor license enforcement by Responsible Alcohol Victoria and Victoria Police is not working to prevent risky drinking.

• The extent and nature of the range of concessions afforded to Crown Casino is concerning from a national perspective.

• The book asks whether government’s adoption of the model of “responsive regulation” works for “dangerous consumptions”.

REGULATORY FAILURE? The Case of Crown Casino is published by  Australian Scholarly Publishing, North Melbourne, $44.00 and is available at www.scholarly.info

Related information

• Commonwealth Government must move to control gambling regulation
• How The Age and Channel 10 covered the launch
• Associate Professor Hancock's research