Casino Control Amendment Bill 2023
Ms Cate Faehrmann: As The Greens' spokesperson for gambling harm reduction, I reluctantly support the Casino Control Amendment Bill 2023. However, at the Committee stage we will be moving a relatively minor but important amendment in relation to the jobs guarantee agreement. The genesis of the bill goes back quite a number of years. The Star Entertainment Group has had the luxury of operating on prime Sydney waterfront since 1997. Since then it has had a monopoly on the operation of a casino in New South Wales. That was until the approval of Crown Sydney in 2015. However, before Crown Sydney could even open it was blocked from doing so after its parent company admitted to potential money‑laundering activity in its VIP accounts. The Bergin inquiry, commissioned under section 143 of the Casino Control Act, comprehensively investigated the conduct of Crown Resorts Ltd.
The inquiry reported in February 2021, finding extensive and extremely serious problems at the casino, including money laundering, links to organised crime and poor governance practices. Let us not also forget that the Star Entertainment Group was able to successfully lobby the former Government to ensure that Crown Sydney was barred from operating poker machines in its first 15 years of operation. Just 18 months later, the Star was subject to an inquiry of its own. The Bell review found that the Star Entertainment Group was unfit to hold its Sydney casino licence. The operator was hit also with a $100 million fine, the maximum allowable penalty under the law. In finding the Star unsuitable, the Bell report referenced "a systemic cultural problem" that flowed from the top down. In response to the review, Phillip Crawford, the head of the NSW Independent Casino Commission [NICC], stated:
The NICC has resolved that it is no longer in the public interest that The Star should remain in control of that licence, and that The Star is not currently suitable to be the holder of that licence.
But instead of stripping it of its licence, the NICC imposed an independent monitor on the Star, thereafter allowing the casino to keep operating under supervision, notwithstanding myriad serious legal and regulatory breaches. Members of this place should not be confused by the Star not having its licence revoked. In its response the casino commission made it very clear that:
If it were not for … the public interest to protect the thousands of jobs at risk, there might have been a different outcome.
For all intents and purposes, the casino received a mass bailout. In December last year the former Coalition Government announced proposed increases to casino tax arrangements that would have brought New South Wales tabletop and poker machine taxes in line with Victoria, somewhere in the vicinity of 60 per cent. But what did this Government do as soon as it got elected? It immediately rushed to bail out the casino by striking a deal to transition pokies tax increases over time, with a view to reaching the full rate by the end of the decade. That means that the Star's poker machines will be taxed at 20.91 per cent until 30 June 2024 before rates increase to 22.91 per cent from 1 July 2027 until 2030. That is extraordinarily low compared to rates imposed in Victoria, where poker machines are taxed almost three times as much in both casinos and pubs and clubs.
What does New South Wales supposedly get in return? We get the protection of jobs in the industry. We have a name for that. It is called "too big to fail." No other business gets the hand‑holding and special treatment that we have seen the Star receive this year. I cannot name any other business in New South Wales that has the luxury of the Treasurer saying, "Just pay the tax that you think that you can afford," and certainly not one with a proven history of facilitating organised crime and money laundering through systemic governance, risk and cultural failures. Let be me clear, all the Government has done is send a message that if a business is big enough and it can threaten enough jobs, its poor management and regulatory misconduct will be overlooked.
The bill, which allows the Government to enter into an agreement to crystallise the term of its deal with the Star, enshrines into legislation the message that casinos in New South Wales are too big to fail. The way the bill has come to be reflects that. To date the public has little to no visibility of the proposed jobs guarantee agreement, yet that is what the legislation is about—making sure that that the agreement is presented to this place. The Government has outlined the length of the agreement and the sliding tax rate between now and 2030 but little else has been shared. Media releases from the Government have announced concessions in favour of the casino—apparently before the legislation is even passed—to enable those agreements to be entered into. We are being told that if the Star's financial performance before 1 July 2030 is stronger than assumed in its forecast, adjusted rates will result in the Government collecting more taxes. However, the details of that arrangement have not been published.
Under the bill, it is proposed that once the agreement is finalised, the agreement must be tabled in Parliament within 10 sitting days. Ten sitting days from today is a long time—in 2024, in fact. That is the level of transparency and accountability we can expect from this Government, particularly when it deals with big corporations, and that is extremely concerning. The one commendable aspect of the bill is the amendment of section 156 of the Act to ensure that additional taxes, penalties, levies or duties would not give rise to compensation by or on behalf of the relevant casino operator. I have met with the United Workers Union [UWU], which talked me through the situation with the more than 3,000 employees at the Star, and that is a relevant consideration. I thank the UWU for running a good campaign. It is loyal and protective of its workers, particularly workers in that casino—one only has to look at the bill before the House today. We support the bill because of that work by the union and those discussions that we had. We support the bill.
Full text of the motion:
The Hon. Daniel Mookhey (Treasurer) moved:
The Government is pleased to introduce the Casino Control Amendment Bill 2023.
Through this bill, the Government is seeking to authorise the Treasurer to enter into a jobs guarantee agreement with The Star, clarify regulatory actions that are not subject to compensation from the Government and rectify an inadvertent omission in relation to major change approvals involving close associates of a casino.
Among other matters, this bill supports agreements that have recently been made with both New South Wales casinos, The Star and Crown Sydney, to increase duty paid by casinos.
As permitted by the Casino Control Act, casino duty rates are set out by agreement between the Treasurer and a casino, in a duty and responsible gaming levy agreement.
On 20 November 2023, I signed new agreements to increase the duty rates for both casinos.
As part of the negotiations with The Star in respect of those duty rate revisions, The Star committed to a jobs guarantee and to commence a cashless gaming trial in advance of its legislated requirement to implement cashless gaming.
The current bill provides the legislative foundation for the jobs guarantee. Following the passage of this bill, further binding agreements with The Star will be signed to provide the details of The Star's jobs guarantee and cashless gaming commitments.
The Star casino has agreed to enter into a Jobs Guarantee Agreement with the Government to protect over 3,000 jobs related to its Sydney operations over the next six years.
However, legislative powers are required to authorise the Treasurer to enter into this agreement and to apply penalties where the guarantee is not met.
The provisions of this bill will authorise the Treasurer to enter into a jobs guarantee agreement with The Star, through which The Star will guarantee a minimum number of persons are employed in relation to the Sydney casino. The bill will also authorise the Treasurer to impose financial penalties on The Star for failing to employ the minimum number of persons.
These amendments will allow the Government to protect the jobs of thousands of staff supporting The Star's Sydney casino until 1 July 2030.
Under the Casino Control Act 1992, the Government is not required to pay compensation to a casino operator for the regulatory actions described in section 156 of the Act. These are important provisions enacted last year in response to the Bergin inquiry.
They are important because they ensure the Parliament and the NSW Independent Casino Commission are able to properly regulate casinos without fear that doing so will result in casinos being entitled to compensation under commercial agreements. This is what the public expects.
This bill clarifies the provisions in the Act to ensure that no compensation is payable where an Act affects or overrides a commercial agreement between the Crown and a casino operator or imposes a tax, duty or levy, or the Government makes an announcement or statement or takes other action taken in preparation for a regulatory action.
The amendments in this bill make it clear that these actions are captured under section 156.
Under section 35 of the Casino Control Act 1992, casinos must obtain prior approval from the NSW Independent Casino Commission for any "major changes" in their operations. This includes people who become close associates of a casino. Close associates include senior executives, shareholders and related companies. Close associates must obtain approval from the commission to ensure they are "suitable" to be associated with a casino.
When the Casino Control Act 1992 was amended in 2022, it expanded the definition of "close associates". It also amended section 42A of the Act to allow the commission to designate certain close associates to be exempt from having to obtain regulatory approval, having regard to the degree of control or influence of the close associate over the casino business.
The amendments made in 2022 omitted to address a similar provision for close associates in the "major change" provisions in section 35 of the Act.
That omission means that an exempt close associate is still required to undergo an onerous probity assessment under the "major change" provisions. This is contrary to the legislative intention and undermines the purpose of the exemption created under section 42A of the Act.
This bill amends section 35 of the Act so that, when a "major change" involving a person becoming a casino's close associate is considered, the commission can have regard to whether the close associate holds or would be eligible for an exemption granted under section 42A of the Act.
The wording of the amendment will enable the commission to approve a major change involving a close associate in situations where the close associate is exempt or is assessed as being eligible for an exemption, where they have not yet been formally granted the exemption.
This bill provides important measures for the ongoing regulation of casino taxation and operations.
I commend the bill to the House.