The regulatory landscape for gambling operators is rapidly shifting. Today’s AFR Chanticleer article, coinciding with the Regulating the Game conference in Sydney, highlights an uneven playing field between casinos and other licensed gambling operators, noting a disparity of stringent oversight of casinos which is shifting gambling-related risks (12% increase in gambling revenue, 2024) towards pubs and clubs which face relatively lenient requirements.
AIHW research shows higher problem gambling rates in communities with more pubs and clubs operating poker machines.
These community-focused venues, as recently as 2023, were less likely to implement comprehensive AML/CTF measures compared to casinos, increasing the risk of money laundering and other illicit activities. Failing to mitigate harm to vulnerable individuals also creates ethical challenges, particularly for the Constitutions of member-focused organisations.
While compliance may be demonstrated on paper, licensees could still be aiding criminal activities and exploiting vulnerable individuals.
From a cultural standpoint, what is it about governance and leadership that incubates reluctance to implement appropriate risk-based mitigations at all organisational levels?
Change requires more than programs to enhance ethical mindsets and behaviours. Not withstanding stronger regulations, understanding the impacts and interdependence of governance, accountability, and remuneration on organisational culture, and in turn the risk and control environment, are core to driving targeted interventions and meaningful change.
An important lesson from the Banking Royal Commission is that industry-wide crises often follow ‘isolated industry events’. Organisations that ‘avoided a roasting at the banking royal commission’ were ahead of their peers in identifying and systematically addressing governance and culture-related vulnerabilities in support of embedding stronger risk and compliance practices.
For community-focused gambling operators, what does your culture say about organisational determination to prevent community harm, relative to financial performance?
Now is the time to get ahead of the regulatory and reputational curve.