Interview with Rod McAlpine, Director of the Norfolk Island Gaming Authority

Norfolk Island is a self-governing territory of Australia. It has its own Legislative Assembly and is not part of the Australian taxation and welfare systems. Norfolk Island also operates its own customs and quarantine services.

Relevantly for Australian gambling operators or operators seeking to enter the Australian market, the Norfolk Island Gaming Authority (the Authority) has the power, under Norfolk Island legislation, to grant wagering licences and other categories of gambling licences1. Accordingly, it is a licensing jurisdiction considered by potential online gambling licensees wishing to conduct a licensed online wagering business in Australia. Ladbrokes, for example, is a licensee of the Authority. The Authority is particularly popular with start-ups or overseas brands seeking to enter the Australian market.

In March 2015, the Federal Government announced a number of changes would take place in relation to Norfolk Island, including that:

  • the Norfolk Island Legislative Assembly would be dissolved and, from 1 July 2016, there would be a Regional Council in its place. This Regional Council would operate within the jurisdiction of New South Wales in a manner similar to the way in which Lord Howe Island, for example, is part of NSW.
  • Norfolk Island residents will also be part of the Australian federal tax and social security systems.
  • Norfolk Island residents would have access to the Australian health care system, including Medicare and the Pharmaceutical Benefits Scheme.

A number of Bills reflecting these changes, together with an Explanatory Memorandum, were introduced to Australian Federal Parliament on 26 March 2015. It is proposed, subject to the relevant legislation being passed, that laws reflecting these changes will commence on 1 July 2015 (provided the legislation passes through Parliament in May or June 2015).

Given the likely immediacy of these changes, we interviewed Rod McAlpine, the Director of the Norfolk Island Gaming Authority, for more information about these changes and, importantly, the likely effect of these changes on existing licensees and the future of Norfolk Island’s licensing regime as administered by the Authority.

  1. What is the reason for these changes?

The Joint Standing Committee on the National Capital and External Territories recently delivered a report titled “Same country: different world – The future of Norfolk Island”.2  This Report highlighted the urgent need to address critical governance, infrastructure and economic issues affecting Norfolk Island. The purpose of the Federal Government’s proposed changes is to address these issues.

  1. When will these reforms take place? The media reports suggest that 1 July 2016 is the relevant date. Is this correct?

It is anticipated that the Bill for amendments to the Norfolk Island Act 1979 will pass through both Houses of Australian Parliament in May/June 2015 and a transition process will commence in July 2015. This will provide a transition period of 12 months prior to the commencement of the operation of the Norfolk Island Regional Council on 1 July 2016.

  1. None of the information available, whether it is the official information released by the Federal Government or media reports, makes any reference to the Authority. At this stage, how will the Authority be impacted by these changes?

Very little detail is available at this stage. It remains business as usual for the Authority and we are working to ensure that we are included as part of the transition from the existing Legislative Assembly to the Norfolk Island Regional Council and that our licensees can, post 1 July 2016, continue to conduct business under their licences.

  1. Is the Authority currently accepting applications for licences?

The Authority is very busy at present and under its "business as usual" approach will continue to accept applicants. The Authority intends to continue doing business for Norfolk Island. However, all applicants will be made aware of these impending changes.

  1. At this early stage, do you see any benefits that may be incurred by the Authority and/or its licensees as result of these reforms?

We see some major benefits for licensees of the Authority and for Norfolk Island. However, we will need to work with the Federal Government to finalise the details of these benefits before we can be in a position to publicly announce these benefits.

Certainly, it is envisaged that each licensee will be able to continue to conduct its business as an Australian licensed business.

  1. Is it likely that the current requirements around tax that apply to the Authority’s licensees will change?

The Authority’s licensees have always been liable to pay tax under the Australian taxation system, on the basis that, under this system, tax is payable in the jurisdiction where a company earns its profits. Our duty rates and charges have always been attractive and very competitive. This is unlikely to change.

  1. Should the Authority’s licensees be doing anything different following the announcement of the reforms?

it is in a position to transition smoothly once the changes take effect, and that its licensees continue to enjoy all the benefits of a licence from the Authority, including the benefits which attracted existing licence-holders to Norfolk Island initially.

It remains business as usual for the Authority and its licensees. The Authority and our licensees are currently working closely together, and will continue to work in this manner going forward, to ensure a viable and prosperous future.

  1. Prior to the announcement of these changes, did the Federal Government consult with businesses that operate on Norfolk Island or, in the case of gambling operators, under licences granted by the Authority?

The Authority has not been approached by the Federal Government for our views. The Authority, through its licensees, makes a substantial financial contribution to Norfolk Island’s revenue and economy. The consultation process undertaken by the Federal Government appeared to be aimed at the residents of Norfolk Island, rather than government enterprises such as the Authority and its licensees.

Nonetheless, the Authority intends to engage with its licensees and the Federal Government to ensure that

We thank Rod McAlpine for his participation in this interview.