The National Gambling Reform Act 2012 (Act) is a new piece of Commonwealth legislation which aims to reduce the potential loss and gambling control problems caused by the use of gaming machines. The Act was passed by Federal Parliament on 29 November 2012 and came into effect on 12 December 2012.

The substance of the Act is three major reforms which deal with:

  • A pre-commitment system for users to set limits and time periods on their use of gaming machines
  • Implementation of warnings relating to the use of gaming machines
  • Limiting the amount of cash withdrawals from automatic teller machines on gaming premises (except casinos)

The three major reforms

Gaming machines must have a pre-commitment system that complies with the requirements of the Act. A pre-commitment system allows a user of a gaming machine, who chooses to do so, to register and set a limit (Loss Limit) for a state or territory on the amount that he or she is prepared to lose during a period (Limit Period) while using, as a registered user, any gaming machine that is located in that state or territory. This reform commences on 31 December 2018.

While gaming machines will be required to have pre-commitment systems, users may choose whether to register and set a Loss Limit. In other words, participation is voluntary.

If a person registers and sets a Loss Limit, once the person reaches his or her Loss Limit during a Limit Period, they will be prevented from using gaming machines located in the state or territory as a registered user for the rest of their Limit Period.

Amongst many other requirements, the pre-commitment system must be capable of providing a written transaction statement to the person upon that person’s request. The statement must include specified detail, including: the person’s Loss Limit; the length of time since the person last set or changed their Loss Limit or decided not to have a Loss Limit; the amount of money or credit the person has spent using, or won from, gaming machines in the state or territory during the last 12 months; and the number of times during the last 12 months the person was prevented from using or continuing to use gaming machines as a result of reaching their Loss Limit.

Regulations under the Act (which have not been drafted) may set out additional requirements for the pre-commitment system, on top of those set out in the Act. The regulations must be consistent with the scheme established under the Act and can’t be used to make the system compulsory.

The second major reform requires dynamic warnings to be provided electronically by gaming machines relating to the use of gaming machines. The warnings must relate to the use of a gaming machine by a specific person, or to the potential for harm from, and the cost of, using gaming machines generally. Regulations to be drafted under the Act will set out the form, frequency, content and position of these warnings. This reform also commences on 31 December 2018.

The third major reform limits the amount of cash that can be withdrawn from an automatic teller machine (ATM) that is on gaming machine premises (other than a casino). This law is not intended to affect any state or territory law that is capable of operating concurrently. In other words, any state or territory law that prohibits ATMs from being on gaming machine premises will not be affected. The Act contains an anti-avoidance provision enabling the Regulator to make a determination that captures ATMs that might not otherwise be covered. This reform commences on 1 February 2014.

Privacy

The Act ensures the privacy of users of gaming machines by including offences to protect, from unauthorised disclosure or use, any information that is obtained from pre-commitment systems, or otherwise obtained under the Act.

Manufacturers/importers

The Act also imposes controls on the suppliers of gaming machines, by requiring gaming machines that are manufactured or imported to be capable of providing for pre-commitment. This obligation is placed on the person who:

  • manufactures the gaming machine; or
  • imports the gaming machine.

This obligation commences on and from 31 December 2014. However, a person won’t breach the Act if a gaming machine is made available for use and there is no approved pre-commitment system for a state or territory that:

  • could operate in relation to that gaming machine; and
  • is available to be purchased.

Supervisory levy

Those who hold a licence to operate a gaming machine will be subject to a supervisory levy. The amount of the levy is imposed by a separate Act: the National Gambling Reform (Related Matters) Act (No. 1) 2012 (Related Act 1). The amount of the levy each operator will have to pay is to be calculated in accordance with a method prescribed by regulations made under the Related Act 1. These regulations are not yet available.

The purpose of the supervisory levy is to cover the costs of the Commonwealth in relation to the administration of the whole reform package. A cap applies to the total supervisory levy to be imposed. The current cap is the lesser of $10 million (indexed) or the actual amount of the cost to the Commonwealth for administration of the Act.

A person will have to pay the levy if they make a gaming machine available for use at any time during a Levy Period.

Regulation levy

A regulation levy is payable if a person makes a gaming machine available for use. However, the levy is not payable in certain cases specified in the Act. These include where the gaming machines are operated by a constitutional corporation or, importantly, if gaming machines comply with the requirements of the Act relating to pre-commitment systems and dynamic warnings.

The regulation levy is imposed under a separate Act: the National Gambling Reform (Related Matters) Act (No. 2) 2012. The levy is effectively 10% of gaming machine revenue earned during any month where the levy is payable. “Gaming machine revenue” is defined to mean the total amount of bets less total outgoings for each machine. “Outgoings” are defined to mean winnings (cash or credit) paid out and any amount contributed to a linked jackpot prize.

Regulator

The Act is to be enforced by a regulator (Regulator), who is named in the Act as the Secretary of the Department of the Minister who has a portfolio responsibility under the Act.

The Regulator and authorised persons have a number of powers to investigate and monitor compliance with the Act. The Regulator also has a number of options for enforcing the Act (see below). The Regulator may delegate powers to employees of the public service of a state or territory, or a body established for a public purpose by or under a law of a state or territory.

The Regulator appoints authorised persons who exercise the monitoring and investigation powers. The persons who may be appointed as authorised persons are Australian public service employees, or employees of agencies of a state or territory.

Regulator’s powers

Authorised persons have powers to enter public areas of gaming machine premises and observe practices relating to gaming machines, pre-commitment systems, and ATMs. They may enter premises and exercise monitoring powers to monitor compliance with the Act. They may enter premises and exercise investigation powers if the person has reasonable grounds for suspecting that there is evidential material on the premises that is connected with a contravention of the Act. Entry must be with the occupier’s consent or under an investigation warrant. Evidential material may be seized under a warrant.

The Regulator can require a person to produce information or documents. Certain persons may also be required to keep records of specified information relevant to the Act.

A range of actions may be taken by the Regulator to enforce non-compliance with the Act, including:

civil penalty orders may be sought from a court;

infringement notices;

  • injunctions to restrain a person from contravening a provision, or to compel compliance with a provision;
  • an enforceable undertaking;
  • compliance notices, if an authorised person reasonably believes that a person has contravened, which may require the person to take specified action to remedy the contravention. A failure to comply with a notice may be subject to a civil penalty; or
  • the publication of details of certain enforcement action taken.

The Trial – Mandatory Pre-commitment

The Commonwealth is intending to agree to the conduct of a trial to determine whether requiring all persons who use a gaming machine to be registered (ie, a mandatory requirement to register) delivers sufficient advantages over allowing persons to choose to be registered to justify implementing that requirement in all States and Territories. The Commonwealth may only agree to a robust trial that is independently designed, managed and evaluated. The Productivity Commission is required to review the results of the trial, as well as the progress gaming machine premises are making towards complying with certain requirements in the Act.

Research

The Director of the Australian Institute of Family Studies may undertake or commission research, or produce data and statistics, in relation to gambling. The Director is assisted by an Expert Advisory Group on Gambling that is to be established.