After being stripped of the power to approve and renew gaming licenses by the Australian federal government in April, the Norfolk Island Gaming Authority is now to be permanently closed.

According to a report from The Guardian newspaper, the move follows a two-month investigation by officials in Canberra that found the regulator to be “barely viable” with internal controls that could “give rise to fraud and corruption”.

“The authority and the former administration have been more concerned about raising revenues from gaming licences than having due regard to its regulatory functions,” read the investigation’s conclusions. “We recommend that it not continue to operate in its current form.”

The investigation reportedly also concluded that the regulator for the small and once self-governing Australian territory was “largely ineffective” and had “failed to fulfill its regulatory role to an acceptable level” while highlighting a litany of serious concerns including a lack of transparency, oversight and resources alongside a disregard for risks or appropriate regulation as well as serious concerns over conflicts of interest in appointments.

Based on these findings and an earlier study by assessor Centium, Fiona Nash, Local Government And Territories Minister for Australia, stated that she was “entirely confident” that shutting the Norfolk Island Gaming Authority was appropriate.

“Gambling in Australia must be carefully regulated to ensure the integrity of our sport and to protect consumers,” said Nash, who is a member of the National Party Of Australia political party. “Before arriving at this decision, I asked Centium to undertake a further assessment to determine whether it would be possible to rectify the myriad of issues identified in the first report. Centium’s report made it abundantly clear that the authority is beyond redemption and that these problems cannot be resolved satisfactorily. As a result, I am entirely confident that closing the authority is the right thing to do.”

The Guardian reported that the Centium investigation found that the Norfolk Island Gaming Authority was “grossly under-resourced” while its director, Roderick McAlpine, had not formally disclosed that he was the brother-in-law of the island’s former minister for tourism, industry and development, which raised concerns about the latter’s influence on internal audits.

“Basic control elements are not in place such as governance and reporting structures, a risk register, contracts with key personnel, segregation of duties, controls to prevent conflicts of interest, staff remuneration processes and policies and procedures,” read the findings of the Centium investigation.

Nash reportedly explained that firms currently accredited by the Norfolk Island Gaming Authority now have until March to be licensed by another jurisdiction while the federal government intends to cover the “small shortfall” in revenues for Norfolk Island.

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