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The Victoria state gambling regulator has again raised the bar for aggressive penalties against industry non-compliance, apparently prompting a hotel owner to sell its business over falsified records and abuse of customer identification.
In addition to an A$80,000 ($52,000) fine, the owner of the Rye Hotel on Melbourne’s Mornington Peninsula “offered to take all reasonable steps to sell the Rye Hotel”, the Victorian Gambling and Casino Control Commission (VGCCC) said in a statement dated Thursday (February 15).
The owner must also receive written permission from the VGCCC to be “an associate of any gambling industry participant” in the future, and can “not obtain any new financial interest in, or be employed by, any gambling industry participant connected with Electronic Gaming Machines (EGMs), without first notifying the VGCCC”.
The statement was amended on Monday or Tuesday this week, without changing its date, to delete the regulator's claim that it had ordered the owner to “sell the Rye Hotel and exit the gambling industry”.
No reason for the discrepancy between the statements was included in the revised version.
The hotel’s two integrity breaches included a staff cover-up of an inappropriate cash payout of gambling winnings to a customer in lieu of a cheque or electronic funds transfer (EFT).
The cash payout exceeded the A$2,000 threshold by only A$39, but it was enough for the hotel to falsify its records in concealing the transaction, the VGCCC said.
“The attempted cover up of the breach constitutes serious integrity failings and misconduct,” the VGCCC statement said.
The second offence involved the issuing of a winnings cheque to “an ineligible person” at the request of a second patron, whose identification was used to complete the transaction, it said.
VGCCC spokesperson Michael Aleisi confirmed with Vixio GamblingCompliance on Monday that the recipient of the regulatory order was Myndit Pty Ltd, controlled by hotelier and liquor magnate Peter Houghton, with the offending incidents occurring in February 2022 and March 2023, respectively.
Regulator data shows the hotel is licensed to operate 30 electronic gaming machines.
However, the VGCCC declined to answer Vixio questions to clarify the regulator's role in the sale of the hotel, or whether Houghton, as an “approved associate”, is individually bound by the new restrictions imposed on Myndit.
Houghton has offered the Rye Hotel for sale to Endeavour Group, the parent company of hospitality listco and slot machine giant Australian Leisure and Hospitality Group, itself the recipient of a A$600,000 penalty from the VGCCC in August over non-compliance in installing pre-commitment technology.
The Rye Hotel purchase was approved late last year by the Australian Competition and Consumer Commission (ACCC), which delivered a “not opposed” finding on December 7. The ACCC began its review in May, indicating the attempted sale began no later than two months after the second offence occurred.
An Endeavour Group spokesperson told Vixio on Monday that the sale has not been completed, but that the group remains intent on acquiring the hotel.
Armed with powerful legislation and a reformist stance, the VGCCC has taken the lead as the most aggressive gambling regulator in Australia, and possibly the Asia-Pacific region, after issuing heavy fines against, and ramping up scrutiny of, every gaming segment in the state.
Taking a degree of credit for the sale of a gambling licensee's hotel over a matter attracting less than a A$100,000 fine, in an industry whose corporate giants have suffered million-dollar fines in recent years, cements this status.
The regulator’s CEO, Annette Kimmitt, said the penalties for the Rye Hotel incidents will serve as a deterrent.
“Venue operators and owners need to understand the full extent of consequences for falsifying records and concealing misconduct,” she said in the statement.
“We know that honest mistakes happen. However, venue operators that attempt to cover up breaches will be caught and face serious repercussions.”
