SAJC--report of inquiry into suitability of close associates - Portellos ...

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Inquiry into the suitability of certain close associates of the South Australian Jockey Club Report of gambling and a person’s individual interest in certain matters not being disclosed, the public interest will prevail. The exercise of these powers requires accountability; accordingly, the Independent Gambling Authority Act requires the provision to the Minister for Gambling of a report of each inquiry held by the Authority and, except where confidentiality is recommended by the Authority, the publication of that report by tabling in Parliament. 2.3 Racing club licensing arrangements and close associates In South Australia, wagering on races and other events is regulated under the Authorised Betting Operations Act 2000. Horse, harness and greyhound racing continue to be the major activities on which South Australians engage in wagering. The Authorised Betting Operations Act makes specific provision for the governance of the racing industry by the designation of suitable bodies as racing controlling authorities. The statutory function of racing controlling authorities is to register racing clubs so that the clubs may then be granted on-course totalisator betting licences. Since 1 October 2000, Thoroughbred Racing SA Limited has been the racing controlling authority for horse racing. In addition to performing its statutory function of registering racing clubs, it performs the role of a principal club under the Australian Rules of Racing, including all of the integrity functions for the racing event. It also receives payments under the contribution agreements entered into by SA TAB Pty Ltd (which holds the exclusive licence 1 for terrestrial off-course betting in South Australia), licensed bookmakers and wagering providers licensed or authorised in other Australian jurisdictions; these contributions are the principal source of funding both for the administration of racing and, more importantly, the prize money which in turn significantly supports owners’ costs of acquisition, accommodation, feeding and training of their horses. The present licensing arrangements have been in place since 13 December 2001. On that day the Authority granted licences (on-course totalisator betting licences) under section 34(1)(a) of the Authorised Betting Operations Act to the three racing controlling authorities and the 46 racing clubs then registered with them. 2 1 2 The licence is called the major betting operations licence. Of the 49 licences, 26 were granted to entities in the thoroughbred code: one to TRSA, one to the SAJC and 24 to clubs with racecourses in provincial cities and country areas. The SAJC licence covered three racecourses—Morphettville, Victoria Park (Adelaide) and Cheltenham—the latter two having been closed by the SAJC in the meantime. Since 2001, two of the country courses have been closed, and the clubs which operated them have surrendered their licences. 4
Inquiry into the suitability of certain close associates of the South Australian Jockey Club Report There are three key privileges associated with an on-course totalisator betting licence— ♦ exclusivity—the licence contains a promise that, for 15 years from grant, no other entity will be granted a similar licence in respect of that racecourse—this was not applicable to the licensed racing controlling authorities; ♦ racing—the licensee is authorised to conduct races on which other South Australian licensed wagering providers may accept bets; ♦ wagering—the licence authorises the licensee to conduct an on-course totalisator in respect of its own races, races held by other licensed racing clubs and other races which have been the subject of contingency approvals 3 . A key licensing criterion is that the licensee and its close associates must be suitable and that the Authority must be satisfied as to the standards of probity surrounding the racing event. In aid of these licensing criteria, the conditions of the licences require that the close associates (the members of the governing board or committee and the senior executives) be approved by the Authority. A requirement to obtain a regulator’s approval prior to acquiring a position of control or significant influence over a licensed entity is a standard feature of gambling licensing regimes for casinos, hotel and club gaming, wagering and lotteries both in Australia and in other major gambling jurisdictions. At the time the 49 licences were granted, the Authority recognised that many of the people involved in racing were community volunteers and that, if onerous probity requirements were to be imposed, the need for those requirements would have to be justified by reference to the risks the individuals posed to the integrity of the racing event and the wagering product. It was clear, despite the racing and wagering privileges associated with the licences, that the 46 clubs licensed for racecourses would not in a practical sense be undertaking either raceday integrity functions or the conduct of the on-course totalisator. In the case of horse racing, it would be TRSA and the stewards employed by TRSA who were responsible for the racing event, while SA TAB would be providing the on-course totalisator facility (under contract to the licensee 4 ). Accordingly, those 46 clubs’ licence conditions allow them relief for the requirement to have their close associates approved by the Authority in circumstances where they formally agree for their licensed racing controlling authority to undertake the racing 3 4 The practical effect of this is to allow on-course totalisator betting on races in Melbourne, Sydney and other interstate centres. Provision, under contract, of the on-course totalisator facility could legally have been undertaken by any entity with the appropriate technical capacity. The licensed racing club remains the principal with whom the racegoers have their bets and the taxation and duty arrangements for the betting are those for a licensed racing club. Nonetheless, the fact that the clubs’ contractor happened to hold the major betting operations licence provided a significant degree of assurance as to the integrity of the wagering. 5
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