Compliance and Enforcement Policy - Liquor & Gaming NSW

All staff within our inspectorate, audit and investigative teams are inspectors appointed under section 20 of the Gaming and Liquor Administration Act 2007. This legislation allows our inspectors to exercise a broad range of statutory powers, including having free and unimpeded access to licensed premises, compelling persons to answer questions, issuing formal demands for information or records and seizing items for use as evidence.

We assign our inspectors to a broad array of covert and overt deployments across NSW in line with our regulatory priorities and consider that our inspectors have an important function to fulfil both from a monitoring and enforcement perspective, but also in an educative and supportive capacity.

When monitoring compliance, gathering evidence of suspected non-compliance, and exercising their statutory powers, our inspectors are required to do so in line with our regulatory principles, our internal policies, and our Code of Ethics and Conduct.

All inspectors must undergo a stringent probity assessment process prior to being appointed as inspectors and are considered to be of the highest level of integrity.

How we handle reports of non-compliance

Reports of non-compliance we receive are assessed against uniform criteria, which help determine what action we will take and ensure our decisions are consistent.

This process is the same for every matter we assess. Some of the criteria we may consider include:

• whether the conduct may contravene any of the laws that L&GNSW enforces
• the seriousness of the alleged conduct, including any associated risk or potential harms
• our regulatory priorities and delivery plan
• the most appropriate regulatory tool or option to use
• whether the issue or misconduct is ongoing, systemic, or spread across several industry sectors
• the likelihood and impact of continued or repeated non-compliance.
• the likelihood of a successful outcome
• the specific and general deterrent impact of our actions
• the impact our actions may have on industry participants and other stakeholders
• intelligence holdings we may have, including compliance history and previous reports of non-compliance received
• whether the resource requirements are proportionate to the ultimate outcome
• the objectives of the relevant legislation
• whether our action will assist to clarify aspects of the law
• community expectations and public interest considerations

We exercise discretion in determining whether we will commit resources to investigating a matter, which means we will, in some cases, decide to take no further action in relation to a report of non-compliance. All reports we receive that are within our jurisdiction are recorded for intelligence purposes.

We are less likely to apply resources to reports of non-compliance that:

• are frivolous, vexatious, not in good faith or raise low risk or trivial matters
• are a customer service or consumer issue, better dealt with by a licensee or operator
• are being investigated or better dealt with by another agency, particularly NSW Police
• reference historical allegations, so that investigation is impractical, or it is unlikely that enforcement action for an offence can proceed
• do not include supporting evidence, and such evidence could not be readily obtained
• are better resolved directly between the parties
• identify minor or technical misconduct or breaches that are likely to be isolated errors, or which the licensee or operator has already adequately remedied
• refer to conduct or breaches that have previously been investigated, even if the previous report came from a different source

We are not able to act as an intermediary or negotiate an outcome to resolve consumer issues. This includes not being able to recover funds lost during gaming play or due to the actions of a wagering operator, though we may still investigate whether an offence has been committed.

Anonymous reports

Anyone is entitled to make an anonymous report of non-compliance or may choose to identify themselves. Anonymous reports are not treated any differently, although the inability to obtain further information may impede our assessment process or any subsequent investigation.

Communicating the outcome of a report

We record all reports made to us for intelligence purposes but may not respond to every contact unless we require further information. If we investigate a matter, where appropriate, we will communicate the outcome to the person who reported it.

The amount of information we can provide is often restricted by our secrecy provisions or other factors, including privacy and commerciality considerations. As a result, we may not be able to provide specific detail on what action, if any, was taken in a particular matter.

Publication of guidelines

Our approach to the handling, assessing, and actioning of reports of non-compliance will change from time to time, depending on our identified regulatory priorities, emerging risks, resourcing levels and several other factors.

We may publish guidelines that set out our approach to a particular issue or risk, or that set thresholds for non-compliance reports we will accept.

These guidelines will be published on our website, including as fact sheets, where appropriate.

Dealing with offences

Although available remedies differ depending on the legislation involved, a range of options are available to us to deal with non-compliance or allegations of non-compliance.

These may include:

• engagement and education
• taking remedial action, by working with a licensee to review the facts and circumstances around a complaint, and identifying opportunities for improvement
• official cautions and warnings
• infringement notices
• prosecution
• administrative action, including:
  • civil disciplinary complaints
  • suspension or revocation of recognised competency cards
  • the imposition of licence conditions
  • issuing statutory directions.

Educational or remedial action and warnings

An educational or remedial approach may be suitable to address low risk matters, or where it is more useful or appropriate to educate a licensee or operator on their obligations and ensure future compliance than to take escalated enforcement action.

Offending conduct can often be addressed through engagement with a licensee or operator and may include a remote audit or review of relevant business records. Remedial action is most appropriately used in response to allegations of low-risk offences or conduct.

It may not always be appropriate to deal with detected offences by way of penalty notice, disciplinary or prosecution action. Where there are significant mitigating factors around the commission of an offence, or where it is otherwise considered to be appropriate to do so, a formal warning may be issued.

These warnings are recorded and form part of antecedents that will be considered should future offences be committed. When a warning is issued, it is done so in accordance with the Attorney General’s Caution Guidelines under the Fines Act

Penalty infringement notices and prosecution action

Where a more serious offence has been detected, where there is a poor compliance history, or where it is otherwise in the public interest do so, we may opt to deal with offences by issuing a penalty infringement notice or by commencing prosecution action.

The decision to issue a penalty infringement notice or commence prosecution is made by a committee.

Administrative and disciplinary action

Disciplinary action

Disciplinary action refers to making a statutory disciplinary complaint to either the Independent Liquor & Gaming Authority or the NSW Independent Casino Commission.

We will usually take disciplinary action in response to serious or repeat breaches of our legislation, or where there are concerns around the fitness of a licensee or operator to hold a position within the industry.

Administrative action

The legislation we administer includes the power to take certain administrative actions, such as imposing conditions on a licence or issuing binding statutory directions. These may include:

• improvement notices intended to:
  • function as remedial tools and support an improvement-focused approach to responding to issues under the Act
• enforceable undertakings intended to:
  • resolve a compliance issue in lieu of alternative enforcement action
  • prevent a risk of potential harm
• licence conditions designed to:
  • address a specific risk or issue, such as drink restrictions or noise mitigation strategies.
  • uplift a business’ processes or procedures, such as requiring the use of CCTV, implementation of a plan of management, or imposing crime scene preservation requirements.
  • provide a level of regulatory certainty by securing ongoing compliance with certain requirements or harm minimisation measures.
• directions intended to:
  • address an immediate risk, including by placing restrictions on events or the way in which a venue is being operated.
  • ensure the implementation of certain processes or measures in the casino sector.

We will usually apply administrative remedies when we need to take decisive action to address an ongoing concern or immediate risk.

Demerit point system

Licensees, managers, and clubs incur demerit points for committing demerit offences or through a prescribed complaint made by L&GNSW or NSW Police to the Independent Liquor & Gaming Authority.

These demerit points apply to serious breaches of liquor legislation and can result in sanctions ranging from additional loadings attached to a venue’s annual liquor license fee through to reprimands and disqualifications of licensees, managers and club secretaries or the suspension of liquor licences for up to 14 days.

For further information, visit our demerit point system page which include a list of demerit offences.

We may take administrative action alone or in combination with any criminal action we take, depending on the facts and circumstances of a particular case. Some criminal action we take, such as issuing penalty notices for certain offences, may automatically trigger the demerit point system.

Governance arrangements

Our compliance and enforcement activities are undertaken within a strict governance framework to ensure efficient and effective allocation of resources and adherence to our guiding principles of proportionality and consistency.

Decisions around whether and how to deal with a report of non-compliance or incident and the instigation of formal investigations and enforcement proceedings are handled by two discrete internal governance panels.

Report Assessment Panel

The Report Assessment Panel (RAP) considers all reports of non-compliance that are accepted and not dealt with at the point of contact.

The primary role of the RAP is to ensure a consistent and appropriate approach to the:

• triaging and allocation of incidents and reports of non-compliance.
• handling of reports of non-compliance.
• identification of trends and emerging risks.
• regulatory response to allegations of non-compliance.

Enforcement & Prosecution Panel

Where an investigation establishes evidence of non-compliance, enforcement options must be weighed up based on the facts and circumstances of the offending.

Where a penalty notice, prosecution or administrative action is recommended, a report is submitted to the Enforcement & Prosecutions Panel (EPP). The EPP assesses the matter and determines the appropriate action in the context of our objectives. This also includes consideration of this policy, our regulatory priorities and delivery plan, the Attorney General’s guidelines as they relate to penalty notices and cautions, and the public interest. The EPP also provides oversight of investigations and prosecutions as they progress, which includes strategic decision-making on the approach to investigating and prosecuting certain matters.

A key role of the panel is to provide a level of oversight of and consistency in enforcement decision making.

We may take administrative action alone or in combination with any criminal action we take, depending on the facts and circumstances of a particular case. Some criminal action we take, such as issuing penalty notices for certain offences, may automatically trigger the demerit point system.

Information sharing

To ensure the community and industry we regulate understand our expectations, we regularly inform or report on the way we regulate, our operations and the decisions we make.

It is also important that we establish frameworks to both receive and share information and intelligence from and with law enforcement bodies, other government agencies and regulated entities where appropriate. We do this through several channels.

Delivery plan

We publish a delivery plan that sets out our focus areas for a three-year period, or longer. This plan sets out the harms or risks we have identified as priorities in each of our industry sectors, and what action we propose to undertake in response.

The identification of risks and harms is informed by an assessment of existing or emerging issues based on data, intelligence, and research. Learn more about our delivery plan.

We report on the outcomes of the delivery plan at the conclusion of the plan.

Regulatory priorities

Our compliance and enforcement regulatory priorities govern where we will target our compliance and enforcement policies on a half yearly basis. While these priorities are set within the context of our delivery plan, they provide more detail about the specific issues we will be targeting and the timeframe in which our campaigns will occur.

Our regulatory priorities are communicated to industry proactively.

Industry and stakeholder engagement

Industry alerts

We aim to engage proactively with industry participants and ensure that we are as transparent as possible with our planned activities, any emerging risks or issues identified, and any proposed change to our standard approach to matters.

In addition to the publication of our delivery plan and regulatory priorities, we may, from time-to-time, issue industry alerts to licensees and operators, describing a particular issue, our proposed response, and any action we may recommend industry take.

Stakeholder engagement

We maintain regular engagement with NSW Police, community and industry bodies, NSW Health, the Office of Responsible Gambling, local councils, and other government agencies to facilitate ongoing collaboration, to gain insight into issues impacting the local community and industry and to discuss our regulatory priorities. Our regular engagement is complimented by more formal forums and working groups held with key industry and community stakeholders.

Engagement frameworks and intelligence sharing

In situations where we are dealing with a range of stakeholders or co-regulatory agencies, or where we are addressing significant or persistent risks, we will create an engagement framework that includes all relevant agencies and regulated entities, where appropriate.

These frameworks are designed to facilitate the free flow of information and intelligence between regulators, law enforcement bodies and regulated entities to ensure that all risks are understood, considered, and managed by the appropriate stakeholder.

Publication of enforcement outcomes

To promote transparency and accountability, deter future or broader non-compliance, and instill public trust and confidence in our status as an effective regulator, we publish the outcomes of our enforcement actions. This may include:

• media releases, in line with any applicable media policy
• the publication of outcomes in a register on our website
• the publication of reports or decisions on our website.
• The publication or dissemination of information relating to our activities, investigations or enforcement actions may identify venues or individuals, where it is appropriate to do so.

For more information on when we might make a public comment, please refer to our Public Comment Policy

More information