Alastair Shields: “The NTRC has made problem gambling a particular focus”

Alastair Shields, chair of the Northern Territory Racing Commission of Australia, granted Focus Gaming News an exclusive interview to talk about the biggest challenges for the NTRC and its regulatory approach and priorities.

Exclusive interview.- The Northern Territory Racing Commission of Australia (NTRC) is the body which is responsible for licensing and regulating, amongst other things, Northern Territory-licenced bookmakers.

Since it was established, the NTRC has built a reputation for responsibility, with a focus on transparency. 

To discuss the work the NTRC is carrying out, Focus Gaming News spoke with Alastair Shields, chair of the Northern Territory Racing Commission of Australia.

The Australian wagering and sports betting market remains highly competitive and the Covid period saw additional operators move online in some jurisdictions with rapid growth in betting turnover. Can you share any lessons and insights from the Covid period including any opportunities for innovation? Did it change how the NTRC regulates or shift its risk assessment of operators or the sector? 

In the Northern Territory, we were fortunate in that we did not have the same long periods of lockdowns and other restrictions that were experienced by the other jurisdictions. 

Most of our licensees were quite adept in adapting to the changed working conditions, noting that online businesses did not have the same challenges that traditional bricks and mortar businesses experienced.

Like most people, we quickly became used to having Commission meetings by video, and, even when the Commission could meet face to face, many of our visitors participated by video.  

The Commission cancelled two-planned bookmaker’s forums due to travel restrictions and granted countless exemptions to licensees to enable call centre operators and other staff to work from home, subject to conditions.

Given that: the Independent Audit Logs of all betting activity that licensees are required to keep can be interrogated remotely by Licensing NT experts; most investigations of complaints and disputes are conducted by telephone and email; and the majority of dispute hearings are conducted on the papers, the day-to-day activities of the Commission were largely unaffected.  

The Commission was, however, keen to ensure that when work-from-home approvals were granted, licensees ensured that the sharing of information and experiences that take place in a face-to-face work environment were not lost.

Most of the major online betting operators are licensed with the NTRC, which has an important industry supervision role. Can you share your view on the biggest challenges for the NTRC and what are the most serious risks the regulator is focused on regarding operators and the sector? 

The Commission strongly supports the National Consumer Protection Framework initiatives, has committed to implementing all of them, and on occasion has implemented stronger measures than those adopted nationally.  

A current challenge for the Commission is the proposed National Self-Exclusion Register, which will be known as BetStop. The Commission had hoped to be able to discontinue, or at least grandfather, our existing Self-Exclusion register, on the basis that an effective National system will be a more powerful tool to prevent harm for those persons who choose to exclude themselves from access to online gambling accounts.  

However, after reviewing the proposed system, and consulting with the industry, the Commission has reluctantly come to the decision that its register must be maintained alongside BetStop because the Commission is not satisfied that BetStop will be as effective as its current system.

AML shortcomings in the financial services sector received extensive attention and now regulatory and media focus has shifted towards the adequacy of AML arrangements in the gambling industry. What is the NTRC focused on in this space and how does it best work with AUSTRAC the AML/CTF regulator to help harden industry against AML risks? 

The Commission maintains a good working relationship with AUSTRAC, and Licensing NT officers regularly meet with officers from AUSTRAC to share information.  

As a regulatory body, the Commission considers that it should have a good dialogue and share information to the maximum extent possible with other regulators, noting that the same set of facts in a complaint or dispute may raise potential breaches with multiple regulators.  

The Commission has, on occasion, formally referred particular matters to AUSTRAC and other enforcement bodies.

“The Commission maintains a good working relationship with AUSTRAC, and Licensing NT officers regularly meet with officers from AUSTRAC to share information.”  

Alastair Shields, chair of the Northern Territory Racing Commission of Australia.

Responsible gambling remains a dominant framework within the sector and while there is some criticism about problem gambling prevalence surveys, they typically show problem gambling rates as static or no statistically significant movement. What more could policy makers or regulators be doing to prevent and minimise gambling harm and are there any innovative measures that you think are leading edge? 

Even if the rates of problem gamblers are relatively static, it is clear that community and government expectations about what operators and regulators should do to identify and prevent gambling harm have increased significantly.  

It is the job of the regulators to respond to those expectations and that is why the Commission has made problem gambling a particular focus.  

As part of our current review of the NT Code of Practice for Responsible Service of Online Gambling 2019, the Commission has looked at the measures adopted in other Australian jurisdictions and internationally to minimise gambling harm.  

Additionally, the opportunities provided by the use of Artificial Intelligence to predict gambling harm are very interesting and, although AI will not be able to replace common sense and good judgement, AI might be able to help operators identify customers who are likely to experience harm, and to assist preventing the harm at an earlier stage.

Peter Drucker famously said that “Culture eats strategy for breakfast” and we have seen serious concerns with organisational culture surfaced by Victorian and Perth Royal Commissions into the casino operators along with leadership, governance and compliance failures. Can you share your thoughts on the regulator’s role in assessing organisational culture and to what extent it might illuminate compliance risks? 

This is a very topical issue for the Commission, given we currently regulate a wide variety of operators, from long-term experienced large operators through to small start-up operations.  

The online gambling industry is very competitive, which can sometimes make it difficult for a single operator to move away from some of the more entrenched practices in the industry, such as advertising, the use of affiliates, and the provision of bonus bets.  

Some of these issues are already the subject of media and other attention, and it is likely that they will continue to be the focus of attention by regulators, not just the Commission, but at a national level as well.

The Commission has recently adopted a practice of requiring applicants for new licences to attend a Commission meeting so that the Commission can hear first-hand the applicant’s approach to issues such as identifying and responding to red flag behaviours, staff development, and how the applicant proposes to launch and develop their business if a licence is granted.  

This practice helps the Commission assess the culture of the applicant, and is useful in determining our approach to education, compliance and enforcement.

We are looking forward to the NTRC Chair speaking at Regulating the Game in 2023 and believe it’s a tremendous opportunity to hear about the NTRC’s regulatory approach and priorities, communicate its expectations as well as showcase key achievements and challenges. Can you share any thoughts about the importance of such forums for regulators and industry and regulatory policy and practice? 

I am very much looking forward to attending Regulating the Game too! The Commission publishes all of its dispute decisions, and some disciplinary decisions, online, in the hope that that helps explain the regulatory approach to licensees, stakeholders and the general public.  

“The Commission also often consults with industry and stakeholders prior to implementing significant policy changes.”  

Alastair Shields, chair of the Northern Territory Racing Commission of Australia.

However, nothing beats having the opportunity to discuss issues and priorities, particularly emerging ones, in an environment that stimulates thought and provokes comments and questions.  

I am also very much looking forward to what other regulators and industry participants have to say!

In August last year, the NTRC issued a consultation paper to discuss a possible regulatory framework concerning the acceptance of cryptocurrencies for the striking of and paying out of wagers by online gambling operations licensed in the NT. When is the Commission likely to finalise its position on this issue? 

The Commission received some good feedback from operators on the consultation paper – ranging from operators who wish to commence accepting bets in cryptocurrency immediately, through to operators who consider that no operators should be able to accept bets in cryptocurrency.

The Commission does not have a firm timetable to finalise our thinking on this issue and proposes to consult with the responsible Minister before we do.  

The Commission’s thinking is that this is an important issue, with potentially wide-ranging implications, and so we will not rush a final decision.

In the meantime, providing that all AML requirements are met, operators can always offer a service whereby customers can have cryptocurrency deposits converted into fiat to enable bets to be made as usual, and allow any resulting winnings to be converted back into cryptocurrency and returned to the customer.  

Some licensees already offer this, but until the Commission finalises its regulatory framework, it is not yet possible to strike bets and pay them out in cryptocurrency.