Seriousness without a yardstick: The NICC’s discipline problem in Australia?
NSW casino penalties have risen from a $1m AUD ceiling to $100m AUD. The process that produces them has not kept pace - and the latest Star fine shows the strain, regulatory expert Paul Newson writes.
On 1 June 2026 the New South Wales Independent Casino Commission fined The Star Sydney $10 million and ordered it to set aside a further $5 million to strengthen the technology behind its financial crime controls. The penalised conduct was serious. Patrons had gambled without the required breaks, in the worst cases for more than 36 hours at a stretch. An excluded person had entered the casino on nine occasions. And the Commission found systemic failures in the casino’s financial crime risk operations, including failures to assess whether customers carried money laundering or terrorism financing risk, that continued as late as September 2025. The regulator’s public response was notably warm: it called the breaches disappointing but stressed the casino’s progress under new ownership, voiced optimism, and set the fine to be paid by instalments to mid-2027.
There is nothing objectionable in any of that. Acknowledging genuine progress, and that much of this conduct predated the current ownership and remediation, is reasonable, as is recognising an operator under real financial strain. The difficulty lies not in the tone of the response but in what sits beneath it.
Over four years the Commission has moved from suspending the casino’s licence in 2022, after the first Bell inquiry found it unsuitable, to the second Bell inquiry it convened and scoped in 2024, which led to a $15 million penalty, to this latest fine in 2026. Both inquiries produced detailed public reports. The penalties did not: each was set out in a brief notice, with no reasoned decision of the kind that would let anyone judge whether the sanction was proportionate. That gap, not the size of any single penalty, is the problem.
From trivial to stratospheric
The severity is more recent than it looks. Until the 2022 reforms, the maximum pecuniary penalty a NSW casino regulator could impose for disciplinary action was $1 million, and in practice penalties of any size were rarely issued. The Casino Legislation Amendment Act 2022 lifted that ceiling a hundredfold, to $100 million. The change came after royal commissions in Victoria and Western Australia found regulators that had presided over years of misconduct without detecting it or acting on it. The headline penalties followed: $100 million against The Star in 2022, and more than $250 million against Crown Melbourne, imposed by the Victorian regulator across a series of disciplinary actions.
NSW never had a royal commission. Its reckoning came through inquiries under section 143 of the Casino Control Act, useful but narrower instruments that the regulator itself initiated and framed.
Scale without a yardstick
The problem is not the size of the penalties but the absence of any framework against which size can be judged. The casino statutes permit penalties of up to $100 million with no legislated criteria, no duty to give reasons, and, for the gravest sanctions, no right of merits review. The 2026 fine was apportioned across categories of breach, but with no published account of how the amounts were reached, what view was taken of culpability, or how the operator’s financial position and the occurrence of the conduct under supervision were weighed. Those are the questions a reasoned decision answers.
Active regulators elsewhere answer them as a matter of course. The UK Gambling Commission is among the most energetic enforcers in the world, concluding dozens of cases and recovering tens of millions of pounds in a single recent period. Every one of its penalties is published with detailed reasons, set against a stated penalties framework, in a competitive market of hundreds of licensees where a deterrent signal has an audience. Australia’s casino penalties have run to $100 million and beyond, well past anything the UK regulator has imposed, yet issue from a process with none of those features.
The deterrence rationale for penalties at this scale is also worth examining directly. Arie Freiberg, whose scholarship on administrative sanctions and casino regulation has examined the NSW regime closely, has described general deterrence in a market of two operators as a chimera: empirically unsupported and aimed at an audience that barely exists. He has also noted that none of the major inquiries into casino misconduct found that low penalties caused the failures they documented. The underlying failures were of enforcement, oversight and regulatory culture. The move to a $100 million ceiling addressed public demand for seriousness; whether it addressed the conditions that allowed the misconduct is a different question.
The sharpest contrast is with AUSTRAC. The Commonwealth financial crime regulator pursued the casinos through the Federal Court, which imposed a $450 million penalty on Crown for systemic breaches of financial crime law, a matter wholly separate from the disciplinary regime for casino licences. That penalty was the product of a court: evidence, published reasons, and a right of appeal. The NICC increasingly leans on the same language of financial crime and criminal infiltration to convey its seriousness, yet its own penalties are administrative, imposed by the regulator, with no criteria, reasons or review. A regulator that reaches for penalties on a court’s scale without a court’s process is building a house of cards.
A new name for an old regulator
The shape of this matters because of what the Commission is. The failure it was built to answer was not a lack of independence: its predecessor, the Independent Liquor and Gaming Authority (ILGA), had statutory independence that was never in question. It was a failure of capability and focus, and one the government brought on itself. The government had by 2016 reduced ILGA to a board with a limited remit and built a dedicated operational regulator, Liquor and Gaming NSW (L&GNSW), to take over casino oversight and carry most of the regulatory work under delegation. L&GNSW was also responsible for policy and oversight across the wider gambling sector, including pubs and clubs. In 2019, in a broader rationalisation of government, and underestimating the complexity of gambling regulation, the responsible minister folded L&GNSW into the generalist Department of Customer Service. Its expertise and leadership drained away; the sidelined ILGA was left to reassert itself by default; and the regulator that had warned about inadequate casino oversight was wound back as a pyrrhic savings and efficiency measure.
The scandal that produced the Commission did not surface through the regulator’s own vigilance. The Star’s failures, like Crown’s before them, were brought to light by the press: a joint investigation by The Sydney Morning Herald, The Age and the Nine Network’s 60 Minutes, published in October 2021 and led by the reporter Nick McKenzie, alleged that the Sydney casino had for years enabled suspected money laundering, organised crime and fraud. The Bergin inquiry, whose terms of reference were confined to Crown’s suitability for the unopened Barangaroo casino, had no mandate to examine the misconduct at the one casino then trading in the state. When that reckoning finally came, the government’s answer was a dedicated casino commission. Yet it was assembled largely from ILGA: its inaugural Chief Commissioner had chaired ILGA from 2016 to 2022, and four of the founding commissioners came across from its board. In its institutional character, and without the structural reforms that would have made it genuinely new, the Commission reprised rather than replaced what came before.
The contrast with the other states sharpens the point. NSW alone among the jurisdictions touched by these scandals held no royal commission, so the failure of its own regulator never faced the reckoning that fell on Victoria and Western Australia, where the regulators that had failed were swept aside.
A regulator criticised for missing wrongdoing has a powerful incentive to demonstrate, through visible toughness, that it has changed. The second Bell inquiry drew that charge directly. Writing in The Australian, Eric Johnston argued that its scale and cost dwarfed what it produced, which on the account of counsel assisting amounted to an internal dispute and a few control breaches the casino had itself detected, not the money laundering and organised crime exposed by the first inquiry. Bell’s final report reached sterner conclusions, and the regulator said its concerns had been validated. So there are two accounts of the same inquiry: a costly overreaction that found little, or a vindicated intervention that exposed real failures. From the outside they cannot be told apart, because the regulator published no reasons showing what the inquiry established or why the penalty fitted it. The public is asked to take on trust that the toughness was warranted, which is the one thing a regulator under a cloud cannot assume it will be granted.
The supervision no one can assess
The hardest question concerns the special manager. One was appointed to oversee The Star in October 2022, with a mandate, in the regulator’s own words, to drive a “robust root cause analysis” and a review of the casino’s culture, precisely the supervised remediation that is meant to outperform a fine. The appointment has been extended repeatedly, once described as the final extension, and now runs to 30 September 2026, nearly four years. The cost has been reported at $75,000 a month for Sydney alone, a figure first disclosed by the Australian Financial Review in March 2024, with further fees for the Queensland casinos, at times exceeding the pay of the chief executive being supervised.
The casino nonetheless remains suspended and unsuitable in NSW; it declined even to seek a suitability determination in 2026. The failures penalised in June 2026, including financial crime risk breaches running to September 2025, fell within the supervision period. The Commission’s own account records that many breaches were detected through the casino’s remediation program or reported by the casino, not surfaced by the oversight. The regulator has gone further, conceding that it could not always tell how much of the remediation was attributable to the manager’s oversight rather than to the casino’s own reform agenda. That is a striking admission about a regime approaching its fourth year.
Victoria offers the contrast. A special manager there oversaw Crown Melbourne’s remediation, and in March 2024 the Victorian regulator, applying published criteria and publishing detailed reasons, found the operator suitable. Crown has recovered all three of its licences. Under the NSW regime, The Star has recovered none.
This is not proof that one manager succeeded where another failed. The circumstances differed: The Star faced acute financial distress, an ownership vacuum filled only late in 2025, and a relationship with the regulator that broke down in part through its own conduct. The difference that matters is that the Victorian outcome can be tested against published criteria and reasons, while in NSW the manager’s reports have gone to the regulator and the government, leaving the public with brief statements rather than a reasoned account of what nearly four years of oversight has achieved.
The case for a yardstick
The failure here is not severity or leniency. It is the absence of an anchor. The Commission has imposed very different penalties, convened and framed its own inquiries, and run a supervision of nearly four years, without ever setting out, in public, the reasoning that would let anyone judge whether any of it was proportionate or effective.
There is also a cost here that the disciplinary notices never register. An integrated resort is a large employer and the anchor of a web of suppliers, contractors and associated businesses, and prolonged doubt about its licence reaches all of them. The jurisdictions usually held up as models treat that economic weight as something to be understood and managed rather than wished away. Nevada, whose gaming regulators are studied around the world and whose law declares the industry vital to the state economy, couples rigorous licensing and enforcement with a settled grasp of the value it supervises. Singapore built its integrated resorts as a deliberate instrument of tourism and economic policy, then bound them with some of the strictest social safeguards anywhere, administered by a capable and properly resourced authority. NSW never developed that capability, which is part of why its casinos drifted for so long, and the danger now is the mirror image of the old failure: an operator managed less for the public interest than for the rehabilitation of the regulator’s own standing.
The remedies are orthodox. Arie Freiberg, in his analysis of administrative sanctions and casino regulation in this jurisdiction, has argued that proportionality is the governing principle any credible regime must satisfy, and has identified sanctioning criteria set out in legislation, a duty to give reasons, and a right of review as the conditions that make proportionality demonstrable rather than merely asserted. The Commission has operated without all three. The conduct of Australia’s casino operators was indefensible, which is why the response to it must be defensible: transparent, consistent, and testable. The public discontent that followed the casino revelations, and the political retreat it forced, handed the new commission an unusually free hand to act without those disciplines. Penalising an operator for failures that persisted under the regulator’s own supervision, while commending its progress and explaining neither, does nothing to build the credibility the commission was created to restore. The commission did not uncover the misconduct that called it into being; that fell to the journalists whose October 2021 reporting prompted the first inquiry, while the regulator and the Bergin inquiry that preceded it were looking elsewhere. Its standing rests entirely on how it now discharges the task it was given, and a body that escalates, then relents, and accounts for neither cannot keep drawing on a credit it never earned.
