Liquor and Gaming NSW has concluded its investigation into EGM manufacturers accused of providing illegal incentives to club executives, turning its attention to the clubs, in what is the biggest investigation ever undertaken by the agency.
Prompted by a whistleblower, L&G looked into whether so-called ‘study tours’ to Las Vegas, specifically the 2022 G2E gaming conference, with the side trip to New York, were in fact educational in nature.
The sponsored trips, openly known as ‘junkets’, involved more than 50 venues from around NSW, who were given opportunity to see the different American games and venue systems.
Such trips have taken place for years, often including airfares and trade events but also frequently providing perks such as side trips, sports events and limousines. It is all reputedly to get clubs to buy a minimum number of new machines.
Some manufacturers have reportedly asked guests to sign that they were aware of their obligations and probity responsibilities under the gaming legislation.
Adherence to any waivers is unclear, but some companies have officially ceased offering the tours since the investigation began.
L&G alleges that offering such trips constitutes an illegal inducement, supported by the principle that the would-be ‘study’ tours were not legitimately educational.
The subsequent two-year investigation has attempted to sort through a myriad of documents, involving a large number of manufacturers and clubs. In budget estimates in August Tarek Barakat, Hospitality & Racing deputy secretary, described it as a “complex investigation” and explained it was not unusual for such matters “to take some time”.
This week a spokesperson for Liquor & Gaming NSW confirmed the regulator had completed its investigation into “six gaming machine manufacturers offering overseas trips to senior executives of registered clubs”.
“The investigation considered alleged breaches of Section 43A of the Registered Clubs Act, in that the tour did not have any education components or a genuine and specific course of study.”
In the coming weeks the findings and a disciplinary complaint will be submitted to the NSW Independent Liquor & Gaming Authority (ILGA) to determine any penalty. L&G declined to comment further on the matters yet to be ruled upon.
The subject companies are understood to be Ainsworth, Aristocrat, Aruze, IGT, Konami and Light & Wonder.
A negative ruling from ILGA could possibly have broader implications for the manufacturers. All are also dependent on maintaining a favourable stance with the powerful Nevada Gaming Commission, which requires that gaming machine manufacturers and distributors must be deemed suitable to hold a licence to operate in the US state.
While specifying that it is “not appropriate to make any further comment at this time” L&G did confirm it is also investigating certain clubs in relation to the allegations, and there may be additional disciplinary action.
Flaunting the well-established practise of junket revelry, a number of execs from the dozens of venues at the G2E conference were found to have posted pictures on social media of themselves enjoying perks provided and joking about the excesses, one declaring he was “off to educate myself in a few bars!”.
Manufacturers were contacted for clarity on the accusations, but all declined to comment and directed any enquiries to industry representative the Gaming Technologies Association (GTA).
Chief executive Jinesh Patel was unable to provide a response prior to publication.
