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- 16 March 2004
Public Lotteries Legislation Amendment Bill
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Page: 7264
Second Reading
The Hon. IAN MACDONALD (Minister for Agriculture and Fisheries) [8.33 p.m.]: I move:
That this bill be now read a second time.
I seek leave to have the second reading speech incorporated in Hansard.
Leave granted.
This Bill provides for amendments arising from reviews of the Public Lotteries Act 1996 and the New South Wales Lotteries Corporatisation Act 1996. These reviews were conducted during the course of 2002-2003 and identified a need for refinement of both Acts. The proposed amendments were developed in consultation with all key stakeholders, following the release of an issues paper during the review process.
The Public Lotteries Act is the principal legislation regulating the operation of public lotteries in New South Wales. The objectives of the Act are:
• To make provision for the proper conduct of public lotteries in the public interest;
• To minimise any harm associated with public lotteries; and
• To ensure that revenue derived from the conduct of public lotteries is accounted for in a proper manner.
The New South Wales Lotteries Corporatisation Act:
• Established the New South Wales Lotteries Corporation as a statutory, state-owned corporation;
• sets out the objectives and functions of the Corporation; and
• Transferred the assets, rights and liabilities of the pre-existing statutory body, New South Wales Lotteries.
I will briefly address the subject matter of the proposed amendments to each Act separately.
In regard to the Public Lotteries Act 1996, the Bill seeks to make several clarifications and create some new offences.
The most important new offences will prohibit the unauthorised sale and promotion of public lottery products, such as the range of products available for purchase from newsagencies, and the purchase of these lottery products on behalf of others for a fee or reward.
Experience has shown that unauthorised sellers of the reputable range of NSW Lotteries' products target potential overseas subscribers by means of a direct mailing campaign, or via the Internet.
The main problem with these operators is that their offers can be ambiguous, and even misleading. The offer can suggest that a player has a very high, almost guaranteed chance of winning millions of dollars. There are also cases where these intermediaries have failed to pass on prizes won by players. This has resulted in many dissatisfied customers. The Government receives complaints from these customers every year.
This situation is endangering both the commercial reputation of the New South Wales Lotteries Corporation as the lottery operator, and New South Wales' general reputation as a jurisdiction that can ensure public lotteries and other gaming activities are conducted with integrity.
At present, there is no explicit offence in the Act, or any other gaming-related legislation for that matter, which prohibits an unauthorised involvement in the sale of public lottery products. As such, this particular form of facilitating gambling activity is completely unregulated. The implementation of this proposal will rectify this troubling situation. Three new offences will be created. They are:
• Unauthorised selling of entries in or subscriptions to a public lottery;
• Unauthorised promotion or marketing of a public lottery; and
• Person not to enter or subscribe to a public lottery on behalf of another for a fee or reward.
Another new offence will address fraudulent claims being made for lottery prizes. The investigation of fraudulent claims costs lottery operators both time and money, and there is no existing deterrent to the making of fraudulent claims.
The introduction of this offence and the attached penalty will provide a deterrent and help maintain public confidence in the integrity of public lotteries. The offence will be limited, in that it will apply to a person who lodges a claim knowing it to be materially false or misleading.
The review also brought to light several areas in which greater clarity was required in the legislation. In parts, the Act, as currently worded, is not sufficiently clear on a small number of basic operational matters.
Accordingly, the amendments will make it clear that:
• Lottery licensees may enter into agreements to participate in national games;
• Lottery licensees are permitted to contribute to prize payments for national lottery games;
• Separate prize funds are required for each public lottery licence; and
• Lottery agents are allowed to pay minor prizes directly to lottery subscribers.
Also, the Bill will extend the same right to public lottery licensees to organise and run syndicates that is currently granted to their agents.
The Bill will also extend the jurisdiction of the Administrative Decisions Tribunal. A person will be able to apply to the Tribunal for a review of ministerial decisions to withdraw the approval or appointment of an agent of a public lottery licensee.
The Bill will amend the notification requirements for a change in the circumstances of a lottery licensee.
Recently it became apparent that a lottery licensee may be placed in the position of unintentionally breaching certain notification requirements. This is more likely to occur where a licensee does not have total control over the changing information, and must await the advice of other parties.
The Bill will address this by changing the notification requirements, so that a licensee or agent is required to notify the Minister of changed circumstances, but only within 14 days of becoming aware of the change in circumstances.
It is important to understand that this will only apply to cases where a licensee or agent does not have direct control over the change in status. Where there is full knowledge of the changed information, the licensee or agent must notify the Minister in writing in 14 days after the change occurs.
I now turn to an aspect of the Bill which has generated some media attention, namely the proposed introduction of enhanced regulation-making powers within the Act to provide for the introduction of a statutory time limit on unclaimed prizes.
Under current circumstances, the liability for unclaimed prizes is open ended. It is estimated that, for New South Wales Lotteries alone, the exposure currently amounts to at least $115 million.
Furthermore, as the vast majority of unclaimed prizes are of minor value, and as few claims are received relating to lotteries drawn more than 3 years ago, the cost of maintaining open-ended verification systems for such prizes is difficult to justify.
It is acknowledged that the introduction of a limit of claims for lottery prizes is relevant to the Legislation Review Committee's scrutiny of Bills, as it delegates the power to introduce time limits to a regulation.
It is important to understand that there is no intention to arbitrarily remove the current unlimited right of public lottery subscribers to lodge their claim for winnings. It is proposed that the limit on the time for lodging prize claims will be introduced gradually, and will not be fully in place for up to 15 years from the date of commencement of the relevant regulation.
Hence, there will be more than adequate time for lottery subscribers to check if they have an old, potentially prize-wining lottery ticket lying around gathering dust at the bottom of a suitcase or in the back of the sock drawer, before the new limits are fully implemented.
So it is clear that the introduction of this limit will significantly reduce the exposure of licensees to the unclaimed prize liability, without abruptly depriving lottery subscribers of an accustomed right.
Finally, the Bill will introduce a number of minor miscellaneous, ancillary and consequential amendments to the Public Lotteries Act. These amendments will enhance certain definitions in the Act, and ensure that other definitions are consistent throughout the Act.
I now turn to amendments to the New South Wales Lotteries Corporatisation Act.
The amendments proposed to this Act are non-contentious and straightforward.
In summary, at the point in time when the New South Wales Lotteries Corporation was being established, which was in 1997, the assets, rights and liabilities of the former New South Wales Lotteries were transferred to the Corporation.
This process was specifically catered for in certain provisions in the Act. The transfer of these assets, rights and liabilities has long been completed, and these relevant provisions are now obsolete. It is appropriate that they be removed from the Act.
Conclusion
In conclusion, this Bill will make further improvements to the regulatory framework for the operation of public lotteries in New South Wales. I commend the Bill to the house.
The Hon. MELINDA PAVEY [8.34 p.m.]: I speak on behalf of the Liberal-Nationals Coalition on the Public Lotteries Legislation Amendment Bill, and at the outset I indicate that the Opposition will not oppose it. The Public Lotteries Act 1996 provides six licences held by NSW Lotteries to conduct Powerball, Instant Scratchies, Lucky Lotteries, Lotto, Lotto Strike and soccer football pools. Another licence is held by Jupiters and Club Keno to conduct keno in registered clubs and the Sydney casino. The New South Wales Lotteries Corporatisation Act 1996 provided for the New South Wales Lotteries Corporation. While conducting the statutory five-year review, the Government took the opportunity to examine its compliance with national competition policy principles.
The objects of the bill address issues that were raised by the statutory five-year reviews of the Public Lotteries Act and the New South Wales Lotteries Corporatisation Act 1996 that were conducted in 2002 and 2003 respectively. The reviews concluded a need to refine and clarify certain aspects of these Acts, and this bill addresses those conclusions. The proposed amendments will make clear a number of administrative matters which will result in financial savings to the New South Wales Lotteries Corporation. The bill creates new offences prohibiting the unauthorised sale and promotion of public lotteries products, entering or subscribing to public lotteries for or on behalf of another person for a fee or reward, and lodging a false claim for prizes in public lotteries. Each offence carries a maximum penalty of 100 units, which currently equates to $11,000.
The bill inserts new section 39A, which will enable agents to pay directly to the winners prizes not exceeding the amount prescribed by the regulation. New section 25A will confirm that the licensee must keep a separate prize fund for each game. The bill clarifies the situations in which it will be acceptable for a licensee to enter into agreements with interstate authorities to operate national lottery games. It also extends the jurisdiction of the Administrative Decisions Tribunal to examine decisions to withdraw approval or appointment of an agent of a public lottery licensee. The bill also amends the notification period for a change in circumstances of a lottery licensee. The licensee will be required to notify the Minister of a change in circumstances no later than 14 days after the licensee has become aware of the changes. This will occur only in cases when the licensee is not directly in control of the changes in circumstances.
The bill allows licensees to centrally organise and run syndicates with subscribers through agents' online terminals. It also amends regulations to impose a statutory time limit on unclaimed prizes, which is probably one of the more interesting aspects of the bill as it applies to occasional punters. The rationale behind the imposition of a statutory time limit stems from the financial strain of keeping the time limit open ended. At present unclaimed prizes amount to approximately $115 million, which is constituted by a huge number of small prizes. Such an extraordinary amount of money could probably build 10 public schools, but it represents many small prizes. There could be an issue relating to whether there is any public benefit to introducing a time constraint on the collection of winnings. It appears that streamlining procedures will save money and provide many administrative benefits.
The Legislation Review Committee examined the bill and pointed out that it will commence at the date of proclamation. The committee understands from the department that the operation of the bill is intended to commence close to the time of its assent. The committee noted that amendment of section 27 (9) will enable regulations to prescribe the time within which claims for unclaimed prizes must be made. The extension of the definition of an unclaimed prize will mean a prize that remains unclaimed by the prize winner for a period of one year after the date on which the public lottery to which the prize relates was conducted.
Allowing regulations to stipulate the time within which claims for an unclaimed prize can be made is a substantial delegation of legislative power as it has the potential to deprive prize winners of sizeable amounts of money. The Legislation Review Committee noted that any regulation could only affect prizes unclaimed for at least one year from the date the lottery was drawn.
The Minister's intention is to introduce claims time limits gradually over 15 years. The Minister's office has not included time limits in the bill but in future a regulation will allow for consultation with stakeholders. The committee understands that it is expected that eventually the time limit will be five years. The committee also considers that flexibility in statutory time limits is not desirable. Therefore, it is preferable to set such time limits as prescribed in the Act rather than by regulation. However, the committee considers that allowing time limits for unclaimed prizes is an appropriate delegation of legislative power, rather than regulation. I am guilty of having a lot of unchecked tickets in a drawer; I do not know if I have a winner.
The Hon. Christine Robertson: Give them to me, I will check them.
The Hon. MELINDA PAVEY: I might bring in those unchecked lottery tickets. The time limit is probably the major issue of public interest in the bill. It is a sensible tidy up for people such as me who put a ticket into a drawer. It has given me the incentive to go to the drawer and find out if I have a winning ticket. If I am a winner, I will tell the Hon. Christine Robertson. The Opposition will not oppose the bill.
Ms LEE RHIANNON [8.40 p.m.]: The Greens do not oppose the bill. We understand that there have been some concerns about setting statutory limits for the collection of prizes, which eventually will be five years. We trust that the Minister's claim to have had extensive consultation on that issue is correct; particularly as there is $115 million in unclaimed prizes. We hope that there will be a community information campaign to ensure that as much of that money as possible finds its way to the missing winners. Hopefully the Government will not see it as a quick windfall.
The Hon. Dr ARTHUR CHESTERFIELD-EVANS [8.41 p.m.]: Two Acts govern the conduct of lotteries in New South Wales: the Public Lotteries Act 1996 and the New South Wales Lotteries Corporatisation Act 1996. A review of those Acts took place in 2002 and a report was delivered. The review identified certain problems with clarity and enforcement of the spirit of the Acts, and this bill is an attempt to rectify those shortcomings. The main amendment is to prohibit unauthorised on-sellers of lottery tickets. Apparently there are people who sell New South Wales lottery tickets to overseas subscribers with the promise that they will win a prize. Of course, that is false and misleading, given the odds. It is also reported that unauthorised sellers do not pass on the prizes if the tickets do win.
The Government said that there is no enforcement procedure to stop those unauthorised sellers, and this bill will rectify that anomaly. Proposed section 37A facilitates licensing agreements for public lotteries between jurisdictions. That means that a person who purchases a Victorian Scratchie may now claim the prize money from a lottery agent in New South Wales; currently that is not the case. It is interesting that the Minister said one of the objects of this bill is to minimise any harm associated with public lotteries. I cannot quite see why that is included in the text of the bill. My view is that the best way to reduce harm is to reduce the opportunity for gambling. We should run serious campaigns to lessen gambling as it is, effectively, an opportunity to lose hard-earned capital in the short term. That means that the ageing population, a future demographic problem for Australia, is spending its money on something with a low probability of winning, instead of investing wisely for their future.
Any bill associated with gambling which does not address that fundamental issue neglects the most important aspect of gambling. There is no point advising people to invest in their future while at the same time running a huge advertising campaign promoting the idea of buying a lottery ticket to win enough money to solve all their problems. Of course, a lottery ticket has a low possibility of success. The bill has a narrow framework for dealing with gambling, and the Government's broader framework for reducing gambling is a failure. However, as nothing better is on offer, I support the bill.
Reverend the Hon. Dr GORDON MOYES [8.45 p.m.]: The Christian Democratic Party supports the Public Lotteries Legislation Amendment Bill and congratulates the Minister for Gaming and Racing, Mr Grant McBride, on introducing it. Over recent years we have all been subject to a lot of emails informing us that we have won vast amounts of money in overseas lotteries. If I were to collect all the millions of dollars that I have supposedly won in German and Spanish lotteries I would be almost as wealthy as if I had collected all the money promised to me from Nigeria, left to me by people who had died. Obviously there are all sorts of scams, and Minister McBride has closed an important loophole by introducing this bill. We support him in that.
Obviously the Christian Democratic Party does not want to extend facilities for further gambling in the light of the tremendous social consequences of gambling on individuals and families. However, we recognise that those loopholes are being closed and that will create new offences to prohibit the unauthorised sale of public lottery products. It will stop people who are engaged in scams from developing the ability to collect unclaimed prize-winning tickets. In the 1930s people at racecourses, known as emus, picked up all the discarded and unwanted tickets in the hope that they might have some luck and find one winning ticket. At present there is no specific offence in the Act, or in any gaming-related legislation, which prohibits unauthorised involvement in the sale of public lottery products.
We are aware that whenever these opportunities are raised some people will make the most of what is a loophole. Some media attention has focused on the enhanced regulation-making powers within the Act to provide for the introduction of a statutory time limit; this is for the sake of persons who put their unclaimed tickets in the bottom drawer. My habit throughout my life has always been to give money to people who want to sell lottery tickets, but never to take the ticket. I do not believe we should gamble just for the sake of personal gain. I am happy to support a cause with a donation and I recognise that the donation is unreceipted, but that is better than leaving a ticket at home in the bottom drawer. I encourage people to give, to donate, money to good causes rather than have a personal interest in winning a prize. You always feel better if you are not in it for what you get out of it. It is proposed that the limit will put a cap on the time in which prizes might be claimed, and we do not have a problem with that. On the whole, the Christian Democratic Party supports the bill and congratulates the Minister on closing the loopholes.
The Hon. IAN MACDONALD (Minister for Agriculture and Fisheries) [8.49 p.m.], in reply: I thank honourable members for their contributions to the debate.
Motion agreed to.
Bill read a second time and passed through remaining stages.
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