A Transformative Evolution: Tracing the Reinvention of a Critical Regulator

Culture is a theme which comes up time and again when Catherine Myers reflects upon the establishment and growth of the Victorian Commission for Gambling and Liquor Regulation (VCGLR).

The VCGLR is responsible for ensuring the integrity of Victoria's gambling and liquor industries. Working closely with stakeholders and licensees to achieve high levels of compliance, the VCGLR sets clear expectations, encourages the right behaviour, and takes strong enforcement action where required.

Myers, the VCGLR’s Chief Executive Officer, says the Victorian Government’s decision in 2012 to bring together its liquor and gambling regulators under one roof represented challenges on many different levels.

“Each regulator had their own way of doing things,” explains Myers. “They had their own systems and processes, and their own cultures. What we tried to do was to build a cohesive and supportive culture working towards the same goals.”

What the VCGLR and its more than 200 staff discovered from the get-go was that it takes a lot of hard work and commitment to achieve cultural change.

One of the first steps was to settle on four organisational values for staff to live and breathe. Crucially, these values – ‘work together’, ‘act with integrity’, ‘respect other people’, and ‘make it happen’ – were chosen by the staff themselves.

“Our people have always been committed to their regulatory craft,” says Myers. “But if our culture is not right, it’d be very hard to tell another organisation they do not have a good compliance culture.

“We introduced and built our culture from the ground up. It’s a culture firmly based on integrity and ethics. We wanted a reputation that was above or beyond reproach.”

Two-way conversations

Culture is not the only C-word that fuels the VCGLR machine: collaboration, consultation and conversations do, too.

Myers says she has long pushed for meaningful conversations within the organisation.

An example of this was at the start of 2018 when she wrote a letter to her directors, outlining her expectations of herself and of them as leaders of the VCGLR. In her letter, she encouraged them to be “clear on our performance expectations” and to “be brave and have the difficult conversations when performance is not meeting expectations”.

“We wanted expectations that cascade through the organisation and that are understood by everyone no matter what role you’re in,” she explains. “If you’ve got everyone on the same page and no ambiguity then you start to see ideas and feedback coming from staff. They might be insights into emerging trends or risks, or they could be process improvement ideas.”

Collaboration has occurred both internally and externally with a range of co-regulators.

To ensure the VCGLR is across new and complex gambling products, a working group was established with the Victorian Responsible Gambling Foundation (VRGF) and the Department of Justice and Community Safety. The group helps to inform complex gambling product assessments by providing operational expertise, gambling research and policy knowledge.

The Commission and its delegates consider this information when determining applications and conditions for new gambling products.

“Strong relationships are critical to the success of any modern regulator,” says Myers, “and we have used every opportunity to build stronger networks with our regulatory partners and stakeholders.”

These positive partnerships have produced significant results – as evidenced by the VCGLR’s relationship with the Emergency Services Telecommunications Authority (ESTA) and its Triple Zero service.

“Both parties have been sharing data with each other,” says an ESTA spokesperson. “Having liquor licensing data in our system has helped our emergency call taking and dispatch considerably in relation to the location verification of liquor licence premises.”

Victoria Police and its State Liquor Unit also continue to work closely with the VCGLR.

“The State Liquor Unit and the VCGLR are working collaboratively to develop joint enforcement strategies targeting licensed premises identified as causing high levels of alcohol-related harm,” says Senior Sergeant Dave Shepherd.

In Victoria the gambling and liquor industries are vibrant and diverse. Yet while these industries deliver substantial social and economic benefits to the community, they are also associated with a variety of potential harms.

The VCGLR oversees over 23,000 liquor licences, more than 620 Keno outlets, and almost 740 wagering and betting agents – while also managing the statewide cap of up to 30,000 electronic gaming machines across 500 gaming venues and the Melbourne Casino.

A new regulator

When the VCGLR was created in 2012, the independent liquor and gambling regulators had to be brought together under one roof.

Myers says there were high expectations about the benefits and efficiencies that would come from the new regulator.

“We worked very hard on achieving these efficiencies, but also had to ensure that we provided the appropriate and expected levels of supervision to both the liquor and gambling industries.”

The challenges in the early days were immense. “We had different systems for regulating liquor and gambling that did not speak to each other,” says Myers. “This meant staff were working across more than 40 different systems – and, in many cases, across two PCs – to be able to perform their duties.”

As well as facing the challenges of any new organisation, the VCGLR had to oversee the transition to a new venue-based model for gaming venues as well as facilitating and implementing a new Keno licence, wagering licence, lotteries licence, and a new monitoring licence.

Perhaps most significantly, the organisation also lacked a consistent approach to regulating these industries.

There were different ways of interpreting and considering risk throughout the organisation.

“Because of this, staff were not always confident that their decisions aligned with the views and expectations of the new Commission,” says Myers. At the VCGLR, the Commission sets the strategic direction and operational activities flow from this and from their statutory decisions. “In turn, there appeared to be a gap between the strategic direction of the organisation and what was happening day to day.”

To address this, Myers says the VCGLR had to develop a multi-faceted response.

First up was the development of a cohesive regulatory approach, which required 12 months of consultation, research and training of all staff.

“We had lunchtime sessions with staff and we also took the time to speak to academics about how we regulate, contemporary regulatory theory, and to get their feedback.”

There was also an organisational review to better align resources, the introduction of technology to become more efficient – for example automating low-risk applications – and a search for opportunities to partner with other organisations to use data better. 

This fundamental ‘reinvention’ of the VCGLR also enabled it to adopt a new focus on eliminating waste and improving efficiency.

“A good example is the deep dive we did in our licensing area,” says Myers, “which led to new operating models and a restructured division – and set the scene for what was to come.”