A damning report reveals that a slot machine venue owned by one of Australia’s most prominent club bosses disguised substantial cash advances and alcohol as purchases to encourage gamblers to spend more.

Steelers, a District Rugby League Club in New South Wales, has been fined $130,000 for actions traced back to senior members of staff. The penalty is the largest fine to be levied on a registered club since the NSW Independent Liquor and Gaming Authority has been in operation.

Former club secretary given a lifetime ban

Scott Miles, the club’s secretary and general manager, was responsible for directing staff members to commit the offenses. He has been banned for life from filling any office-holder role in the future.

Miles instructed staff members to carry out the offenses to “make sure people are coming in the doors.” The conduct of the senior team, including Miles, was found by the authority to be in serious breach of rules that intended to limit the potential harm caused by gambling.

The authority said of the practices that “there are financial benefits and consumer harms posed by unlawfully incentivizing gamblers and obscuring credit transactions.”

Miles had already been sentenced to up to four years in prison for defrauding the club of over $1 million during a seven-year period to fund his gambling addiction. Peter Newell, the chair of the?District Rugby League Club, said the club had had a “tumultuous year.”

No evidence against the board of directors

The Authority also concluded that there was no evidence implicating the board of directors in the affair. Newell, who is also the chairman of Clubs NSW and president of Clubs Australia, made it understood that they were not aware of the practices.

The authority’s report said: “While the unlawful conduct was instigated by Mr. Miles, it occurred over a substantial period of time and involved large sums of money. It included the cooperation of managerial staff, several of whom clearly knew these practices to be wrong but acquiesced.”

Staff described how they would run through falsified EFTPOS transactions disguised as sales for amounts of up to $40,000 to allow clients to pump more cash through the club’s gambling machines. James Summerrell, who was a doorman at the club, told inspectors “it started a long, long time ago with some of our Asian clientele” because they “[couldn’t] afford to lose this kind of patron, we need to keep doing what we’re doing.”

The same pattern of behavior was described when it came to offering players free drinks to encourage them to gamble. The authority said they “[are] satisfied that these staff members knew that free liquor was being offered and supplied to gaming room patrons as an inducement to prefer this venue and as an inducement to stay longer on the premises playing gaming machines, in order to generate more gaming machine revenue for the club.”

One problem gambler who was a frequent client at the venue said the staff would offer beverages and food to players and take it to them at the machine so they wouldn’t miss out on any playing time.

Calls for Newell to resign

The spokesperson for the Alliance for Gambling Reform, Stephen Mayne, called for Newell to resign, saying the chairman had been “asleep at the wheel.” He went on to say: “This is a staggering report. These are extraordinarily bad practices that were going on for many, many years at the Wollongong club where the chairman also happened to be the long-term chairman of both Clubs NSW and Clubs Australia – the powerful lobby groups representing pokies clubs across the country. Governance and the oversight and the stewardship was completely absent.”

Meanwhile, New South Wales Racing Minister Paul Toole said the government should adopt a “zero tolerance for club officials who commit serious offenses. People who run clubs must act with the highest integrity and put the interests of their members first.”

As it stands, there has been no comment from Newell or the club’s current management.