decision with reasons and notice of disciplinary action on ...€¦ · doc20/001704 – final...

Independent Liquor and Gaming Authority Secretariat: Level 6, 323 Castlereagh Street Sydney NSW 2000 [t] +61 2 9995 0615 [e] [email protected]

www.liquorandgaming.nsw.gov.au ABN 42 496 653 361

Our ref: DOC20/001704

Mr Sean Goodchild Director Compliance Operations Liquor, Gaming and Racing (formerly known as Liquor & Gaming NSW) Level 6, 323 Castlereagh Street HAYMARKET NSW 2000 [email protected]

Mr Justin Layden Licensee/Director, Better Returns Holdings Pty Ltd c/o Mr Don McDougall Don McDougall Law Level 8, 65 York Street SYDNEY NSW 2000 [email protected] cc: [email protected]

7 January 2020

Dear Sir/Madam

Reference No. DOC20/001704

Matter Disciplinary Complaint

Licence No. GMS4010639

Licensee Mr Justin Layden

Complainant Mr Sean Goodchild, Director of Compliance Operations, Liquor & Gaming NSW

Premises 111 Prince Charles Road, Belrose NSW 2085

Issue Whether disciplinary action should be taken under Part 8 of the Gaming Machines Act 2001 (NSW) against Mr Justin Layden.

Legislation Part 8 of the Gaming Machines Act 2001 (NSW)

Decision with Reasons and Notice of Disciplinary Action on Complaint to the Independent Liquor and Gaming Authority against Mr Justin Layden, holder of Gaming Machine Seller

licence GMS4010639, under Part 8 of the Gaming Machines Act 2001 (NSW)

On 1 March 2018, Mr Sean Goodchild (“Complainant”), Director Compliance Operations, Liquor & Gaming

NSW, as a delegate of the Secretary of the NSW Department of Industry (then responsible for liquor and

gaming matters), submitted to the Independent Liquor and Gaming Authority (“Authority”) a disciplinary

complaint (“Complaint”) in relation to Mr Justin Layden who is the licensee of a New South Wales Gaming

Machine Seller Licence, number GMS4010639.

The Complaint is made under Part 8 of the Gaming Machines Act 2001 (NSW) (“Act”) and specifies two

grounds of complaint (“Grounds”) that are available under section 129(3) of the Act. The Authority has

considered the Complaint material (briefly listed in Schedule A below) and all submissions received in

relation to the Complaint and decided to take the following disciplinary action:

(i) Pursuant to section 131(2)(d) of the Act, Gaming Machine Seller Licence GMS4010639 held by Mr Justin Layden is suspended for a period of 12 months with effect from 4 February 2020.

(ii) Pursuant to section 131(2)(a)(i) of the Act, Mr Justin Layden is ordered to pay a monetary penalty to the Secretary of the New South Wales Department of Customer Service (“Secretary, DCS”) in the sum of $8,000.00 by no later than 4 February 2020.

(iii) Pursuant to section 131(2)(i)(i) of the Act, Mr Justin Layden is ordered to pay the Secretary, DCS the amount of $26,486.47, being the costs on the investigation giving rise to this Complaint, by no later than 4 February 2020.

(iv) Pursuant to section 131(2)(e) of the Act, impose the following condition, commencing on 4 February 2020, on Gaming Machine Seller Licence GMS4010639:

mailto:[email protected]



DOC20/001704 – Final Decision on Disciplinary Complaint – Section 131 Decision

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This licence shall not be exercised until the monetary penalty and costs ordered by the Authority in its disciplinary decision dated 7 January 2020 have been paid in full.

Information about review rights is provided at the end of the attached statement of reasons. If you have any

questions about this letter, please contact [email protected].

Yours faithfully

Murray Smith Deputy Chairperson For and on behalf of the Independent Liquor and Gamin g Authority



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FINDINGS ON COMPLAINT

INTRODUCTION

1. On 1 March 2018, Mr Sean Goodchild (“Complainant”), the Director Compliance Operations for Liquor

& Gaming NSW (“LGNSW”) in his capacity as a delegate of the Secretary of the NSW Department of

Industry, made a disciplinary complaint to the Independent Liquor and Gaming Authority (“Authority”)

under Part 8 of the Gaming Machines Act 2001 (NSW) (“Act”). The complaint is made in relation to Mr

Justin Layden, who personally holds a Gaming Machine Seller (“GMS”) Licence number

GMS4010639.

2. OneGov licensing records maintained by LGNSW and obtained by the Authority on 18 April 2019

indicate that the primary (and only) premises recorded in respect of this licence is 111 Prince Charles

Road, Belrose New South Wales (“NSW”) 2085. The licence has a recorded start date of 31 January

2000, with a current expiry date of 15 February 2020.

GROUNDS OF COMPLAINT

3. The complaint letter (“Complaint”) specifies two grounds (“Grounds”) that are available under section

129(3) of the Act. Relevantly to this matter, section 127(1) defines a licensee to include the holder of a

gaming-related licence (which includes a GMS licence as held by Mr Layden).

4. Ground 1 is based upon section 129(3)(a)(i) of the Act and alleges that the licensee, Mr Layden, has

contravened provisions of the Act or Gaming Machines Regulation 2010 (NSW) (“Regulation”). Briefly,

the four Particulars in this Ground specify the following contraventions:

(a) Ground 1 Particular 1 contends that in or around April 2017 Mr Layden contravened

section 71(2) of the Act by purchasing approved gaming machines from a person, Mr

Riad Allam, who is not authorised by or under this Act to sell gaming machines.

(b) Ground 1 Particular 2 contends that in or around December 2016 Mr Layden contravened

section 71(2) of the Act as a result of purchasing approved gaming machines from a

person, Mr Riad Allam, who is not authorised by or under this Act to sell gaming

machines.

(c) Ground 1 Particular 3 alleges that in or around 2016 and 2017 Mr Layden contravened

section 79(1) of the Act by consigning or moving an approved gaming machine without

providing written notification to the Authority.

(d) Ground 1 Particular 4 alleges that in or around March 2017 Mr Layden has contravened

section 80(4) of the Act when, by a fraudulent representation, scheme or practice he

obtained for himself or another person, or induced a person to deliver, give or credit to

him or another person, any money, benefit, advantage, valuable consideration or

security.

5. Ground 2 is based upon section 129(3)(e)(iv) of the Act and alleges that the licensee, Mr Layden, is no

longer a fit and proper person to hold a gaming-related licence. Particular 1 makes contentions in

relation to Mr Layden’s honesty, knowledge and ability (specifically his integrity and character) whilst

Particular 2 refers to and relies upon the allegations in Ground 1 and makes further contentions

pertaining to his knowledge and ability.

COMPLAINT MATERIAL

6. A list of material comprising the initial Complaint - including a one-page cover letter, a twenty-three

page submission specifying the Grounds (accompanied by a dramatis personae, chronology of events

and a list of exhibits) and all Exhibits referred to in the Complaint - is provided at Schedule A

(collectively, the “Complaint Material”).

CONSULTATION

Show Cause Notice dated 19 March 2018


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7. On 19 March 2018 the Authority’s Reviews and Secretariat Unit (“Authority Secretariat”) sent a letter to

Mr Justin Layden and the Directors of Better Returns Holdings Pty Ltd (the corporate entity through

which Mr Layden conducts his licensed business) (“Better Returns”) inviting them to show cause or

make submissions as to why disciplinary action should not be taken on the Grounds of Complaint.

This notice was copied to the Complainant and also specified a timetable for the provision of any

evidence or submissions from the parties in relation to the Complaint.

Request for Particulars dated 16 April 2018

8. On 16 April 2018 the Authority received a three-page email from Mr Don McDougall, solicitor, on

behalf of Mr Layden and Better Returns (the “Respondents”) addressed to the Complainant seeking

further and better particulars of the Complaint (“Request for Particulars”).

Response to Request for Particulars dated 30 April 2018

9. In a five-page letter dated 30 April 2018 the Complainant sent a letter to the Respondents, copying the

Authority, providing information in response to the Request for Particulars (“Response to Particulars”).

Request for Extension dated 28 May 2018

10. In a one-page email dated 28 May 2018, Mr McDougall, requested an extension in the timetable for

making submissions, which was granted by the Authority.

Respondent Submission on Merits of Complaint dated 1 June 2018

11. In a fourteen-page letter dated 1 June 2018, Counsel for Mr Layden, Mr Paul Bolster, addressed the

merits of the Complaint (“Respondent Submission”), accompanied by the following material:

• A one-page letter from Mr Durban Arnold, Chief Executive Officer (“CEO”) of Ourimbah-

Lisarow RSL Club Ltd, to the Authority dated 28 May 2018.

• A one-page letter from Mr D Sullivan, CEO of Forestville RSL Club, to the Authority dated

28 May 2018.

12. The key contentions in this correspondence have been considered by the Authority and noted in the

findings section of this letter, below.

Submission in Reply from the Complainant dated 8 June 2018

13. The Complainant replied to the Respondent Submission in a five-page letter dated 8 June 2018

(“Complainant Reply Submission”). All of the key contentions made in this correspondence have been

considered by the Authority and briefly noted in the findings section of this letter.

Additional Information Sought by Authority on 26 March and 8 April 2019

14. In a two-page letter dated 26 March 2019 from the Authority Secretariat, the Authority sought advice

from the Complainant whether certain gaming machines specified in the Complaint had ever been

authorised for destruction by the Authority or a delegate pursuant to section 81A of the Act. In a one-

page letter dated 29 March 2019, copied to the Respondents, the Complainant advised that there are

no records indicating that the machines have been approved for destruction, nor the subject of any

pending applications for such approval. The Complainant noted that section 81A of the Act had

commenced after the conduct that is the subject of this Complaint.

15. In a follow up email dated 8 April 2019 from the Authority Secretariat to the Complainant, the Authority

sought clarification as to whether the relevant machines had been the subject of any decision under

section 64 of the Act to revoke their approved status. In an email dated 24 April 2019, copied to the

Respondents, the Complainant confirmed that no such action had been taken.

16. In response to an email from Mr McDougall about this matter on 9 May 2019, the Authority confirmed

in an email dated 10 May 2019 its understanding that the machines the subject of Complaint retained

their approved status at relevant times.

Material Sourced by the Authority


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17. The Authority Secretariat sourced a copy of the OneGov licence record for Gaming Machine Seller

Licence GMS4010639 as at 18 April 2019.

FINDINGS

18. A disciplinary complaint under Part 8 of the Act is an administrative matter and findings of fact are

made on the civil standard of proof. However, in accordance with the principle enunciated by the High

Court of Australia in Briginshaw v Briginshaw (1938) 60 CLR 336, the seriousness of the allegation

made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the

consequences flowing from a particular finding are matters that are relevant to deciding whether an

allegation has been proved, on the balance of probabilities.

Ground 1

19. Ground 1 is based on section 129(3)(a)(i) of the Act and alleges that Mr Layden, whilst the holder of

GMS Licence GMS4010639, has contravened provisions of the Act.

20. The Authority notes that section 129(3)(a)(i) states:

(3) The grounds on which a complaint in relation to a licensee or close associate may be made are as follows: (a) that the licensee:

(i) has contravened a provision of this Act or the regulations, or …

21. Ground 1 particularises four regulatory contraventions which are alleged to have occurred between

2016 and 2017.

22. The Complainant has provided at Exhibit E01 to the Complaint OneGov licence records maintained by

LGNSW for GMS Licence number GMS4010639 as at 6 April 2017 and 23 February 2018 and the

Authority has also obtained an updated record as at 18 April 2019. These records establish during the

relevant period for the events specified in Ground 1, Mr Layden was the licensee of GMS Licence

GMS4010639, which has a start date of 31 January 2000 and a current expiry date of 15 February

2020. There is no indication in the Complaint Material or submissions that this licence was cancelled

or suspended at any time since it was granted.

23. The Authority is satisfied that Mr Layden was a gaming related licensee at all relevant times specified

in this Complaint.

Ground 1 Particular 1

24. Ground 1 Particular 1 alleges that Mr Layden, licensee of GMS Licence GMS4010639, contravened

section 71(2) of the Act during April 2017 by purchasing five approved gaming machines from Mr Riad

Allam (who, according to the OneGov licence at Exhibit E13, is the holder of Gaming Machine

Technician (“GMT”) Licence GMT4010748 (“Allam OneGov GMT Licence Record”)) and Mr Allam is a

person who is not authorised to sell gaming machines.

25. The Authority notes that section 71(2) of the Act states:

A person who purchases or offers to purchase an approved gaming machine is guilty of an offence unless the gaming machine is purchased from, or the offer is made to, a person who is authorised by or under this Act to sell the gaming machine.

Mr Layden Purchased Five Gaming Machines from Mr Allam – April 2017

26. At paragraph 23 of the Complaint, the Complainant alleges that Mr Layden, through regular visitation

to Mr Allam’s premises identified gaming machines XSG306202, XSG306203, XSG306204,

XSG306205 and XSG306206 on the warehouse floor.

27. The Authority is satisfied, on the basis of question 70 of Mr Justin Layden’s interview with LGNSW

inspectors dated 13 April 2017 at Exhibit E12 of the Complaint (“Layden Interview”), that Mr Layden


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identified these gaming machines at Mr Allam’s factory in Chipping Norton (“Chipping Norton

Warehouse”) during one of his visits, when he refers to the “Mojo units” in the following extract:

Q70 Great. O.K. So tell me about the process, like getting these machines into the club. A … Um, I went out to his warehouse say a month and a half ago. I don't know the date, but a

month and a half ago for the purposes um, to look at some machines that he was picking up for me. He was picking up about twenty one machines from a whole heap of hotels that I'd just purchased them from. I was just checking how good the condition was. When I was out in his warehouse I saw um, one of these Mojo units, I always look around his factory to see what he's got that I might be able sell that I can't get. And ah, I said, "Oh what's this about?" And he said, "I got a five station system. Um, if you want to sell it, see if you can sell it." So I looked at it. He cleaned it up, fired it up, made sure it was all working properly. And at that stage I offered it to some people to sell…

28. The Authority further notes that at questions 164 to 169 of the Layden Interview, Mr Layden confirms

that there were 5 Vegas Star multi-terminal machines, 2 of which were sold to Hornsby RSL Club

(“Hornsby RSL”) with the Richmond Club Limited (“Richmond Club”) interested in the other 3:

Q164 So I suppose how many machines were there to be sold or on-sold? A In the Vegas Star? Q165 Yeah. A I believe five. Q166 All right. So were all five offered to Hornsby? A As per the email that I sent, yes they were. Q167 All right. They've only accepted two. A Correct. Q168 What happened to the other three? A They have been agreed to go to another club. Another club wanted to buy three. Q169 O.K. Which club was that? A The Richmond Club.

29. The Authority accepts the Complainant’s contention, at paragraph 31 of the Complaint, that during

their LGNSW interviews, both Layden and Allam confirmed that the seized gaming machines were

purchased by Layden from Allam for the purpose of on sale to NSW licensed premises. The Authority

notes that Mr Layden’s response to questions 135 to 136 and 153 to 160 of the Layden Interview

confirm that, after seeing the gaming machines at the Chipping Norton Warehouse, Layden bought the

machines from Allam and subsequently negotiated the sale of machines with serial numbers

XSG306202 and XSG306203 to Hornsby RSL (as evidenced in Tax Invoice 342 issued by Better

Returns to Hornsby RSL on 23 March 2017 for XSG306202 and XSG306203 at Exhibit E31 of the

Complaint (“Tax Invoice 342”)). The relevant exchange is as follows:

Q135 All right. So in relation to these machines, the Vegas Mojo's or whatever. A Yep. Q136 So about six, seven weeks ago you walk in and there they are. A Yep. … Q153 All right. O.K. So go out, Riad's got this machine. You negotiate the sale with Hornsby. You

invoice Hornsby, so twenty thousand plus GST, so $22,000. A Yep. Q154 Does Riad get paid? A Yes, I pay him an agreed price that he was selling it to me for. Q155 O.K. So you've bought them from Riad. A Correct. Q156 You've then on-sold them to the club. A I don't pay him in full until it's all installed and I get paid, but I'll pay a fifty percent deposit

upfront if he, if he wants it. Q157 Yep. A Because you know, he's tight, you know. Some people need money straight away. So I'll pay

him um, some money upfront, a proportion, but in this case I paid him two and a half thousand dollars upfront.

Q158 Yep. A And that was in lieu of him completing the job. When he completes I pay him the balance. Q159 So it would have been another two and a half thousand. A Yeah. Q160 So, all right. All right. In terms of payment, how do you ordinarily pay him? Is it by invoice? Is it

- - -


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A Yeah, yeah, so it's invoice. So he sends me an invoice and I do a direct deposit to his account.

30. The Authority further notes that at question 233 of the Layden Interview, Layden confirms that he

purchased the gaming machines from Mr Allam:

Q233 Great. All right. So you buy the machines off Riad. You sell them to Hornsby and almost to Richmond.

A Yep.

31. At paragraph 27 of the Complaint, the Complainant contends that on 4 April 2017, Mr Allam, through

his company Tonita Enterprise Pty Ltd (“Tonita”), raised tax invoice 98005 in respect of the sale of

those machines and other ancillary items to Mr Layden for a total consideration of $22,220.

32. The Authority is satisfied, on the basis of tax invoice 98005 provided at Exhibit E15 of the Complaint

(“Tax Invoice 98005”), that on 4 April 2017 a business identified as “Tonita Enterprise” invoiced

“Bestnet Gaming” for a total of $22,220.00 which included $18,000.00 for “5 x vegas roulette complet

+ 4 computer dealer + spacer” (sic).

33. The Authority notes that Australian Securities and Investments Commission (“ASIC”) Company Extract

for Tonita Enterprise Pty Ltd as at 23 May 2017 at Exhibit E14 (“Tonita ASIC Extract”) establishes that

this is a registered Australian proprietary company limited by shares and both Mr Allam and his wife,

Ms Antoinette Allam, have simultaneously held the roles of company directors and secretaries since

14 July 2006.

34. At questions 18 and 19 of the Layden Interview, Mr Layden confirms that he is the “Director” of a

company operating in the gaming industry called “Better Return Holdings”. The Authority notes, on the

basis of an ASIC Company Extract for Bestnett Gaming Solutions NSW Pty Ltd (“Bestnett Gaming”) as

of 6 July 2017 at Exhibit E03 (“Bestnett Gaming ASIC Extract”), that Mr Layden was the sole

director/secretary for Bestnett Gaming - an Australian proprietary company, limited by shares, that was

de-registered with ASIC on 19 July 2015. An ASIC Company Extract for Better Returns Holdings Pty

Ltd as at 30 May 2017 at Exhibit E02 (“Better Returns ASIC Extract”) indicates that Mr Layden was the

sole director and secretary of that company, commencing in those roles on 19 February 2013.

35. Notwithstanding that Tax Invoice 98005 is made out to a company that, at the time of invoice (4 April

2017), had been de-registered some years earlier (19 July 2015), the information before the Authority

is sufficient to establish that the invoice was issued to a company run by Mr Layden.

Deposit Paid by Mr Layden to Mr Allam For Two Machines Installed at Hornsby RSL

36. On the basis of Commonwealth Bank Receipt N041073405021 at Exhibit E16 of the Complaint

(“Receipt N041073405021”) and ANZ Bank Statement for Tonita (with the Account name recorded as

“Antoinette Allam Trading As Tonita Enterprise”) at Exhibit E17 of the Complaint (“Tonita ANZ Bank

Statement”), the Authority is satisfied, as alleged at paragraph 28 of the Complaint, that Mr Layden

paid $2500.00 to Tonita for “installs” on 10 April 2017.

37. At paragraph 29 of the Complaint, the Complainant contends that on 11 April 2017, Mr Allam

confirmed that he had received a deposit for $2,500.00, the day before, from Mr Layden for the two

gaming machines seized by LGNSW on 11 April 2017.

38. The Authority accepts this contention on the basis of questions 64, 321-323 and 355-358 of Mr Allam’s

first interview with LGNSW Inspectors dated 11 April 2017 at Exhibit E07 of the Complaint (“First Allam

Interview”), where Allam confirms that Layden offered him $2000 for each machine and paid him

$2500 deposit for the two machines delivered to Hornsby RSL on 10 April 2017 (being gaming

machines XSG306202 and XSG306203), stating:

Q64 And how much did you, were you going to sell them for to Hornsby RSL? A I’m not selling there, like sell them to, uh, Justin and I, he offered me two grand for each one. … Q321 So I’m talking, I’m, just let me clarify. I’m talking about the machines you delivered to Hornsby

yesterday. A Yeah, I didn’t pay enough.


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Q322 And the three that you've got in the truck - - - A No, I didn't pay him because we didn't sell it yet and I still sell on Friday, I didn't get any cash.

He put the money in my account, deposit 2500, just yesterday. Q323 Who was that? A Justin. … Q355 So is it the case that Justin has paid you $2500 for the, for those newer machines? A Yes. Q356 And is that the two machines that went to Hornsby yesterday and there's three machines that

you were - - - A No. Q356 - - - going to deliver - - - A That 2500 is 50 percent deposit of the machine delivered to Hornsby because $2000 for the

machine we ..... (01.05.01) and $500 for install and 500 for delivery. Q357 And, um, the machines that you were going to deliver, the similar three machines you were

going to deliver to Richmond - - - A He told me to pay on Thursday - - - Q358 How much? A - - - he said to me, they have to pay me 6000 if I didn't install and they have to pay me 7500 if

we install.

The 5 Gaming Machines Were “Approved” Gaming Machines at Relevant Times

39. Out of caution, the Authority has made enquiries with LGNSW to confirm that the gaming machines

XSG306202, XSG306203, XSG306204, XSG306205 and XSG306206 were actually approved gaming

machines at relevant times. This is because section 4 of the Act defines an approved gaming machine

as follows:

The approved gaming machine means a gaming machine declared under section 64 to be an approved gaming machine and includes: (a) any subsidiary equipment approved by the Authority for use in connection with the gaming

machine, and (b) any component of the gaming machine (other than a component prescribed by the regulations as

not being part of the gaming machine), and (c) any specially approved gaming machine within the meaning of section 141.

40. Pursuant to section 64(1) of the Act, the Authority may declare that a device referred to in such

declaration is an approved gaming machine for the purposes of this Act. However, such device ceases

to be an approved machine if its declaration as an approved machine is revoked under section 64(7).

41. The Authority accepts the information provided by the Complainant in its submission dated 29 March

2019 that a search of LGNSW records discloses no records indicating that the 5 gaming machines at

issue in Ground 1 Particular 1 have been approved for destruction at any point in time, nor the subject

of pending applications or approvals for destruction. The Authority further accepts advice from the

Complainant dated 24 April 2019 that none of these machines had their approval revoked pursuant to

section 64(7) of the Act.

42. The Authority is satisfied that the five machines the subject of Ground 1 Particular 1 were approved

gaming machines at the time of the misconduct and remain approved machines at this time.

Mr Layden’s Knowledge of Mr Allam’s GMT Licence

43. At paragraph 32 of the Complaint the Complainant contends, by reference to questions 115 and 261

of the Layden Interview, that Mr Layden admitted his awareness that Allam was only a licensed

technician and that the practice of him purchasing machines from Allam only occurred if the gaming

machines were “good ones”. These contentions are established at the following exchanges:

Q115 O.K. So are you aware of Riad holds a license? A Ah, he's got a technician's license. … Q261 O.K. With your, going back to obviously you heading to Riad's place of work. How often do

you buy machines off him? A Oh, rarely. Only if he's got good ones, mate. Like anything I've got buyers and I deal with a lot

of people.

Mr Layden’s Knowledge as to What is Permitted By His GMS Licence


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44. At paragraph 33 of the Complaint, the Complainant refers to questions 234 and 235 of the Layden

Interview and contends that when questioned about his knowledge of his GMS licence and related

authorisations, Mr Layden stated that he was under the firm belief that he was able to buy gaming

machines from “anywhere” as long as the machine was licensed. The Authority accepts this

contention on the basis of the following extract from the interview:

Q234 Your licence permits you to purchase machines. A Yep. Q235 Who from? A Anywhere. Q236 Would it have to be a dealer or a technician or a club or - - - A Any licenced machine. But I can't find my ..... (15:34:31) because you don't, you shouldn't

have any machines. So you know what I mean, but it's - - - Q237 Yeah. A - - - I find that people who have licences and then, and so the other sixty, ninety five percent

of the machines I buy are from pubs and clubs.Q238 Yep. All right. O.K. What else?… Q239 Where did the other five come from? The other five percent that you buy? If you buy from .....

(15:35:00) A Oh, from people like Riad and other, other dealers, you know. Other people, like I .....

(15.34.14) people buy them off me, so, yeah, like off them, but I've got probably the best contact. Like receivers and liquidators they make up the ninety five percent as well because I buy, when a venue goes broke I'd probably be the number one person that buy everything from them. Um, yeah, I'd be probably the number one person in the state who'd buy everything. I deal with the banks and the receivers and liquidators and all that sort of stuff.

Mr Layden’s Submission on Ground 1 Particular 1

45. In the Respondent Submission, Mr Layden states that there is no issue that he did purchase the five

machines (XSG306202, XSG306203, XSG306204, XSG306205 and XSG306206) from Mr Allam’s

company Tonita. However, he contends that at the time of purchase, Mr Layden was unaware that

Allam did not hold a licence to sell these machines.

46. Mr Layden further contends that he has known Mr Allam for approximately 18 years and has

maintained periodic contact with Allam in a professional context whenever service and parts were

required. Mr Layden claims that he became aware that Allam “established his own business, trading

as Tonita Enterprise; a business name that was registered in 2002” and during that period Allam

“never displayed anything or conducted himself in a way” that Mr Layden thought was “unlawful or

unethical”.

47. Mr Layden further contends that he “reasonably believed” that Mr Allam’s licence permitted him to buy

and sell licensed machines and he was “aware that Mr Allam was in the business of buying and selling

machines, a matter that Mr Allam freely admits in his record of interview”.

48. Mr Layden contends that he observed a factory full of machines and that Mr Allam claimed that he

routinely acquired machines from some of the biggest players in the market. Mr Layden contends that

“there was nothing to suggest” that “the terms of his licence prevented him from doing so”.

49. Mr Layden further contends that he believed he was “able to purchase machines if the machines were

still licen[s]ed and able to be re used (eg they had a valid serial plate and that machine would be

approved by quickchange) from a licen[s]ed person”. Mr Layden claims that that he was “unaware”

that Allam’s licence did not permit him to sell machines to Mr Layden.

50. The Authority has also considered these contentions as to his state of awareness, along with Mr

Layden’s more generalised contentions regarding the “Hornsby RSL complaints”. Mr Layden claims

that the “genesis” of the matters specified in relation to Hornsby RSL lie in the “failure” of SG Gaming

ANZ Pty Ltd (“the Manufacturer”) to ensure the destruction of 28 gaming machines that were sent for

destruction in November 2016 and their failure to remove the compliance plates from those machines

prior to the consignment leaving its premises.

51. Mr Layden further submits that, despite being provided with a certificate stating that these machines

had been destroyed, the machines had not been destroyed and five of them ultimately found their way


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to Mr Allam’s Chipping Norton Warehouse. He submits that none of this had anything to do with Mr

Layden and that the proper destruction of machines involves the “removal of the serial plate from the

machines, with the owner retaining the plate as evidence of removal before the machine is sent to a

metal recycling facility for physical destruction”.

52. Mr Layden submits that since the serial plates had not been removed from the five machines that he

acquired from Allam, there was “no basis for him, or any third party dealing with him, to know that they

had been sent for destruction by SG Gaming”. Mr Layden further contends that there was “no way” for

him to check that the machines had been sent for destruction and no alert or refusal was triggered

when two of these machines were transferred to Hornsby RSL on the Authority Quickchange system.

53. Mr Layden also takes issue with the assertion that the machines the subject of this Complaint were

“re-birthed”. Mr Layden characterises re-birthing as “a concept that described the transferring of an

identification related part from an otherwise obsolete, faulty but essentially different machine onto a

stolen machine (ordinarily from a damaged or insurance write off motor vehicle to a stolen motor

vehicle) in circumstances that transform and conceal the true identity of the stolen machine”. He

submits that in the present circumstances, there was “no transfer of identity consistent with re-birthing;

the machines and serial number plates remained intact and there is no suggestion of any theft”. Mr

Layden describes this distinction as “critical” as any person dealing with the machines, such as Mr

Layden or Hornsby RSL, would not have any idea that these machines had been sent by a third-party

(the Manufacturer) for destruction by its agent.

54. Mr Layden refers to his response to question 70 of the Layden Interview as indicating how he came to

know of these machines. He contends that Hornsby RSL was one potential customer and that on 10

March [2017] he sent this club’s representatives an email (a process duplicated with his other clients)

offering a "5 station vegas start mojo system with the wide screens”. Ultimately, an agreement was

reached between Layden and Hornsby RSL for that club to acquire two of the five machines.

Complainant’s Reply

55. The Complainant contends in the Complainant Reply Submission that whilst Mr Layden describes one

specific method of destruction, it is not the only method of proper destruction of gaming machines. The

Complainant submits that the term “re-birth” as used in this Complaint may also refer to circumstances

whereby, for example, gaming machines that were thought to have been destroyed are repaired and

then sold to NSW licensed venues without any need to use false serial numbers.

56. The Complainant re-iterates its contention that Mr Layden knows he is a licensed seller and that Allam

is a licensed technician, and refers specifically to Layden’s responses to questions 115, 116, 118 and

119 of the Layden Interview.

57. The Complainant submits that Layden’s propositions - that he was unaware that Allam did not hold a

licence to sell the machines, that he reasonably believed that Allam’s licence permitted him to buy and

sell licensed machines and there was nothing to suggest that Allam’s licence prevented him from

buying and selling gaming machines “cannot be sustained”.

Conclusion

58. The Authority notes that the Receipt N041073405021 and Tonita ANZ Bank Statement describe the

$2500 deposit paid by Mr Layden into account name Antoinette Allam Trading As Tonita Enterprise as

“installs”.

59. However, the description section of Tax Invoice 98005 refers to “5 x vegas roulette complet + 4

computer dealer + spacer for $18,000.00”. This is separate to the line items for “install” at Hornsby for

$500.00, at Richmond for $700.00 and the further line item that reads “igt neon prepare and install” for

$500.00.

60. The Authority is satisfied that “$18,000.00” noted in respect of “5 x vegas roulette complet + 4

computer dealer + spacer” is for the purchase of the gaming machines, as it is a separate and more

substantial payment to the fees specified for installation of machines. This is further supported by the


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statements extracted from the Layden Interview above, where Mr Layden confirms that he purchased

the gaming machines from Mr Allam.

61. The Authority accepts the contention at paragraph 34 of the Complaint, that during April 2017 Mr

Layden purchased gaming machines with serial numbers XSG306202, XSG306203, XSG306204,

XSG306205 and XSG306206 for a total price of $18,000 excluding GST from Mr Allam.

62. The Authority refers to the legislative provisions regarding “approved” gaming machines that are noted

above. In the absence of any information indicating that these five machines had ceased to hold this

status, the Authority finds that during April 2017, at the time of sale, these machines were approved

gaming machines.

63. The Authority further accepts the contention in paragraph 25 of the Complaint that the Allam OneGov

GMT Licence Record establishes that Mr Allam was, at the time of that transaction, the holder of a

GMT licence.

64. Section 83 of the Act provides the types of gaming-related licences available under the Act and the

authorisation that each confers. As submitted at paragraph 26 of the Complaint, section 83(1)(c) does

not give a GMT licence holder the authority to sell approved gaming machines within NSW. That

section enables such licensee:

(i) to service, repair and maintain approved gaming machines, and (ii) as an employee of the holder of a testing facility licence—to carry out, in the course of that

employment, the authorised functions of that licensee,

65. The Authority considers the prohibition against any person buying a gaming machine in NSW from a

person who does not hold the requisite licence to be a straightforward regulatory concept that should

be readily understood by all gaming related licensees.

66. The Authority does not find credible the contention that Mr Layden did not know that Mr Allam was not

licensed to deal in or sell gaming machines. On his own account, Mr Layden was an experienced

gaming machine seller and having acquired that type of licence it was his business to know that a

person must hold either a seller or dealer’s licence to sell a gaming machine in NSW. At question 113

of the Layden Interview, Mr Layden admitted that he had known Mr Allam for “at least sixteen years”

and the responses to question 46 in the First Allam Interview, questions 228 to 229 in Mr Allam’s

second interview with LGNSW Inspectors dated 17 May 2017 at Exhibit E08 of the Complaint

(“Second Allam Interview”) and questions 70, 101, 115, 116 and 275-278 of the Layden Interview

establish that Mr Layden and Mr Allam had a reasonably good awareness of the nature of each

other’s business. The response to question 115 of the Layden Interview indicates that Mr Layden was

aware that Allam traded as a gaming machine technician.

67. Even if, as alleged in the Respondent Submission, Mr Layden was actually unaware that gaming

machines XSG306202, XSG306203, XSG306204, XSG306205 and XSG306206 were intended to be

destroyed, an experienced licensed gaming machine seller who is proposing to buy a gaming machine

from a person should ensure that the person selling the machines is licensed to do so. In the absence

of any information establishing that Mr Allam made positive representations to this effect, a purchaser

in the position of Mr Layden should make reasonable enquiries as to whether Mr Allam held such

licence.

68. The gaming machines industry is one of the most closely regulated fields of trade and commerce

under NSW law. Dealings with respect to approved gaming machines are carefully controlled. This

regulatory scheme serves to advance the relevant statutory objects of minimising harm associated

with the misuse and abuse of gambling activities (per section 3(1)(a) of the Act); facilitating the

balanced development in the public interest of the industry (per section 3(1)(c)); ensuring the integrity

of the industry (per section 3(1)(d)) and providing for the ongoing reduction in the number of machines

in New South Wales (per section 3(1)(e). In this context it is implicit that a gaming related licensee

know the scope of their authorisation and make reasonable efforts to ensure that any counterparty to a

dealing with respect to gaming machines holds the requisite licence to engage in that dealing. This is


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a minimum expectation pertaining to a gaming licensee’s ability, or diligence, with respect to matters

of regulatory compliance.

69. There is no evidence or information before the Authority indicating that during April 2017 Mr Allam or

his company Tonita held a gaming machine dealer’s licence or seller’s licence. The Authority is

satisfied that Allam was not authorised to sell approved gaming machines in NSW.

70. The Respondents have provided no evidence or information indicating that Mr Layden made

reasonable enquiries as to whether his counterparty, Mr Allam, was licensed to sell approved gaming

machines. He could have confirmed whether or not Mr Allam held a seller’s or dealer’s licence by way

of simple enquiries directed to LGNSW at all relevant times.

71. In conclusion, the Authority finds that Mr Layden, whilst the licensee of a gaming related licence,

contravened section 71(2) of the Act by purchasing approved gaming machines XSG306202,

XSG306203, XSG306204, XSG306205 and XSG306206 from Mr Allam, who was not authorised by or

under the Act to sell those gaming machines.

72. Ground 1 Particular 1 is established.


73. Ground 1 Particular 2 alleges that Mr Layden, as licensee of GMS Licence GMS4010639,

contravened section 71(2) of the Act during 2016 by purchasing one further approved gaming machine

from Mr Allam, a person who is not authorised to sell gaming machines.

74. Section 71(2) is extracted above.

Gaming Machine XSG303407 Dispatched For Destruction

75. At paragraph 39 of the Complaint it is contended that following the production of records by the

Manufacturer, a review performed by LGNSW of all gaming machines transported by Mr Habib

Kayrouz (a person to whom the Manufacturer would dispatch machines to for the purpose of

transporting them to be destroyed) identified an additional gaming machine, XSG303407, that was

operating in Balgowlah RSL Memorial Club (“Balgowlah RSL”) and which was installed under Mr

Layden’s GMS Licence.

76. At paragraph 40, the Complainant contends that the Manufacturer provided LGNSW inspectors with a

destruction certificate issued by Sydney Metal Traders (a scrap metal merchant in Greenacre) on 16

March 2016 indicating that gaming machine XSG303407 had been part of a consignment of 53

gaming machines scheduled for destruction on 16 March 2016.

77. Complainant Exhibit E18 contains a list of gaming machines sent for destruction by the Manufacturer

between 2 March 2016 and 22 March 2017. The first page indicates that gaming machine XSG303407

was dispatched by the Manufacturer to a “Habib Kayrouz” on 16 March 2016. Exhibit E19 contains a

copy of the certificate of destruction issued by Sydney Metal Traders to “The Cleanup Guy” on 16

March 2016 stating “This is to certify that Habib Kayrouz brought 53 poker machines from Shuffle

Master which have been dismantled by an excavator on our site for scrap metal purposes at 15-21

Claremont avenue, Greenacre NSW 2190 on the 16th of March 2016”. The Authority notes that

although this certificate does not specify any specific gaming machine numbers, the information in

Exhibit E18 and Exhibit E19 is sufficient to establish the contention in paragraph 40 of the Complaint.

Gaming Machine XSG303407 Detected On Licensed Premises

78. The Authority further accepts the contention at paragraph 41 of the Complaint that on 16 December

2016, approved gaming machines XSG303407, XSG304424 and XSG304421 were installed at

Balgowlah RSL and that Central Monitoring System (“CMS”) documents indicate that Mr Layden was

the supplier and owner of those machines prior to installation.

79. The Quickchange Authorisation Report for application 261909 provided at Exhibit E20 confirms that

gaming machine number XSG303407 was authorised to be installed into Balgowlah RSL on 16

December 2016 alongside gaming machines XSG304424 and XSG304421, all with the description

“Vegas Star Roulette”. The CMS User Interface Screenshots for Application number 261909 provided


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at Exhibit E21 indicated that on 16 December 2016 Mr Layden would be providing the service of

installing gaming machines XSG303407, XSG304424 and XSG304421 and that the owner and

supplier of those machines was Layden.

Mr Layden Purchased Gaming Machine XSG303407 From Mr Allam – December 2016

80. At paragraph 42 of the Complaint, the Complainant contends that gaming machine XSG303407 was

included in a tax invoice number “428” presented by Better Returns to Balgowlah RSL for the sum of

$13,200 including GST.

81. Although the gaming machine numbers XSG303407, XSG304424 and XSG304421 were not specified

in the Tax Invoice numbered 428 from Better Returns to Balgowlah RSL dated 20 December 2016 that

is in evidence at Exhibit E22, the Authority is satisfied that this invoice establishes that Mr Layden’s

company did in fact sell to Balgowlah RSL “1 x 3 station Vegas Star Roulette system, including

computer, 60 inch screen and installation” for $13,200 (including GST) as noted in the invoice.

82. The Complainant contends at paragraph 43 that the bank statements of Better Returns and Tonita

confirm that during the days prior to the installation of those machines at Balgowlah RSL on 16

December 2016, two payments were made by Layden to Allam in the amounts of $3,500 (8 December

2016) and $967 (14 December 2016).

83. The Complainant further contends, at paragraph 44, that whilst no invoice apparently exists for the

payment made on 8 December 2016, the payment made on 14 December 2016 directly concerned the

installation at Balgowlah RSL, where a 60-inch TV was provided as part of this deal.

84. The Authority accepts that the Commonwealth Bank Statements for Better Returns provided at Exhibit

E23 (“Better Returns CBA Statements”) establish that on 8 December 2016, the Business Transaction

Account for Better Returns had a debit of $3500 with the recital “Transfer to other Bank CommBank

app installs” and on 14 December 2016 this account recorded a debit of $967 for “Transfer to other

Bank CommBank app installs”. The Tonita ANZ Bank Statement indicates that the account Antoinette

Allam Trading As Tonita Enterprise received a credit of $3500 on 8 December 2016 for “Transfer from

CBA Installs” and a credit of $967 on 14 December 2016 for “Transfer from CBA Installs”.

85. When explaining the purchase of machines XSG303407, XSG304424 and XSG304421, Mr Jason

Leong (Balgowlah RSL’s Gaming and Operations Manager) told LGNSW inspectors at question 44 of

his interview dated 16 May 2017 that is Exhibit E36 that “they [Justin Layden] provided a brand new

screen, LCD screen which I thought would be a good type of thing”.

86. Although there is no explicit evidence specifying the sale of machines numbered XSG303407,

XSG304424 and XSG304421 from Allam to Layden, the Complainant alleges at paragraph 45 of the

Complaint that Tonita Tax Invoice 70094 directly concerns the supply of the additional TV to

Balgowlah RSL. The Authority notes that Exhibit E24 contains Invoice No 70094 issued by Tonita to

Better Returns dated 15 December 2016 for the provision of one 60” LCD screen for the sum of

$967.00.

87. The Authority is satisfied that the debit against the Better Returns account and corresponding credit

for the account named Antoinette Allam Trading As Tonita Enterprise for the sum of $967.00 on 14

December 2016 concerned the installation of the gaming machines at Balgowlah RSL, where a 60

inch TV screen formed part of that deal.

Gaming Machines Remained Approved Machines

88. The Authority notes the provisions regarding “approved” gaming machines discussed in Ground 1

Particular 1 above and the information provided by the Complainant dated 29 March 2019 and 24 April

2019. In the absence of any indication that gaming machine XSG303407 ceased to hold this status, the

Authority finds that during 2016, at the time of the sale of this gaming machine, gaming machine number

XSG303407 was an approved gaming machine.


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Mr Layden’s Submission and Conclusion

89. In the Respondent Submission, Mr Layden states “As in the case of the Hornsby RSL Machines, Mr

Layden admits the acquisition of the machines from Allam’s company, in the same circumstances as

outlined in the case of Hornsby RSL”.

90. The Authority takes this to mean that Mr Layden admits purchasing gaming machine XSG303407 from

Allam’s company, but at the time of purchase he claims to be unaware that Mr Allam did not hold a

licence to sell gaming machines.

91. The Authority has canvassed the key contentions made by Mr Layden with regard to the Hornsby RSL

machines in Ground 1 Particular 1 above. For the reasons stated above, the Authority does not find

credible Mr Layden’s claim that he did not know Mr Allam did not hold the requisite licence, but even if

he did, he made no reasonable enquiries to ascertain Mr Allam’s licensed status. This is not a

satisfactory response.

92. Noting that in the Respondent Submission Mr Layden admits to buying gaming machine XSG303407

from Mr Allam, the Authority is satisfied that Mr Allam did sell Mr Layden this gaming machine during

December 2016, which was subsequently installed on the premises of Balgowlah RSL on 16

December 2016.

93. The Authority is satisfied that Mr Layden, whilst the licensee of a gaming related licence, did

contravene section 71(2) of the Act by purchasing approved gaming machine number XSG303407

from Mr Allam in December 2016, who was not authorised by or under the Act to sell gaming

machines.



95. Ground 1 Particular 3 alleges that Mr Layden, as licensee of GMS Licence GMS4010639,

contravened section 79(1) of the Act during 2016 by consigning or moving approved gaming machines

to outside the State of NSW without providing written notification to the Authority and manufacturer.

96. The Authority notes that section 79(1) of the Act states:

(1) The holder of a dealer’s licence or seller’s licence who consigns or moves an approved gaming machine: (a) to or from any place at which the licensee carries on the business authorised by the licence,

or (b) from outside the State to a place within the State, or (c) to any place outside the State,

must give the Authority (and, if the gaming machine is being consigned or moved to any place outside the State, the manufacturer of the gaming machine) a written notification stating the particulars required by this section no later than 7 clear days before the consignment or movement or within such other time as may be approved by the Authority. Maximum penalty: 50 penalty units.

Mr Layden Consigns or Moves 18 Gaming Machines Outside of NSW – 2016 and 2017

97. Paragraph 50 of the Complaint contends and Exhibit E25 establishes that on 3 May 2017 a Notice to

Produce was issued by LGNSW under section 21 of the Gaming and Liquor Administration Act 2007

(NSW) to the Commonwealth Bank of Australia (“CBA”) requesting bank statements for “Better

Returns Holdings” between 1 January 2016 to 11 April 2017.

98. The Better Returns CBA Statements produced by the Bank establish, as contended at paragraph 51

of the Complaint that on 4 May 2017 CBA complied with this Notice. As contended at paragraph 52,

these statements recorded the following international transactions:

• A credit of $5,540 on 1 November 2016 with the transfer description recorded as “AUMAAS

DOOEL

PROFORMA INV.DD 25.10.2016 PART

REF 2016110100000636 Fee AUD 10.00000”


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• A credit of $39,940 on 17 November 2016 with the transfer description recorded as

“AUMAAS DOOEL

INV.NO.322 DD 25.10.2016 PART INV

REF 2016111700001474 Fee AUD 10.00000”

• A credit of $68,590 on 30 November 2016 with the transfer description recorded as

“AUMAAS DOOEL

PROFORMA INV.NO.417 DD 09.11.2016

REF 2016113000001059 Fee AUD 10.00000”

• A credit of $84,200 on 30 December 2016 with the transfer description recorded as

“AUMAAS DOOEL

INV.NO.421 DD 14.12.2016 INV.NO.417

REF 2016122900001811 Fee AUD 10.00000”

• A credit of $23,990 on 21 February 2017 with the transfer description recorded as

“AUMAAS DOOEL

INV.NO.439 DD 16.02.2017

REF 2017022100000584 Fee AUD 10.00000”

99. As per paragraph 53 of the Complaint and as evidenced by Exhibit E26, on 31 May 2017 a Notice to

Produce was issued by LGNSW to Mr Layden. This document was accompanied by “Schedule A” (a

list of gaming machine serial numbers) and sought:

All records (including but not limited to tax invoices, destruction certificates, storage documents and emails) relating to the current location, sale, installation, movement, consignment, storage and / or destruction of each and every machine identified and included in SCHEDULE - A of this notice Information relating to the current location, sale, installation, movement, consignment, storage and / or destruction of each and every machine identified and included in SCHEDULE - A of this notice

100. The Authority accepts, as alleged in paragraph 54 of the Complaint, that Mr Layden’s response to this

Notice included two tax invoices numbered 421 and 417, copies of which are at Exhibit E27. These

were issued by Better Returns to a business named “Aumaas Dooel”, whose address is identified as:

2 Belgradska Gevgelija 1480 R. Macedonia

101. Invoice number 421 was issued on 14 December 2016 totalling $17,500 for “10 x Shuffle Master

Equinox poker machines @ $1,750.00 each” while Invoice number 417 was issued on 9 November

2016 totalling $164,340 for “33 x Ainsworth A560 poker machines @ $4980.00 each”.

102. At paragraph 56 of the Complaint, the Complainant alleges that Mr Layden’s response to the Notice, in

relation to these tax invoices, identified that whilst the gaming machines were sold to a company

based in Macedonia, the actual shipment of these machines was destined for Columbia. The Authority

notes that the statutory declaration signed and dated 13 June 2017 at Exhibit E28 relied upon in

support of this allegation includes a copy of Schedule A to the Notice provided at Exhibit E26 with the

following 18 gaming machine serial numbers highlighted and a hand written message stating “These

machines were a part of 2 deliveries that went to Columbia. Invoices attached”:

• XAR121371

• XAR121372

• XAR121374

• XAR124684

• XAR124889

• XAR124890

• XAR124891

• XAR125037

• XAR125589

• XAR125590

• XAR127740

• XAR127741

• XAR128213

• XAR131180


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• XAR133344

• XAR133481

• XAR133799

• XSG804893

103. The Authority is satisfied, on the basis of this material, that Mr Layden in fact consigned/moved the

above 18 listed gaming machines to a location outside of the State of NSW and overseas, specifically

Colombia.

Failure to Notify the Authority and Manufacturer of Consignment/Movement Outside NSW

104. The Authority accepts the contention in paragraph 57 of the Complaint that during discussions with

LGNSW inspectors regarding the sale of gaming machines overseas, Mr Layden indicated that he had

not completed the required notifications, claiming that he usually completed these transactions

through a third party. The LGNSW File Note at Exhibit E38 of the Complaint (“LGNSW File Note”)

indicates that on 21 June 2017 LGNSW Inspector (identified as “AV” in the following extract) made a

phone call to Layden in regards to the consignment of gaming machines overseas. The LGNSW File

Note records the following:

AV "Justin I just need to make some queries in relation to machines being moved overseas given it was included in your previous submission under s. 21"

JL ''that's ok" AV "What documentation do you send to notify the authority that the machines are moving

overseas, or do you have an exemption to section 79 of the gaming machines act, do you know if you have one"

JL "not to my knowledge do I have an exemption, and no I didn't notify the authority that I was sending gaming machines overseas"

AV "ok no worries obviously this is the first time this has come up during this investigation as you included it in your s.21 submission"

JL ''that's ok, I only ever try to do the right thing so I'm hoping I have. I normally do these things through a third party as the people who purchase the machines call up all the time to ask for replacement parts. Im not really in a position to help them as I have no parts so its easier for me to do it through a third party, though in these cases I sold them myself”

105. The Authority accepts, as alleged in paragraph 58 and evidenced by Exhibit E40, that a search of the

relevant systems and records available to LGNSW inspectors failed to identify any exemption to this

requirement provided by section 79(3) in respect of Mr Layden.

106. The Complainant further contends at paragraph 59 that the total value of financial benefit received

from the sale of machines to the overseas company Aumaas Dooel, as identified within the bank

statements between 1 January 2016 and 11 April 2017, was $222,260.00. The Authority accepts this

on the basis of the CBA Bank Statements recording credits into the Better Returns account from

Aumaas Dooel, which, as set out above, total $222,260.00.

107. The Authority is satisfied that Mr Layden failed to provide a written notice to the Authority and

manufacturer in the form required by section 79(2) of the Act, no later than 7 clear days before the

consignment or movement, or within such other time as approved by the Authority.

These Gaming Machines Were “Approved” Machines At Relevant Times

108. The Authority notes the provisions regarding “approved” gaming machines discussed in Ground 1

Particular 1 above and the information provided by the Complainant dated 29 March 2019 and 24 April

2019. In the absence of any indication that these 18 gaming machines ceased to hold this status, the

Authority finds that during 2016 and 2017, at the time of consignment or movement outside of NSW,

these machines were approved gaming machines.

Mr Layden’s Submission and Conclusion

109. In the Respondent Submission, Mr Layden “admits that the offshore consignment of those machines

occurred without the requisite notice and that this was due to a failure on his part to appreciate the

need for the relevant notices to be given”.

110. On this basis, the Authority is satisfied that Mr Layden, whilst the licensee of a gaming related licence,

contravened section 79(1) of the Act for consigning or moving 18 approved gaming machines (listed in


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paragraph 101 above) to a place outside the State and failing to give the Authority and the

manufacturer a written notification stating the particulars required by this section no later than 7 clear

days before the consignment or movement or within such other time as approved by the Authority.



112. Ground 1 Particular 4 alleges that during March 2017 Mr Layden contravened section 80(4) of the Act

by obtaining an advantage for himself or another through a fraudulent representation, scheme or

practice in connection with two approved gaming machines on the premises of Hornsby RSL.

113. Section 80(4) of the Act states:

(4) A person who, in connection with an approved gaming machine in a hotel or on the premises of a club: (a) by any fraudulent representation, or (b) by a fraudulent scheme or practice, or (c) by the fraudulent use of the approved gaming machine or any other thing, obtains for himself or herself or another person, or induces a person to deliver, give or credit to him or her or another person, any money, benefit, advantage, valuable consideration or security, is guilty of an offence.

114. The Authority accepts the contention in paragraph 66 of the Complaint that is evidenced in email

correspondence at Exhibit E29, that on 10 March 2017 Mr Layden emailed Mr Mario Machado,

Secretary of Hornsby RSL, stating “I just got in a 5 station vegas star mojo system with the wide

screens. Currently has roulette on it but I can upgrade it to have up to 4 games. If this is of interest to

you, please let me know”.

115. At paragraph 67 of the Complaint, the Complainant contends that on 14 March 2017, Mr Machado

contacted Hornsby RSL’s Gaming Manager, Ms Sue Backhouse asking her to make enquiries

regarding pricing with Mr Layden. Hornsby RSL was only interested in two of these machines.

116. This is established by paragraph 5 of Ms Backhouse’s Witness Statement dated 19 April 2017 at

Exhibit E30 (“Backhouse Statement”) where she states that on 14 March 2017 Mr Machado

“forwarded me an email offering a five station Vegas Star Mojo system for sale. As we were interested

in purchasing an additional two (2) Mojo’s with our unused entitlements I contacted Justin Layden

(Bestnet)”.

117. The Authority further accepts, as contended at paragraph 68, on the basis of Tax Invoice 342, that on

23 March 2017 Better Returns invoiced Hornsby RSL for “2 x Shuffle Master Mojo roulette consoles @

XSG 306202, XSG306203” for a total of $22,000 (inclusive of GST).

118. At paragraph 69 of the Complaint it is contended that gaming machines purchased from Mr Layden

were due to be installed at Hornsby RSL by way of an extension of an existing station of gaming

machines. As such, the new machines required the same game software as the existing machines in

order to operate with them.

119. The Authority accepts this contention noting Mr Layden’s statement at question 58 of the Layden

Interview that these two machines were “part of a Mojo machine to be installed at Hornsby RSL” to be

added to the existing “multi terminal” system and that they “all have to have exactly the same

software”.

120. The Authority further accepts, as alleged at paragraph 70, on the basis of the Witness Statement of Mr

Nathan Storey (the Manufacturer’s Sales Executive) dated 14 June 2017 at Exhibit E32 (“Storey

Statement”), that on 24 March 2017 Mr Layden, in the company of Ms Backhouse, contacted Mr

Storey enquiring about the correct game software to ensure that the two new machines were

compatible with the existing multi terminal system at Hornsby RSL. Paragraph 6 of the Storey

Statement reads:

On the 24 March 2017 I had a conversation with Mrs Sue Backhouse who advised that she was in the company of Mr Justin Layden at Hornsby RSL. To the best of my recollection, or word to that effect, the conversation went as follows:


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Backhouse said "Hi Nathan, I'm here with Justin it's about the gaming machines I'll put you onto him". Layden said "Hi Nathan, Just want to confirm whether the software is compatible with what is

installed at Hornsby RSL'' I said "If you can send me the serial numbers I can look them up and tell you what you

have and what you will be needing."

121. Paragraph 70 of the Complaint further contends that Mr Layden provided Mr Storey with the serial

numbers XSG306202 and XSG306203 to verify whether the proposed gaming machines had the

correct software already installed. Paragraph 7 of the Storey Statement establishes that on 24 March

2017 Mr Layden sent a text message to Mr Storey referring to gaming machines XSG306202 and

XSG306203, asking “Is the software compatible for Hornsby”.

122. The Authority also accepts the Complainant’s contentions at paragraph 71 that Mr Storey identified

that the software present in the gaming machines was not compatible with the existing machines

installed at Hornsby RSL and that Storey provided Layden with the correct software (35.E0021) to

ensure that the new gaming machines were compatible with the system. Paragraph 9 of the Storey

Statement states:

I then looked up the SG Gaming records for Hornsby RSL and ascertained that the current approved software in place for Hornsby RSL was Roulette version 35.E0021. I then responded to Mr Layden via SMS text as follows: I SMS text replied Hi mate, the software we have on record for being in the machines is multi

game software. Hornsby require Roulette version 35.E0021.

123. Paragraph 72 of the Complaint contends that at 10:24 am on 24 March 2017, Mr Layden requested

Mr Storey to provide serial numbers of gaming machines that were already installed within the venue.

Mr Storey replied with a single number - XSG305539. In reply to a subsequent text message from

Layden requesting the two serial numbers, Mr Storey advised XSG305537 and XSG305538.

124. Paragraph 10 of the Storey Statement states that at 10:24 am on 24 March 2017 Storey received a

voice mail message from Mr Layden stating: “I need to do the Quickchange can you send them

through”. Mr Storey provides the following account of an SMS text exchange, supported by

screenshots from Storey’s mobile phone (Exhibit 2 to the Storey Statement):

I SMS text responded “XSG305539” Layden SMS text replied “U got 2?” I SMS text replied “XSG305537, XSG305538” Layden SMS text replied [Thumbs up emoji] followed by [two beers clinking emoji] and “4u”.

125. The Authority notes that Quickchange Authorisation Report for application number 265153, at Exhibit

E05, establishes that gaming machines XSG306202 and XSG306203 were recorded as authorised on

the system for installation at Hornsby RSL on 29 March 2017.

126. The Complainant further contends at paragraph 73 of the Complaint that at 4:01 pm on 24 March

2017 Mr Allam contacted the Manufacturer to request the provision of specific game software and

parts stating “… Flashcard game roulette for machine XSG305537 and XSG305538…Roulette game

ver 35.E0021”.

127. These contentions are established by Exhibit 10 to the Witness Statement of the Manufacturer’s

Company Director and Secretary, Mr Adrian Halpenny dated 31 March 2017 at Exhibit E04 (“Halpenny

Statement”). This statement includes an email dated 24 March 2017 at 4:01 pm, when Allam emailed

the Manufacturer as follows:

CAN I ORDER SPACER FOR MOJO MACHINE 2X119/000021 AND FLASHCARD GAME ROULLET FOR MACHINE XSG305537 XSG305538 ROULLET GAME VER 35.E0021

128. At paragraph 74 of the Complaint, it is contended that during the First Allam interview, Mr Allam

identified serial numbers XSG305537 and XSG305538 as the machines that were delivered to


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Hornsby RSL, with Allam later amending his comments to identify XSG306202 and XSG306203. This

is evident from Mr Allam’s responses to questions 87 to 90 of the First Allam Interview:

Q87 Yes. And do you believe that's a tax invoice for the two machines that you dropped off at Hornsby RSL yesterday?

A Yes. I believe because the number, can be sure, second. The number is 3-0-5-5-3-7. Q88 Just speak up, sir. A 3-0-5-5-3-7 and 3-0-5-5-3-8. Q89 Uh, no. They're, do you agree that that's different numbers to what's on the receipt? So - - - A Ah - - - Q89 - - - what are, what are those machines? Who, where did those machines come from? A No, honestly, they're the ones. Actually 3-0-6-2-0-3. Q90 Yes. A And X-S-G-3-0-6-2-0-2.

129. The Authority further accepts the contention in paragraph 75 of the Complaint that the Manufacturer

refused Mr Allam’s request for these gaming machine parts (software) by reason that Allam was not

the holder of a valid gaming machine seller’s licence. An internal email exchange among staff of the

Manufacturer on 27 March 2017 that is Exhibit 10 to the Halpenny Statement records that the

Manufacturer was:

“unable to process this application as a Technicians Licence does not qualify as an appropriate buyer of gaming machines (Including subsidiary equipment)”.

130. The Authority also accepts the contention in paragraph 76 of the Complaint that Mr Layden contacted

Ms Backhouse to inform her that he was unable to arrange the parts required and that installation

would need to be delayed. Paragraph 9 of the Backhouse Statement recounts Mr Layden telephoning

her to this effect on 28 March 2017.

131. At paragraph 76 of the Complaint, the Complainant contends that at no point did Mr Layden attempt to

source the parts himself - relying solely upon Allam to complete the task.

132. At paragraph 77, the Complainant contends that Ms Backhouse made enquiries with Mr Storey and

asked that he arrange for the game software to be supplied. The Authority notes that this is supported

by paragraph 10 of the Backhouse Statement, which states:

On 30th March 2017 Nathan Storey came out to see me and told me that Mojos we had were older software and no longer available. He told me they would supply the latest software for the two (2) Mojos from Bestnet for a cost of $3,500 each and that they would upgrade our existing Mojos to the latest software free of charge. With Nathan present I rang Justin and told him what Nathan had offered. We all agreed to proceed with install on 11 April 2017.

133. The Authority further accepts, as contended at this part of the Complaint, that Mr Storey accessed the

Manufacturer’s internal systems and provided a sales order to Ms Backhouse, specifying the upgrade

of existing terminals to the latest game software, for a total price of $7,700.00 including GST. This is

evidenced by the SG Gaming ANZ Pty Ltd customer order ORD-21542-P1N9N4 dated 30 March 2017

at Exhibit E33 (“SG Gaming Customer Order”), which specifically mentions serial numbers

“XSG306202-03”.

134. At paragraph 78 of the Complaint, it is contended that following enquiries by LGNSW inspectors into

the movement of gaming machines XSG306202 and XSG306203, subsequent system related

enquiries concerning three other machines XSG306204, XSG306205 and XSG306206 indicated that

they were scheduled to be installed at the Richmond Club on a date yet to be determined.

135. At paragraph 79 of the Complaint, the Complainant contends that subsequent information provided to

inspectors by staff at the Richmond Club in response to a Notice to Produce issued on 27 April 2017

revealed that Richmond Club’s Gaming Manager, Mr Craig Hodge and Mr Layden corresponded

about entering into an agreement for that club to purchase three multi-terminal gaming machines for a

price of $15,000 each, excluding GST.

136. A copy of that Notice to Produce is in evidence at Exhibit E34. Attached to a written submission letter

from Mr Hodge dated 1 May 2017 at Exhibit E35 (“Richmond Club Submission”) is an email from

Layden to Hodge dated 1 March 2017 which states:


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As discussed, I am pleased to offer the Richmond Club, the following poker machines. 3 X Shufflemaster Mojo Vegas Star Roulette machines, with wide screens@ $15,000.00 each $45,000.00 2 x IGT Neon Poker machines Champion series black @ $6,000.00 each $12,000.00 4 x Aristocrat 19 inch veridian poker machines, Money train multi game @ $7,000.00 each $28,000.00 Total $85,000.00 Price includes installation and excludes GST.

137. At paragraph 80 of the Complaint, the Complainant contends that the sale of these three machines

from Mr Layden to Richmond Club had not yet been finalised prior to their seizure by LGNSW on 11

April 2017, but Mr Layden told LGNSW inspectors that he believed that sale was “imminent” and had

instructed Allam to transport the machines to this club.

138. Questions 168 to 187 of the Layden Interview supports the contention that these machines were going

to be installed at the Richmond Club on the day of the seizure stating:

Q168 What happened to the other three? A They have been agreed to go to another club. Another club wanted to buy three. Q169 O.K. Which club was that? A The Richmond Club. Q170 Type of club? A community club? A RSL. Q171 RSL. A Yeah, yeah. I think it's just called the Richmond Club, but, yeah. Or Club Richmond or - - - Q172 Yep. All right. So who arranged that sale? A Me. Q173 When? A Oh, ten days ago I suppose. Q174 O.K. A So we haven't, we haven't um, delivered or installed. We were going to deliver because they

were going to install them today um, because again, they're adding to a system, they had to get some cabling done to get that done. Um, there's wasn't as easy to do as Hornsby. So they needed to get some additional cabling in and some machines moved to allow for the space.

Q175 Ah hmm. A So um, yeah, the intention was to have them there and install today. Q176 O.K. So who do you deal with at Richmond? A Craig Hodge. Q177 And your relationship with Craig? A He's the Operations Manager at the club. Q178 So a business relationship. A A business relationship, yep. Q179 Yep. A He used to work for me. Um, but he's been, you know, he's been in, he's left me

years and years ago. He just didn't want to, he wanted to back working in clubs - - - Q180 Ah hmm. A - - - so he’s been doing this for years. Q181 All right. So again was there any Quickchange - - - A No. Q181 - - - prepared in relation to these? A No, no, there wasn't. Q182 So if they were to be installed today - - - A Today, yeah, we would have done the Quickchange either today or yesterday. Q183 O.K. So you obviously negotiated the price with the club. A Correct. Q184 Was there any invoice or anything in place? A No, nothing, nothing has gone out because nothing's been delivered at all. Q185 O.K. All right. I'll show you another, it's a document labelled J-L-0-0-7, it comprises (1), (2)

and (3). So it's three pages. A Yep. Q186 Can you just have a look at that for me? A Yep. Q187 And just describe what that shows? A Yep. That's three Vegas Star units that um, they're the right serial numbers. They would have

been going to Richmond Club.


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139. Questions 137 to 155 of the First Allam Interview satisfy the Authority that on the morning of 11 April

2017 Mr Allam under Mr Layden’s instruction was transporting the said three machines to the

Richmond Club:

Q137 So do you agree that you spoke to me earlier this morning on the telephone? A Yes. Q138 Do you agree that you said that you were on your way to Richmond RSL? A Yes. Q139 And did you go to Richmond RSL? A Yes. Q140 Who did you speak to there? A No. I spoke to Justin and he said for me, uh, there's something wrong with the machine and,

uh, I said to him, yes, Paul from ..... (00.23.37) just rang me and tell me ..... (00.23.41) in Hornsby from our store. And, uh, they want to see me and, uh, because we cannot delivery anymore to Hornsby. I rang, I rang you - - -

Q141 Yes. A - - - and I said for you, "I'm going to turn back and then meet you here”. Q142 Where were you going when you spoke to me this morning? A To Richmond RSL. Q143 And who were you speaking to there? A Uh, they told me to, when I arrive there, to ring, there's a guy's name, Chris. Uh, he told me

where to put it because they decide to put it in storage and when, uh, could be, I usually deal, it could be someone or Aristocrat coming to install.

Q144 So was, was Chris at Richmond RSL going to buy the other three machines? A I have no idea. Q145 How many machines were you - - - A Three. Q145 - - - going to deliver to him? A They are on the truck. Q146 They're on the truck? A I, I got delivery forms, three of them, all right, and two of those I usually take. Q147 Are they the same machines as you delivered to Hornsby RSL? A The three roulette, yes. Q148 They're the same type of multi terminal gaming machine - - - A Yes. Q148 - - - are they? A That's right, yes, that's right, yes. Q149 And how much was the club going to pay you for them? A No, don't, don't say that, how much they sell to me. I cannot sell it, you know, people take it

from me, yeah, and they sell it by themselves. Q150 So who made the arrangements to sell the machine? A Justin Q151 Justin? A Yeah. Q152 So did he make those arrangements with Chris from Richmond RSL? A Yeah. He send, he send me there, and said delivery this machine to Richmond and he send

me the message and no worry about install. Just deliver there and they're going to take care about everything. That's why I went by myself.

Q153 And you had the serial numbers of those machines we just found? A Yeah, yes. Q154 Have a look at those? We'll just confirm the serial numbers on those - - - A Yeah. Q154 - - - the three machines in the back of your truck just here. A Yep. Q155 Thank you. A The machines there would be X-S-G-3-0-6-2-0-4. X-S-G-3-0-6-2-0-6. X-S-G-3-0-6-2-0-5. And

the other two X-G-T-6-6-6-7-1-9, black and X-S, X-G-T-6-6-6-5-0-5, red. They're the two other machines I usually take.

140. The Authority accepts as contended in paragraph 81 of the Complaint, on the basis of the Richmond

Club Submission, that Mr Hodge advised inspectors that he had not entered into any such agreement

to purchase the gaming machines. He stated:

1. In relation to the correspondence between Richmond Club and Mr Justin Layden there was two written quotations both containing three (3) MTGM terminals (no serial numbers supplied). Regarding the machines XSG306204, XSG306205 and XSG306206 both the original and the amended quote supplied by Mr Justin Paul Layden did not specify any serial numbers and the quotes differed with machines to be supplied, pricing and payment terms. While discussions had taken place between myself and the Group


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CEO Ms Kimberley Talbot about bringing machines from storage back onto the Gaming floor and additional machine purchases, quotes from Mr Justin Paul Layden and Aristocrat had not been finalised. (Quotes attached - emails) … 3. In relations to all records between Richmond Club (and Its employees) and Mr Justin Paul Layden apart from the quotations there was a verbal conversation regarding the payment terms, possible installation dates as there was time required by Richmond Club for machine moves (arranging of moves to fit with Richmond Club's Service provider IGT) to create space on the Gaming floor for the MTGM's and additional machines. Richmond Club also required the club electricians to get data and power ready for an install. Thus no Quickchange draft was even prepared as there was no install date confirmed and again there were no serial numbers nominated.

141. At paragraph 82 of the Complaint, the Complainant contends that Layden indicated in the Layden

Interview that he was able to receive an advantage over his competitors by being able to offer the

same product at a cheaper price. The Authority accepts that Layden’s response to question 70 of the

Layden Interview indicates that Mr Layden was aware that he could offer the product at a cheaper

price:

…And he said, "I got a five station system. Um, if you want to sell it, see if you can sell it." So I looked at it. He cleaned it up, fired it up, made sure it was all working properly. And at that stage I offered it to some people to sell. Um, I've got a lot of contacts in the pubs and clubs and this is obviously a club product only. Um, I've got no idea of who may want that sort of product. Brand new it's twenty five thousand, so if you can supply it to someone and at a cheaper price, the customer wouldn't know, it looks exactly the same. It's a good saving for whoever's buying it. So I, basically Mario agreed to buy two of those units.

142. At paragraph 83 of the Complaint, the Complainant contends that Layden did not receive a financial

payment for the gaming machines as the payment process was interrupted following the intervention

of LGNSW to mitigate any risk to the club. However, the Complainant contends that Mr Layden had

entered into a contract with that club to receive payment following the successful installation of the

machines. The Authority accepts the Complainant’s contentions in paragraph 83 on the basis of the

email correspondence at Exhibit E29 of the Complaint in which Ms Backhouse emailed LGNSW

inspectors on 6 April 2017 stating:

Justin rang me yesterday and said that he was unable to get the infills for the machines that I need and that if I order them from Scientific Games he would pay for them. I said I would speak to Nathan. Justin asked about payment and I told him we would deposit the cheque in his account after the machines were installed. He was OK with that. The machines will be here on Tuesday 11/4/17 at 7am. I did ring you yesterday and left a message on your answering machine. Please give me a ring to let me know what time you will be on site.

143. At paragraph 84 of the Complaint, the Complainant contends that it is unclear as to how Mr Allam

apparently came into possession of the serial numbers he provided to the Manufacturer. It is asserted

by the Complainant that Mr Layden provided those serial numbers to Mr Allam for the sole purpose of

securing game software from the Manufacturer without identifying the actual approved gaming

machines that the game software was due to be installed into. The Complainant contends that the

plan was to minimise detection of the actual serial numbers of the machines by the Manufacturer. The

Complainant contends that on the balance of probability, that conduct was part of a joint enterprise

that was deceptive.

144. The Authority accepts the contention in paragraph 85 of the Complaint that on 30 March 2017 an

internal investigation ensued upon the Manufacturer becoming aware that gaming machines

XSG306202 and XSG306203 that were specified in the SG Gaming Customer Order had previously

been transported for destruction. This is established by Paragraphs 5 through 13 of the Halpenny

Statement.

145. At paragraph 88 of the Complaint, the Complainant contends that Mr Layden requested that Mr Storey

provide him with the serial numbers of gaming machines (XSG305537 and XSG305538) already

installed within the venue to assist in accessing the correct software. Given he had been provided with

the identification of the correct software already, Mr Layden did not require the additional serial

numbers to arrange the purchase of the software. At paragraph 89 of the Complaint, the Complainant

contends that under the apparent instruction of Mr Layden, Allam used those serial numbers to


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request parts for the gaming machines (XSG305537 and XSG305538) already in the venue rather

than for the gaming machines scheduled to be installed (XSG306202 and XSG306203).

146. The Authority does not accept that there is direct evidence before it to establish that Mr Allam’s

actions, in regards to using gaming machine serial numbers XSG305537 and XSG305538 when

contacting the Manufacturer, were under Mr Layden’s instruction.

147. At paragraph 90 of the Complaint, the Complainant contends that at the point that Mr Layden was

provided the correct software required to make the gaming machines compatible, he had the required

information to proceed with the parts request. At paragraph 91 of the Complaint, the Complainant

contends that the action of initially receiving an additional serial number (XSG305539) and then

requesting two serial numbers (XSG305537 and XSG305538) suggests that Mr Layden was aware

that he needed to provide the serial numbers of the gaming machines requiring new software. The

Complainant contends at paragraph 92 of the Complaint that if the intention was to provide a

comparative gaming machine to access the correct software, then one serial number (such as the

originally provided XSG305539) would have sufficed.

148. The Complainant further asserts at paragraph 93 of the Complaint that the alleged false

representation of gaming machine serial numbers by Mr Allam under the apparent instruction from Mr

Layden was a deceptive act by both parties in concert with the intent to avoid detection from the

internal systems of the Manufacturer and install and thereby legitimize machines that would otherwise

not be authorised. The Complainant contends at paragraph 94 of the Complaint that this is confirmed

when Mr Storey arranged the purchase of software under instruction from Ms Backhouse for gaming

machines XSG306202 and XSG306203 and the internal systems of the Manufacturer alerted staff to

their 'destroyed' status.

149. At paragraph 95 of the Complaint, the Complainant notes the actions of Mr Layden on 11 April 2017

when the gaming machines were due to be installed at Hornsby RSL and the remaining three gaming

machines were moved to the Richmond Club. The Complainant contends that given no fixed

agreement existed between Mr Layden and the Richmond Club, the need to move the gaming

machines on this day was done without any clear or legitimate motive. It is asserted by the

Complainant that Mr Layden and Mr Allam were attempting to temporarily dispossess those machines

to reduce the risk of them being detected.

Mr Layden’s Submission 150. In making a finding on Ground 1 Particular 4 the Authority has had regard to Mr Layden’s submissions

in the Respondent Submission contending that the allegation is “wholly misconceived”.

151. The Authority notes the following was provided by the Complainant in the Response to Particulars

14. The complainant relies on the complaint material including paragraphs 84 - 93. It is alleged that Mr Layden, through his representative Mr Allam, falsely represented to SG Gaming ANZ Pty Ltd the serial numbers of gaming machines already installed at Hornsby RSL Club instead of the actual serial numbers of the machines scheduled for installation. It is further contended that in doing so, Mr Layden sought to circumvent SG's internal controls and thereby obtain necessary gaming machine software to facilitate the installation and sale of the subject machines. The complainant maintains that the above conduct and related request for gaming machine software was completed by Mr Allam under instructions from Mr Layden who obtained those serial number by a text message from SG (refer to paragraphs 70 - 73 of the complaint). It is asserted that Mr Layden then provided those serial numbers to Mr Allam for the purposes of obtaining the software. It is further maintained that this scheme avoided detection until such time as the Club provided the correct serial numbers to SG Gaming's sales representative Mr Nathan Storey, who then attached them to the software/parts request. At this time, SG Gaming established the true provenance of the gaming machines due for installation at the Club, which formed the basis of SG's original report to L&GNSW.

15. The complainant relies on the detailed response provided above under point 14 of this letter. 16. The complainant maintains that Mr Layden, in concert with Mr Allam, was aware of the true

provenance of the gaming machines at all relevant times. This scheme involved the resale of gaming machines, previously intended for destruction by SG Gaming, to NSW licensed venues.

17. The complainant contends that the "scheme" that included the rebirth of previously disposed gaming machines involved:


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a) The unlawful purchase of those gaming machines (destined for destruction) by Mr Allam from Mr Habib Kayrouz; and

b) The unlawful purchase of the same gaming machines by Mr Layden from Mr Allam; and c) The sale of those gaming machines by Mr Layden to NSW licensed venues; and d) The false representation by both Mr Allam and Mr Layden to SG Gaming to obtain gaming

software to facilitate installation and sale The complainant contends that the actions of Mr Layden in buying the gaming machines from Mr Allam and then selling them to NSW licensed venues, together with his apparent attempts to falsely legitimise their movement, are acts attributable to Mr Layden in the asserted scheme.

18. The complainant does not rely on s. 80(4)(c) being the fraudulent use of an approved gaming machine in making the complaint. The complaint presses s.80(4)(a) and s.80(4}(b) of the Act.

152. In the Respondent Submission, Mr Layden refers to paragraphs 16 to 18 of the Response to

Particulars (extracted above) to support the contention that the Complainant sought to widen the terms

of the Complaint to allege a broader knowledge on the part of Mr Layden and some form of broader

conspiracy.

153. Mr Layden submits that these are “serious allegations” that were not put to him in his interview stating

that they are “expressly denied” and there is “not a shred of evidence to support any of them”. Mr

Layden contends that there is no evidence to support the assertion that Mr Layden knew of the true

provenance of the relevant machines and that neither Messrs Allam or Faycal implicate Layden in Mr

Allam’s acquisition of the machines or suggest any knowledge on his part as to how they came to be

in Allam’s possession.

154. Mr Layden contends that the “commercial context does not accord with any aspect” of this

“conspiracy”.

155. Mr Layden in the Respondent Submission contends that the premise of the allegation that Mr Layden

sought to deceive the Manufacturer as regards the new machines he was selling to Hornsby RSL “is

not born out by the facts”. Layden contends that the conduct of him providing Mr Storey with the serial

numbers of the two machines that he proposed to sell as early as 23 March 2017 and Mr Storey

looking up the Manufacturer’s records for Hornsby RSL is “wholly inconsistent with Mr Layden seeking

to deceive anyone, but particularly SG, about the provenance of the machines”.

156. Mr Layden contends that the information provided on 23 March 2017 would have enabled Mr Storey,

at that time, to identify that the two machines were part of the 2016 consignment that was to have

been destroyed. Layden contends that there is no explanation from Mr Storey as to why he was not

then able to ascertain where these machines had come from as he and the Manufacturer were able to

do a week later. Mr Layden contends that the only conclusion reasonably open is that on receipt of

that information on 23 March 2017 Mr Storey and the Manufacturer were in a position to ascertain that

the serial numbers related to machines that ought to have been destroyed (but were not) yet did not

do so.

157. It is submitted by Mr Layden in the Respondent Submission that if Mr Layden was part of the alleged

conspiracy or scheme, it would be “absurd for him to give identifying information to the very party, ie

SG, that would have enable the plan to be detected”.

158. Mr Layden also submits that his responses to questions 58, 73 and 74 of the Layden Interview explain

that after Hornsby RSL agreed to buy two of the vegas star machines, there was a software issue

arising out of the fact that the machines in question need to have the same software as the other

machines. Mr Layden refers to the Backhouse Statement and the text message exchange between Mr

Storey and Mr Layden on the 23 and 24 March 2017 in support of this.

159. Mr Layden contends that the reason why Mr Allam gave the numbers for the existing machines was

“entirely innocent and related to the fact that the software for Hornsby's existing machines older, no

longer available and needed upgrading”. Mr Layden refers to paragraphs 9 and 10 of the Backhouse

Statement in support of this contention.

160. Mr Layden contends that such conduct is “hardly consistent with the allegation that Mr [Layden] was

seeking to secure game software from SG without identifying the actual machines that he proposed to

sell”.


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161. Mr Layden further submits that even if the facts were as alleged, they do not amount to conduct that

would breach subsection 80(4). Layden submits that sub-sections 80(4)(a) and (b) relevantly prohibit

the gaining of a benefit by reason of fraudulent representations, schemes or practices in connection

with a gaming machine in a hotel or on the premises of a club. Mr Layden contends that the allegation

here is not made in connection with a "gaming machine in a hotel or on the premises of a club", that

there was no "fraud" in the sense that the Act speaks of, concerning the way in a machine operates in

a hotel or club and that the machines in question were never installed and there is no suggestion that

they were modified in a manner that involved cheating or interference.

162. Mr Layden submits that the fraud allegation is insufficiently particularised in that it fails to identify a

particular representation, scheme or practice by Mr Layden that is said to give rise to the cheating and

unlawful interference allegation. Mr Layden submits that taking the Complainant’s case at its highest,

ie that Mr Allam gave false machine numbers (as opposed to the true number of the incoming

machines) to avoid detection, the Authority could not conclude that this was part of a scheme

particularly given Mr Layden provided Mr Storey with the serial numbers in any event.

The Complainant’s Reply

163. The Authority has considered the above submissions alongside the Complainant Reply Submission. In

the Complainant Reply Submission, the Complainant rejects Mr Layden’s submission that the terms of

the Complaint were widened and submits that the allegations of re-birth, unlawful purchases, the

subsequent sale of the machines by Mr Layden to NSW licensed venues and the false representation

are all within the allegations and facts as contained in the original Complaint and are supported by

evidence.

164. The Complainant does not accept the proposition of Mr Layden not knowing anything about the

provenance of the gaming machines he sourced from Mr Allam. The Complainant re-iterates that in all

the circumstances Mr Layden knew, or ought to have known the provenance of these machines; in

that, in his appropriate, responsible and diligent conduct as a licensee, Mr Layden should have

engaged in due diligence and made inquiries; and/or he should not have shut his eyes in such

suspicious circumstances. The Complainant alleges that there was a “wilful blindness” by Mr Layden,

or he was "wilfully unaware or ambivalent”.

165. The Complainant contends that in respect of the actions taken by Mr Storey and subsequently the

Manufacturer, the initial request by Mr Layden required that Mr Storey identify the game software

available in the machines. This inquiry by Mr Layden to Mr Storey only required the review of specific

information as requested on the Manufacturer’s internal systems. The Complainant contends that

upon the request of Hornsby RSL for Mr Storey to source the correct software (to which Mr Allam and

by extension Mr Layden were denied), the system required that Mr Storey process a transaction

against those machines in the Manufacturer’s internal systems. It was that transaction that ultimately

resulted in the gaming machines being identified and a complaint then raised by the Manufacturer to

LGNSW.

166. The Complainant contends that this was caused by the involvement of Ms Backhouse from Hornsby

RSL, and the fact that there was an unanticipated software cost of $7,000. The existing software for

the three Mojo gaming machines already installed at the club would not operate for the two further

Mojo machines Mr Layden was supplying. The Complainant contends that this subsequently elevated

the transaction to formal channels with a $7,000 customer order from the Manufacturer to the club for

the software.

167. The Complainant contends that the actions to have this sale go through using existing software and

existing machine serial numbers was impeded by incompatible software, an unanticipated $7,000 fee

and Mr Allam's lack of a seller's licence. This elevated the transaction to a formal process and formal

Manufacturer involvement, which then detected the fact that the two machines Mr Layden was selling

to Hornsby RSL should have been destroyed.

168. The Complainant contends that given the status of the gaming machines and the need to source

appropriate game software, it would be required that Mr Layden attempt to source that software from


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the Manufacturer. The Complainant re-iterates what was indicated in the Complaint stating that Mr

Allam provided false information to the Manufacturer that on the balance of probabilities was provided

to him by Mr Layden. That information included the serial numbers of machines already installed,

XSG305537 and XSG305538 instead of the actual gaming machines to be installed, XSG306202 and

XSG306203. That request was subsequently denied by the Manufacturer. The Complainant contends

that the actual request for these parts, of which the two correct serial numbers were used by the

Manufacturer, was formally initiated by Ms Backhouse of Hornsby RSL and not Mr Layden or Mr

Allam.

169. The Complainant contends that whilst Mr Layden did provide those serial numbers to Mr Storey to

assess the correct software, he never provided those serial numbers within a formal process, such as

a request for parts. In that instance, Mr Allam provided the incorrect serial numbers.

170. The Complainant contends that Mr Allam at the time of his request had no information to suggest the

existing machines required updated software and as such your assertion that he provided those serial

numbers "entirely innocently" cannot be sustained.

Conclusion

171. The Complainant’s case, as summarised in paragraph 95 of the Complaint, is that Mr Layden

contravened section 80(4) by “way of a fraudulent representation and/or practice by falsely and

knowingly representing to the Manufacturer and the Club that certain authorised gaming machines (by

way of providing the serial numbers of other authorised machines) were being installed at the Club

when in fact it was his intent to install unauthorised machines at the Club, thereby either inducing a

person to give him money, or obtaining an advantage, to wit, the promotion and furtherance of his

business interests and reputation within the industry as an attractive source of cheap gaming

machines”.

172. The relevant benefit or advantage from this misrepresentation is stated at paragraph 96 of the

Complaint where the Complainant contends that given the above conduct was interrupted by LGNSW

inspectors by alerting the Hornsby RSL to the alleged scheme, Mr Layden did not receive any

payment from Hornsby RSL though stood to receive payment in excess of $20,000 if LGNSW had not

intervened in said conduct.

173. The Authority is not satisfied that there is sufficient evidence or material before it to prove, taking due

care with respect to fact finding, that Mr Layden, in connection with an approved gaming machine on

the premises of a club, engaged in a fraudulent representation or fraudulent scheme. While the

conduct of Mr Layden and Mr Allam is somewhat curious, giving rise to a reasonable suspicion

warranting further investigation, there is insufficient evidence before the Authority to establish that any

person was actually misled by the conduct of Mr Layden with respect to gaming machines operating

on club premises, or to establish a discernible benefit or advantage flowing to Mr Layden or another

from that conduct.

174. The Authority is not satisfied that Mr Layden, whilst the licensee of a gaming related licence, has

contravened section 80(4) of the Act.

175. Ground 1 Particular 4 is not established.

Ground 2

176. Ground 2 is based on section 129(3)(e)(iv) of the Act and alleges that gaming related licensee, Mr

Layden, is no longer a fit and proper person to hold a gaming related licence.

177. Section 129(3)(e)(iv) of the Act states:

(3) The grounds on which a complaint in relation to a licensee or close associate may be made are as follows: … (e) that the gaming-related licensee:

… (iv) is no longer a fit and proper person to hold a gaming-related licence. …


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178. Ground 2 specifies two Particulars. Particular 1 relates to the honesty, knowledge and ability (integrity

and character) of Mr Layden and Particular 2 relates to Mr Layden’s knowledge and ability. The

Complainant contends in Particular 2 that the Particulars in Ground 1 demonstrate Mr Layden’s lack of

the requisite ability, knowledge and (to some degree) honesty required under the authorisation

granted to him by his licence and expected by the industry and community. In addition, Particular 2

specifies examples of how Mr Layden is said to have failed, during his interview with LGNSW

inspectors, to demonstrate sufficient knowledge of the Act and how it relates to his conduct and

responsibilities as a gaming related licensee.

Fitness and Propriety at General Law

179. It is well established at common law for the purposes of licensing that to be “fit and proper” a person

must have a requisite knowledge of the Act (or Acts) under which he or she is to be licensed and the

obligations and duties imposed thereby: Ex parte Meagher (1919) 36 WN 175 and Sakellis v Police

(1968) 88 WN (Pt 1) (NSW) 541. Being fit and proper normally comprises the three characteristics of

“honesty, knowledge and ability”: Hughes & Vale Pty Ltd v NSW (No 2) (1955) 93 CLR 127.

180. Where a person has been convicted of offences, the decision maker must consider the circumstances

of those convictions and the general reputation of the person apart from the convictions and the

likelihood of repetition – Clearihan v Registrar of Motor Vehicle Dealers in the ACT (1994) 117 FLR

455.

181. In Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321, the High Court of Australia has held

that:

The expression ‘fit and proper person’ standing alone, carries no precise meaning. It takes its meaning from its context, from the activities in which the person is or will be engaged and the ends to be served by those activities. The concept of ‘fit and proper’ cannot be entirely divorced from the conduct of the person who is or will be engaging in those activities. However, depending on the nature of those activities, the question may be whether improper conduct has occurred, whether it is likely to occur, whether it can be assumed that it will not occur, or whether the general community will have confidence that it will not occur. The list is not exhaustive but it does indicate that, in certain contexts, character (because it provides an indication of likely future conduct) or reputation (because it provides an indication of public perception as to likely future conduct) may be sufficient to ground a finding that a person is not fit and proper to undertake the activities in question.


Mr Layden and Mr Allam’s Relationship

182. The Complainant contends at paragraph 99 of the Complaint that information and records obtained

during the investigation indicate that Mr Layden and Mr Allam had an established and close business

relationship. At paragraph 100 it is contended that whilst the respective corporate entities operated by

Layden and Allam were independent, both businesses operated in concert and relied heavily upon

each other to source either technician's work for Mr Allam, or serviceable and marketable gaming

machines for Mr Layden, to sell into NSW licensed hotels and clubs.

183. The Complainant further contends at paragraph 101 that the business relationship had advanced to

the point that Mr Layden placed a significant level of trust in Mr Allam to not only complete the

required technician’s work but also provide safe storage for gaming machines that had been disposed

into Mr Layden's possession.

184. The Authority is satisfied, on the basis of the Tonita ASIC Extract, Bestnett Gaming ASIC Extract and

the Better Returns ASIC Extract that the two corporate entities are independent. Although the

Authority accepts that the two businesses worked in conjunction with each other, Mr Layden’s

responses to questions 280 to 282 in the Layden Interview indicate that the relationship between Mr

Layden and Mr Allam was not exclusive:

Q280 Do you have a similar relationship with someone else for the storage of product? A Um, no but I could. But at the moment I don't have machines stored with other people. Q281 O.K. So, so you do have relationships with other people that allow to you do that?


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A Other people do, other people do installs for me, yeah. Q282 O.K. A Yeah, so other people do it. It just depends on where I'm selling them to and that sort of stuff.

So, and sometimes when I'm buying, and like I've done a lot of licencing recently um, where I've bought a lot of entitlements and - - -

185. The Authority accepts, on the basis of Mr Layden’s responses to questions 307 to 313 of the Layden

Interview, that Mr Allam did provide storage for Mr Layden’s gaming machines:

Q307 O.K. You mentioned current storage of machines that you have. So you have them with Riad at the moment.

A Yep. Q308 How many would you say would be held by him? A Well I've got the twenty one that I bought off a hotel group recently. So there might be forty in

total that I have with him. Q309 O.K. And they're all held where? A At Chipping - - - Q310 Chipping Norton. A Yep. Q311 How are they identified that they're yours? A Oh, he'd have Justin written on them outside. He knows the serial plats. (sic) Q312 Yep. A He's got Quickchange documents of everything that he picks up on my behalf. Q313 Ah hmm. A So, yeah.

186. At paragraph 102 of the Complaint it is contended that Mr Layden admitted that within the first four

months of 2017 he attended the Chipping Norton Warehouse “on, eight or ten times since”. The

Authority accepts that questions 131 and 132 of the Layden Interview establish the following:

Q131 All right. So how many times have you been to these premises? A To Chipping Norton? Q132 Yeah. A Oh, maybe eight or ten since - - -

187. The Authority further accepts, as contended in paragraph 103 of the Complaint, that on the basis of Mr

Layden’s response to questions 112 and 113 of the Layden Interview, the relationship between

Layden and Allam was professional only, albeit one that had been in place for approximately 16 years

at the time of interview:

Q112 So it's a business relationship - - - A Yep. Q112 - - - or is there a personal relationship with him? A No. No, no, no, purely business. I don't know where he lives. I don't, I know he has a family

um, with a couple of kids. But I don't know what they do. I don't know anything. I've never been out for a family meal. He's never met my family. I've never met his. So, yeah.

Q113 All right. How long have you known Riad? A It'd be, I'm guessing, but it'd have to be at least sixteen years.

188. The Authority further accepts, as alleged in paragraph 104, on the basis of Layden’s response to

question 109 of the Layden Interview, that Layden believes that Mr Allam has a well established

reputation as a technician:

Well he's a, probably the best knowledge of poker machines in New South Wales. He knows all about the internal ways that they work, how to fix them, how to repair them. He knows everything about them. He sells parts, he keeps storage of parts. He's the best holder of parts. If you ever, if anyone ever needs anything they'd go to him. If they didn't go to him it's 'cause they don't know him or they've got a bad relationship with him. But he's, there's no one even close to him in this space.

189. The Authority further accepts the inference, proposed in paragraph 105 of the Complaint, that given

the apparent strength of professional relationship and the esteem to which Mr Layden holds Mr Allam,

both parties were able to engage in open and honest communication surrounding their work. At

paragraph 106, the Complainant refers to the level of knowledge expressed during voluntary

interviews with LGNSW whereby both men were aware of the key drivers of each other's business and

the current work that each is performing.


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190. The Authority accepts that an understanding of each other’s business affairs is established by

statements in the Layden Interview, the First Allam Interview and the Second Allam Interview. For

example:

191. At question 46 of the First Allam Interview, Mr Allam states:

Q46 And what, what sort of licence does Justin hold?

A Justin, uh, actually seller's licence because he buying machine.

192. At questions 228 to 229 of the Second Allam Interview, Mr Allam states:

Q228 I'll ask you about another gentleman. Could you tell me everything about a Mr Justin Layden? A Justin Layden, exactly same like George, you know, they ..... (0:49:28) salesman and he don't

have a premises. Q229 Mmm. A And I do for him the job. He bought the machine. He give me a call and the paperwork. I go to

the club and collect, bring it to here on the storage. Put it on the pallet that belong to him. After he said for me I send that one to here, send that one to there. Maybe the machine is ready a hundred per cent go and sell it on his behalf and get paid for the job we done. From time to time, sometime I got some machines here which look good and he say, all right you want to sell that one? I say, yes I sell it for you. And he do the job and sell it for me.

193. Mr Layden’s awareness of Mr Allam’s business affairs and information about their professional

relationship is also provided at questions 70, 101, 115, 116 and 275 to 278 of the Layden Interview:

Q70 Great. O.K. So tell me about the process, like getting these machines into the club. A Ah, well Riad does work for me because he contracts and does work for me when I buy

machines and get them serviced. So he'll in most cases pick them up, service them and then install them in other venues for me. Install them and he'll charge me to install them. And to install them and to repair them and, so his contract is to do all the work…

… Q101 - - - were they ever I suppose transferred to you? A No, not at, not at this point. But once it's installed Riad transfers them to, he sends a letter to

Office of Liquor and Gaming stating that the machines that are under his license are transferred to my license. And then it would go from there.

… Q115 O.K. So are you aware of Riad holds a license? A Ah, he's got a technician's license. Q116 O.K. A Yep. And that's what I require for him to do the installs for me. … Q275 Yeah, definitely. So obviously Riad does essentially your technicians work. A Yep. Q276 If that was to be - - - A Yep. Q276 - - - a very basic way of looking at it. A Yep. Q277 So if you organise a sale of a machine to a venue. He goes an installs, he removes the

machine, takes it back to his facility at Chipping Norton. A Yep. Q278 And that machine is stored there. A Correct.

Mr Layden’s Awareness of the Allam/Kayrouz Relationship and Source of Gaming Machines

194. At paragraph 107 of the Complaint, it is contended that Mr Layden was aware of the relationship

between Mr Allam and Mr Kayrouz and was aware of how gaming machines XSG306202,

XSG306203, XSG306204, XSG306205 and XSG306206 had been obtained by Allam.

195. The Authority notes Mr Layden’s response to question 190 of the Layden Interview where he states “I

have no idea” as to where Mr Allam got the machines from, adding “I don’t, I don’t even know who he

is” in response to question 211 in relation to Mr Kayrouz. There is insufficient evidence to contradict

this denial, which the Authority accepts.


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Cheating and Unlawful Interference With Gaming Machines

196. Following on from the contention in paragraph 107 of the Complaint (discussed above), the

Complainant contends in paragraph 108 that “This is further evidenced by the actions of Mr Layden to

request gaming machine serial numbers from the manufacturer, which was not required to arrange the

purchase of the appropriate software as providing the correct serial numbers would have sufficed”.

197. At paragraph 109, the Complainant contends that the request for gaming machine serial numbers was

intended to prevent the Manufacturer from becoming aware of which gaming machines were to be

installed. The Complainant submits, at paragraph 110, that this conduct gives rise to a “significant

concern” as to the integrity of Mr Layden and the honesty with which he conducts his business.

198. In the Respondent Submission, Mr Layden submits that the case regarding his honesty is framed

predominantly by reference to the alleged contravention of the Act that is set out in Ground 1

Particular 4 (the alleged fraudulent misrepresentation) and once that allegation falls away, there is

“little basis” to assert that Mr Layden is not a fit and proper person to hold his current licence.

199. As noted above, the Authority is not satisfied that there was a contravention of section 80(4) of the Act

in Ground 1 Particular 4. This matter does not form a basis for impugning Mr Layden’s fitness and

propriety for the purposes of Ground 2.

Due Diligence

200. At paragraph 111 and 112 of the Complaint, the Complainant alleges that Layden identified that he did

not conduct any form of due diligence in relation to the purchase of his gaming machines from Mr

Allam. When questioned by inspectors about the potential for gaming machines to be stolen and sold

to licensed premises, Mr Layden suggested that he did not perform any due diligence because he

doesn’t know anyone who steals machines.

201. As relied upon by the Complainant, the Authority is satisfied that questions 195 to 198 of the Layden

Interview establish there was an absence of any particular due diligence conducted with respect to

these machines. This is acknowledged by Layden:

Q195 So how do you know they're legitimate? A Well because they've got a serial number and the Quickchange proves that there's no, if a

machine is, has a serial number and the serial number works on Quickchange then they're a legitimate machine. That's the quantifiable thing about a legitimate machine. If it has been destroyed it wouldn't have a serial place. The serial plate would be removed before it's destroyed. So if I see the machine at his place and it doesn't have a serial plate, I can't sell it. If it's got a serial plate and it works in Quickchange, well it works. It's not, there's nothing, no reason why it can't be sold.

Q196 All right. Let me give you a hypothetical. A Yep. Q197 Someone goes into a storage facility, steals five machines - - - A Yep. Q197 - - - intact machines, displays them on the floor. You come along and buy them. A Yep. Q198 What due diligence do you take to ensure that they are legitimate machines? Because they

would have serial numbers that would match that machine and everything like that, what, how do you know they're not stolen machines or anything like that?

A I just don't, I don't know anyone who goes and steals machines. I would never, I've been doing it for twenty years, I don't know anyone who's ever stolen a machine. I don't know anything and it just isn't something that I, yes, it could happen, O.K., but I don't, I've had hundreds of transactions with people in this industry and I've never ever found anyone that I've dealt with to be doing that sort of thing ever, so I can't, yeah, that's a, I don't, the thing you've got to understand is for the cost of this system to risk your licence and your livelihood, it's just a, it's not something that people would do. There's not enough financial gain for people to want to risk everything that they've got to get involved in something for ten, twenty, thirty, fifty grand. What's fifty grand going to do to anybody if they don't have a job or industry and they've got a record, it's, people who have their licence in this industry generally have them for a long, long time. There's not many people who are fly-by-nighter's, who are in one year and out the next year. If they've got them, they've had them for a long time. And the companies employ people that have been in the industry for a long time. Very few people get jobs in the gaming industry who weren't working for another gaming company. It's an incestuous industry. So I hear what you say, but I just can't, I can't see that being a risk. That


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someone would take the, you know, ten, twenty, thirty, fifty grand with it, even a hundred, it wouldn't matter, it's not enough to compensate for losing your livelihood.

202. The Authority accepts the contention, at paragraph 113 of the Complaint, that Mr Layden has, for an

extended period of time, conducted his business without the degree of integrity required of the holder

of a gaming related licence. It is here contended that his admission that he did not conduct any form of

due diligence on the machines purchased from Mr Allam indicates that he is willing to purchase

gaming machines without regard for their origin.

203. The Complainant further submits at paragraph 114 that a lack of due diligence is exemplified by Mr

Layden’s gaming machine storage practices. At present, Mr Layden stores all of his gaming machines

on the premises of Mr Allam.

204. The Authority accepts, as contended at paragraph 115, that the premises where these machines were

being stored [the Chipping Norton Warehouse] has at no time been recorded as the primary premises

of Mr Allam. The Authority is satisfied, on the basis of questions 4, 9 and 10 of the First Allam

Interview and questions 319 to 321 of the Second Allam Interview, that Mr Allam conducts his

business from the Chipping Norton Warehouse.

205. As noted above, the Allam OneGov GMT Licence Record indicates that the primary premises for Mr

Allam’s licence is U 5 10 Morgan Street Botany NSW 2019 and not the Chipping Norton Warehouse.

As evidenced by Layden’s responses to questions 277 and 278 of the Layden Interview (extracted

above), Layden stores his machines at the Chipping Norton Warehouse.

206. The Authority accepts the general contention at paragraph 116 that, as a gaming-related licensee, all

persons authorised to operate under the Act must do so with respect for the statutory objects, which

include a commitment to harm minimisation.

207. The Authority is further satisfied, as contended at paragraph 117, that Mr Layden’s storage practices

at the premises of a third party provided no assurances to LGNSW that the gaming machines in his

possession were safely stored or that machines could not be easily removed from the premises and

on-sold to unlicensed individuals.

208. At paragraph 118 it is contended that Mr Layden created a situation whereby club licensed premises

and their members, were exposed to potential gambling harm (through the installation of machines

due for destruction) in an environment where harm minimisation is a key driver of legislative and

regulatory action. The Complainant contends that these actions were driven by the prospect of

significant financial gain (in excess of $65,000) and this conduct further calls into question the integrity

of Mr Layden as a licensee.

209. The Complainant further contends at paragraph 119 that the actions of Mr Layden gave rise to the

relevant clubs using members funds to invest in gaming machines that had been purchased illegally -

with no form of due diligence being performed.

210. In response to the alleged lack of due diligence, Mr Layden contends in the Respondent Submission

that questions 195 through 198 of the Layden Interview need to be considered in context. Mr Layden

submits that the particulars of this Ground do not identify what it is that Mr Layden failed to do that

constituted a lack of due diligence. Mr Layden contends that this was not a situation whereby the

nature of the transaction called for some extra inquiry to be made. He submits that his business of

buying and selling of gaming machines, is carried out on the basis of mutual trust and there was

nothing arising from these events, at least from Mr Layden's perspective, that called for him to take

further action.

211. On the allegations regarding the storage of gaming machines, at the Chipping Norton Warehouse, Mr

Layden contends that nothing particular is identified vis a vis their storage, but a vague complaint is

made that no due diligence took place before storage arrangements were made. Mr Layden submits

that the Complaint does not identify what Mr Layden ought to have done that he did not do, but this

amounts to a post facto or hindsight assertion that, given what is now known as to where Mr Allam

obtained the machines, they should have been stored somewhere else.


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212. Mr Layden submits that the Complainant makes the incorrect assertion that it was the actions of Mr

Layden that gave rise to the acquisition of these machines. This ignores the fact that none of the

events surrounding these machines would have occurred had the Manufacturer properly seen to the

destruction of their machines. Mr Layden submits that “it is ironic that the complaint proceeds upon the

basis that it was legitimate for them [the Manufacturer] to have left to unlicensed third parties the

destruction of the machines - not having themselves removed the serial number plates and relying on

the certificate from Sydney Metal Traders, but that it was not legitimate for Mr Layden to rely upon up

his prior dealings, extensive dealing with Mr Allam, himself a licensed person”.

213. While this is not a decisive matter, the Authority considers that the prolonged storage of Mr Layden’s

stock on the premises of a third party, for purposes other than the servicing of those machines,

involves some degree of laxity with respect to the oversight, custody and control of these regulated

assets. While no specific complaint is made that Mr Layden was conducting his licensed business on

premises that were not disclosed to the Authority, the leaving of his machines under the control of a

third party for a prolonged period is another indicia of a lack of diligence with respect to the control of

these machines.

214. In the Complainant Reply Submission, the Complainant contends that Mr Layden knew or should have

known as a diligent and responsible licensee that the sale of gaming machines to him by Mr Allam

was prohibited by the Act and that as a diligent and responsible licensee he knew or should have

known what activities licensed gaming machine technicians could and could not do - and what

licensed gaming machine sellers could and could not do.

215. The Complainant further submits that Mr Layden could have made enquiries of the Manufacturer (the

serial plate on the machines clearly indicated their connection to the machines), LGNSW, industry

organisations, his many contacts in the industry (gained over Mr Layden's work in the industry for

many years), such as his many client clubs and other venues, other manufacturers, his lawyer and so

on. He should also have made responsible and diligent enquiries of Mr Allam.

216. The Authority is satisfied that Mr Layden exercised a lack of due diligence when purchasing gaming

machines from Mr Allam, a gaming machine technician who did not have a licence authorising him to

sell the machines in question.

217. He was motivated to make these sales by the opportunity to profit. His responses to questions 193

and 194 of the Layden Interview indicate that Layden knew these machines were being offered at a

very low price, which should have warranted further enquiries about both the origins of these

machines and Mr Allam’s status as a licensee.

Q193 You don’t know where they came from? A No. Q194 Just seen them there and said, oh beauty. A Absolutely, absolutely. Because he was selling to me at a really cheap price and I’m going to

sell them for as much as I can get for them.

218. The Authority accepts the Complainant’s proposition that a reasonable licensed gaming machine

seller with Mr Layden’s experience and history of dealings with Mr Allam either knew, or should have

known, that Mr Allam was a licensed technician and that this licence type does not permit the sale of

gaming machines in NSW. The Authority accepts that a licensed gaming machine seller should be

familiar with the prohibitions that restrict the sale of gaming machines in this State and demonstrate

the ability to ensure compliance when dealing with third parties.

219. The Authority does not accept the proposition that there need be anything inherent in the transaction

to prompt a person to establish that the party selling gaming machines holds a licence. The prohibition

is clear. If he was in any doubt as to the scope of his licence, of that of his counterparty, he had

numerous avenues to verify Mr Allam’s licence status. The fact that Mr Layden also permitted his

machines to be stored on Mr Allam’s premises for some time underscores how well-established the

professional relationship was. Mr Layden’s knowledge that Mr Allam ran a technician’s business

should have prompted him to confirm whether Mr Allam could also sell gaming machines. These


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failures with respect to due diligence are adverse to an assessment of Mr Layden’s honesty and ability

as a gaming related licensee with respect to matters of regulatory compliance.


220. At paragraph 120 of the Complaint, the Complainant refers to the allegations in Ground 1 to establish

that Mr Layden is no longer a fit and proper person to hold a gaming related licence.

221. The Authority accepts, on the basis of its findings and evidence in support of Ground 1, that Mr

Layden has contravened a number of important requirements and provisions under the Act. These

matters demonstrate a lack of requisite ability, knowledge, and to some degree honesty required of a

reasonably diligent licensed gaming machine seller as reasonably expected of Mr Layden by the

industry and the community.

222. The Complainant further contends at paragraph 121 that during the interview with LGNSW inspectors

Mr Layden failed to demonstrate sufficient knowledge of the Act and how it relates to his conduct and

responsibilities as a gaming related licensee.

223. The Authority accepts, as alleged in paragraph 122, that at question 35 of the Layden Interview, Mr

Layden identified that he was aware that as the holder of a GMS licence, he is entitled to “sell poker

machines in the gaming industry. To store and hold poker machines um, at a licensed premises, at a

registered premises”.

224. Mr Layden’s statement at question 115 of the Layden Interview “he’s got a technician’s licence”

satisfies the Authority, as contended at paragraph 123 of the Complaint that, Mr Layden was aware

that Mr Allam held a technician’s licence.

225. At paragraph 124 it is contended that whilst Layden was aware of licences held by himself and Allam,

he maintained to LGNSW that he has a “misguided belief” that he can purchase gaming machines

from anyone and “anywhere”. Questions 234 and 235 of the Layden Interview state:

Q234 Your licence permits you to purchase machines. A Yep. Q235 Who from? A Anywhere.

226. The Complainant contends at paragraph 125 of the Complaint that Mr Layden is either “willfully

unaware” or “ambivalent to his obligations” to be aware and comply with the requirements of the Act

and Regulation that relate specifically to the purchase of gaming machines within NSW. Since Mr

Layden identifies that he does not perform any form of due diligence as to the integrity or source of

gaming machines that he purchases, stating that "he can purchase gaming machines from anywhere"

this evidences a significant lack of knowledge on his part, and serious doubt that he is concerned

about any harm mitigation within the industry.

227. At paragraph 126, it is contended that the degree of knowledge displayed by Mr Layden is not

consistent with that of a “prudent and responsible” licence holder who has been authorised to operate

under the Act for a period in excess of 17 years.

228. The Complainant further contends at paragraph 127 of the Complaint that Mr Layden, as identified

within Ground 1 Particular 3 actively engaged in the sale of gaming machines overseas. The apparent

lack of knowledge of the notification process required under the Act further questions the overall

knowledge that Mr Layden possesses in regard to his legislative obligations.

229. In response, Mr Layden submits that this Ground proceeds upon the basis that the contraventions in

Ground 1 are established. Mr Layden also refers to the “context” established in questions 233 to 238

of the Layden Interview on the issue of who he can purchase gaming machines from. Mr Layden says

that what he meant to say to LGNSW is that he buys from either people who have licences or pubs

and clubs, not that he can buy machines from “anyone”. Mr Layden submits that the interviewer

appears to have accepted that answer as it was intended, since there was no further probing to

suggest the proposition that the Complainant now seeks to make.


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230. The Authority accepts that Mr Layden did not actually believe that he was able to buy gaming

machines from anyone, but the Authority is satisfied that Mr Layden’s dealings with respect to gaming

machines established in Ground 1 Particulars 1 and 2 and his consigning or moving approved gaming

outside of NSW as established in Ground 1 Particular 3 establish, on a cumulative basis, for the

purposes of Ground 2, that Mr Layden fails to hold the degree of honesty, ability and knowledge that is

reasonably expected of a gaming-related licensee. He could have taken professional advice or seek

information from LGNSW regarding his ability to purchase the machines in question, or to move

gaming machines overseas, if he were in any doubt as to the regulatory requirements pertaining to

these transactions. There is no indication that such advice was obtained.

Conclusion on Ground 2

231. The Authority has taken into account the length of time Mr Layden has spent as a licensed seller and

there is no evidence of prior regulatory issues in the material before the Authority.

232. In a one-page letter from Mr Durban Arnold, the CEO of Ourimbah-Lisarow RSL Club Ltd dated 28

May 2018, Mr Arnold states that he is aware of the Complaint and the allegations generally against Mr

Layden. He states that he has known Layden for over 15 years, both personally and in business

dealings, and has “always found him to be honest, forthright and high integrity” having “never had” any

issues with any of his dealings with Layden “on both a personal and business level”.

233. In a one-page letter from Mr Denis Sullivan, (then) CEO of Forestville RSL Club dated 28 May 2018,

Mr Sullivan states that he is generally aware of the allegations made in the Complaint. He states that

he has known Layden for over 12 years, both personally and in a business relationship, and has

purchased second hand poker machines through Bestnett. He “always found” Layden to be “very

professional” having “never had any problems”. Sullivan describes Layden as an “honest” person who

“acts in the best interest for his clients whilst maintaining a very high level of integrity”. Sullivan also

states that he has played football with Mr Layden for “many years” stating that he is “very popular with

his team mates” who “hold him in high regard”. Sullivan states that Layden is “always on hand to help

out whenever he can and nothing is ever too much”.

234. The Authority accepts that these references provide some evidence of Mr Layden’s dealings in the

industry and general good character. The Authority accepts that his past professional dealings with

those two clubs were positive.

235. What is at issue is his honesty and ability with respect to matters of regulatory compliance as

established by this Complaint. Mr Layden has engaged in substantial contraventions of important

legislative controls with respect to the buying and selling of gaming machines in NSW and the

consignment or movement of machines outside of NSW. He has done so for financial gain.

236. Looking forward, the Authority cannot give its imprimatur to Mr Layden as a fit and proper person to

hold a gaming related licence.

237. Ground 2 is established.

FINAL SUBMISSIONS ON DISCIPLINARY ACTION

238. On 2 August 2019 the Authority sent a detailed letter to Mr Layden setting out its findings on the

Grounds of Complaint (“Findings Letter”) and inviting any final submissions confined to whether the

Authority should take disciplinary action against him on the basis of those findings.

239. On 12 August 2019 the Complainant provided a brief submission noting that most of the particulars

alleged in Ground 1 and the entirety of Ground 2 were established. On the question of any disciplinary

action the Complainant submits that the Authority should:

• impose a monetary penalty upon Mr Layden (noting that the maximum penalty for an

individual is $22,000.00);

• disqualify Mr Layden from holding a gaming-related licence for a period of not less than 3

years (or, in the alternative, cancellation or suspension of the licence for a period the

Authority thinks fit) and


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• order Mr Layden to pay the Secretary’s costs on the investigation that gave rise to the

Complaint in the sum of $26,486.47. The Complainant attaches a Table providing a brief

breakdown of the heads of costs incurred by the Secretary.

240. As a separate matter, the Complainant requests that the Authority take action under section 64(6) of

the Act to revoke the approved status of all gaming machines and all parts within that are referred to at

paragraph 39 of the Findings Letter (which the Authority notes are repeated at paragraph 39 of this

letter). The machines remain in the custody of LGNSW.

241. Mr Layden responded to the Findings Letter and the Complainant’s final submissions by way of a six-

page submission letter though his solicitor, Mr Don McDougall, dated 26 August 2019. It was

accompanied by emails between Mr Riad Allam and Peter Taylor dated 29 May 2013 and 12 June

2013; a character reference for Mr Layden from Mr Craig Russell, Slattery Auctions and Valuations,

dated 19 August 2019; a character reference for Mr Layden from Mr Durban Arnold, Chief Executive

Officer of Ourimbah-Lisarow RSL Club Ltd dated 28 May 2018 and a character reference for Mr

Layden from Mr D Sullivan, Chief Executive Officer, Forestville RSL Club dated 28 May 2018.

242. By way of introduction, Mr Layden submits that the Authority’s findings indicate that the investigation

giving rise to this Complaint arose by reason that Mr Layden sought to install machines on club

premises that had been obtained by Mr Riad Allam illegally, without Mr Layden’s knowledge. The

findings indicate that Mr Layden made enquiries of Mr Allam “to the best of his ability” but relied upon

a gaming machine seller’s licence in circumstances when he was not permitted to do so.

243. Mr Layden acknowledges that “some” of his conduct of the business conducted pursuant to his licence

has fallen below the standard expected by the Act. Since the Complaint was initially made in March

2018, Mr Layden has had time to reflect upon that conduct.

244. Mr Layden submits that the Complainant’s proposals for disciplinary action are “disproportionate” to

the findings against him and “inappropriate”, given the range of action available under section 131 of

the Act. On the question of costs, Mr Layden submits that Mr Allam was the “architect” of the

circumstances giving rise to contravention of section 71(2) of the Act and in relation to the

contravention of section 79(1) of the Act, that contravention was admitted in Mr Layden’s submissions

dated 1 June 2018. He submits that any costs ordered by the Authority should be “nominal” only.

245. More specifically, Mr Layden submits with regard to Ground 1 that:

• He had been dealing with Mr Allam for 17 years after being introduced to him while

Layden was an employee of Independent Gaming Services. While an employee Mr

Layden became aware of other industry participants who had dealings with Mr Allam.

• Mr Layden’s dealings with those other parties were made on the basis of “industry

knowledge, or at least perceived industry knowledge” that the participants held and

appropriate licence.

• Mr Layden attaches an email exchange between Mr Riad Allam and Taylor Nicholas

Realty, dated 29 May 2013 and 12 June 2013. Mr Layden contends that this “allows a

reasonable inference” that during 2013 the (then) Office of Liquor Gaming and Racing

(“OLGR”) were “comfortable” with Mr Allam storing, purchasing and selling gaming

machines, and Mr Allam referred to licence number 24010748 as entitling Mr Allam to

purchase machines the subject of that correspondence.

• Since 2000, Mr Layden has not been aware of any “publically available database or

licence information” through which he may have conducted “due diligence” on Mr Allam’s

licence status.

• Mr Layden is not aware of any LGNSW Fact Sheet or Guideline directing licensees to

make such enquiries of their counterparties to verify their licence status and there was

“no definitive statement” made in the Complaint specifying what “due diligence” ought

have been undertaken by Mr Layden but not performed.

• A Tax Invoice from Tonita Enterprises (apparently Mr Allam’s business) to Bestnet

Holdings dated 4 April 2017 recording the sale of gaming machines from Mr Allam to Mr


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Layden’s client fails to disclose any licence number for Mr Allam or any related entity. By

contrast, the documents at Exhibit E10 of the Complaint Material (Email exchange

between Mr Troy Bell and Mr James Hall dated 27 March 2017 and Manufacturer’s

Customer Information form completed by Tonita) bear the licence number 24010748.

• Mr Layden’s solicitor made “telephone enquiries with L&GNSW, made with great

difficulty” that established that licence 24010748 is a seller’s licence associated with Mr

George Cragen, who was noted as a trade referee for Mr Allam. On this basis, it would

appear that Mr Allam has been using, or purporting to use, this licence to sell machines.

• The Quickchange system did not and does not require a person in Mr Layden’s position,

when dealing with Mr Allam, to input the details of any licence number or description of

the licence.

• Mr Layden contends that in order to arrange for the removal of a gaming machine from

one location to another, arising from the sale of that machine, the data is inputted into the

Quickchange system on the basis that the sale has already occurred. The system does

not seek verification of the vendors of the machine. Up to about 2009 OLGR produced a

template “Machine Movement Advice” to be sent by letter or facsimile, but that was

discontinued with the introduction of Quickchange.

• Mr Layden was “put in the position he found himself in” during 2017 because of “Mr

Allam’s untruthful representation” and in the absence of any statutory information or

controls.

246. With regard to Ground 2, Mr Layden makes the following further submissions:

• This matter concerns Mr Layden’s dealings with “another gaming enterprise” (Aumaas

Dooel) which resulted in the sale and transport of machines overseas.

• Mr Layden has admitted that the sale occurred without the requisite notice to the

Authority.

• Mr Layden submits that that the “statutory scheme for notification of such movements

was at that time unclear” with no published information about this requirement. Mr Layden

submits that this lack of clarity was “recognised” in an amendment to the Act which now

“specifies” formal notification of movement overseas.

247. In conclusion, Mr Layden submits:

• Ground 1 and Ground 2 occurred “against a backdrop of deception” by other parties, a

lack of information published by OLGR and a deficiency in the statutory scheme under

the Act. There was no “intent” to “deceive, fail to comply or evade scrutiny by LGNSW” on

Mr Layden’s part.

• The consequences of the Complainant’s request for costs and disqualification from

holding a licence will be “severe”. Mr Layden is 52 years old and disqualification would

exclude him from the only industry in which he has expertise.

• Mr Layden submits that disqualification would deprive him of the ability to work in the

industry “permanently” by reason that the goodwill and industry contacts he has acquired

would “disappear”.

• Mr Layden is “well regarded” in the industry and refers to the character references that

accompany this submission.

• Mr Layden submits that, by reason of the time it has taken to resolve this Complaint, that

the “Director” has not regarded this matter as serious and requiring prompt resolution.

During this time Mr Layden has suffered damage to his goodwill and reputation and

losses of income.

• Mr Layden concludes that an appropriate disciplinary action would constitute “a warning,

no fine and a nominal order in relation to costs”.

CONCLUSION

248. The Authority has taken into account Mr Layden’s final submissions and supporting material. It notes

the length of time Mr Layden has dealt with Mr Allam in the industry. As a licensed seller of gaming


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machines in the circumstances specified in Ground 1, Mr Layden should have been aware of the

requirement under section 71 of the Act that a person may not sell gaming machines in NSW without a

seller’s or dealer’s licence, nor may a person buy gaming machines from a person who does not hold

such a licence.

249. Mr Layden must have known from his prior dealings that Mr Allam was in business as a gaming

machine technician. That type of licensed business does not, per se, involve the sale of gaming

machines. Section 71 of the Act makes clear that it was Mr Layden’s responsibility to know the

licensing status of Mr Allam as a counterparty to any sale of gaming machines in NSW.

250. There is no clear evidence of Mr Layden being told by Mr Allam that Mr Allam held a dealer’s licence

or a seller’s licence. Mr Layden could have made enquiries of the regulator, LGNSW, to confirm Mr

Allam’s licence to sell gaming machines. The absence of any published database of licensees or

access to relevant information on the Quickchange database does not excuse the absence of any

apparent attempt by Mr Layden to contact the regulator, LGNSW, to confirm whether Mr Allam held a

seller’s or dealer’s licence. The Authority does not accept that this is a difficult task.

251. Furthermore, the Authority does not accept that there was any lack of clarity regarding the obligation

of a licensed seller or dealer to give notice to the Authority, under section 79 of the Act, of the

proposed consignment or movement of gaming machines outside of NSW. In any event, Mr Layden

acknowledges this failure in this regard and the Authority has taken this concession into account.

252. The Authority regards the facilitation of any sale of gaming machines or parts by an unlicensed

vendor, contrary to section 71, to be a serious matter. It undermines the licensing regime and

threatens the integrity of the gaming machines industry in NSW, contrary to the statutory object in

section 3(1)(d) of the Act. The sale of machines (or parts) by unlicensed persons may potentially work

against the section 3(1)(a) object of minimising harm associated with the misuse or abuse of gambling

activities, should (for example) unlawfully-traded machines or parts end up in an unregulated or poorly

controlled environment in NSW or should ageing, faulty or obsolete games or parts recirculate

throughout the industry. Failure to notify the Authority of the movement of machines out of NSW, per

section 79 of the Act, is also conduct that may work against these statutory objects, albeit less directly.

253. The Authority has taken into account Mr Layden’s history of involvement in the industry and the

number of machines (six) that were the subject of the unlawful sales between Mr Layden and Mr Allam

which were of a significant value. The Authority has also taken into account the extent of Mr Layden’s

failure to notify to the Authority of the movement or consignment of some 18 machines outside of

NSW and notes the substantial value of those unreported sales. The Authority has also taken into

account the positive character references provided by Mr Layden and the absence of any evidence of

misconduct outside the matters the subject of this Complaint.

254. While the Authority accepts Mr Layden’s contention that he is 52 years old and that any action against

his licence will deprive him of the ability to perform work requiring that licence, the Authority considers

that the public interest in the protection of the industry and the community requires that some

moderate regulatory action be taken against the licence. Accepting that Mr Layden has had time to

reflect upon his conduct, the Authority considers that suspending the licence for a moderate period of

time will send an appropriate signal to others in the industry to ensure they take reasonable steps to

ensure that any dealings with regard to gaming machines comply with the requirements of sections 71

and 79 of the Act.

255. The Authority does not accept the proposition that any action against the licence will permanently

remove Mr Layden from the industry. Persons in the industry will be entitled to weigh up the

Authority’s findings against his past involvement with the industry and consider Mr Layden’s conduct

on its merits. Mr Layden’s character references indicate that he is not without support in the industry.

The Authority is not satisfied that all his commercial relationships will “disappear” should he spend

some time out of the industry. The Authority accepts that suspension of the licence will come at


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significant economic loss to Mr Layden’s business, but that private prejudice is a necessary

consequence of ensuring public confidence in the regulatory scheme through appropriate disciplinary

action.

256. In conclusion, the Authority does not accept that a long-term disqualification of Mr Layden is warranted

in all the circumstances of this case, but some significant regulatory response, by way of a licence

suspension of 12 months, is required in this case. As the Authority has not disqualified Mr Layden

from the industry, he will not need to reapply for his licence but may resume exercising the licence

after 12 months.

257. The Authority is further satisfied, having regard to the moderate degree of seriousness of Mr Layden’s

misconduct, that some monetary penalty is also warranted as an additional deterrent to others in the

industry who may be tempted to disregard their obligations under sections 71 and 79 of the Act.

Noting that the maximum monetary penalty for an individual is $22,000.00, the Authority is satisfied

that a penalty in the amount of $8,000.00 is appropriate on the facts of this case.

258. Finally, the Authority accepts that the costs of the investigation giving rise to this Complaint are

reasonable on the basis of the breakdown provided in the Complainant’s final submissions. In

circumstances when most of the particulars of Complaint have been established and an investigation

into these matters was clearly warranted, it is in the public interest that the Secretary recover those

costs in full.

259. The Authority also considers it appropriate, to ensure timely payment, to impose a condition upon Mr

Layden’s GMS licence preventing the licence from being exercised until the monetary penalty and

costs ordered by the Authority under this decision have been paid in full to the Secretary.

ORDERS

260. The Authority makes the following Orders:

(i) Pursuant to section 131(2)(d) of the Act, Gaming Machine Seller Licence GMS4010639 held by Mr Justin Layden is suspended for a period of 12 months with effect from 4 February 2020.

(ii) Pursuant to section 131(2)(a)(i) of the Act, Mr Justin Layden is ordered to pay a monetary penalty to the Secretary of the New South Wales Department of Customer Service (“Secretary, DCS”) in the sum of $8,000.00 by no later than 4 February 2020.

(iii) Pursuant to section 131(2)(i)(i) of the Act, Mr Justin Layden is ordered to pay the Secretary, DCS the amount of $26,486.47, being the costs on the investigation giving rise to this Complaint, by no later than 4 February 2020.

(iv) Pursuant to section 131(2)(e) of the Act, impose the following condition, commencing on 4 February 2020, on Gaming Machine Seller Licence GMS4010639:

This licence shall not be exercised until the monetary penalty and costs ordered by the Authority in its disciplinary decision dated 7 January 2020 have been paid in full.

REVIEW RIGHTS

261. Pursuant to section 131C of the Act, an application for review of this decision may be made to the

New South Wales Civil and Administrative Tribunal (“NCAT”) by the Complainant, the licensee or any

person against whom any disciplinary action is taken under Part 8 of the Act, by no later than 28 days

after those parties receive notification of this decision.

262. For more information, please visit the NCAT website at www.ncat.nsw.gov.au or contact the NCAT

Registry at Level 9, John Maddison Tower, 86-90 Goulburn Street, Sydney.


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Yours faithfully

Murray Smith Deputy Chairperson For and on behalf of the Independent Liquor and Gaming Authority


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Schedule A – Complaint Material

1. One-page cover letter from Mr Sean Goodchild (“Complainant”), Director Compliance Operations of

Liquor & Gaming NSW (“LGNSW”) to the Independent Liquor and Gaming Authority (“Authority”)

signed and dated 1 March 2018.

2. A twenty-three page submission particularising the two grounds of complaint (“Complaint”) including a

dramatis personae, chronology of events and exhibit list.

3. Exhibit E01: OneGov licence record for Gaming Machine Seller Licence GMS4010639 as at 6 April

2017 and 23 February 2018.

4. Exhibit E02: Australian Securities and Investments Commission (“ASIC”) Company Extract for Better

Returns Holdings Pty Ltd (“Better Returns”) extracted on 30 May 2017.

5. Exhibit E03: ASIC Company Extract for Bestnett Gaming Solutions NSW Pty Ltd (“Bestnett Gaming”)

extracted on 6 July 2017.

6. Exhibit E04: A five-page statement from Mr Adrian Halpenny, Director and Secretary of SG Gaming

ANZ Pty Ltd (“the Manufacturer”), dated 31 March 2017 accompanied by the following documents:

• Exhibit 1: Tax Invoice SI027502 from the Manufacturer to Ramsgate RSL Memorial Club

dated 8 December 2014.

• Exhibit 2: Quickchange Authorisation Report for application number 231457 dated 16

December 2014.

• Exhibit 3: Sales Credit Note SC001279 from the Manufacturer to Ramsgate RSL

Memorial Club dated 9 September 2015.


September 2015.

• Exhibit 5: Email correspondence from Mr Paul Bunting dated 31 August 2015 and Ms

Sue Virgin dated 28 August 2015.

• Exhibit 6: Site to Site-Road transport instructions number STG6066038 dated 31 August

2015.

• Exhibit 7: Email from Mr Paul Bunting dated 18 February 2016.

• Exhibit 8: Certificate of Destruction issued to The Cleanup Guy by Sydney Metal Traders

Pty Ltd dated 9 November 2016.

• Exhibit 9: Email from Mr Paul Bunting dated 10 November 2016.

• Exhibit 10: Email correspondence between Mr Troy Bell, Mr James Hall and Mr Riad

Allam dated 24 March 2017 and 27 March 2017 including a completed Customer

Information Form signed by Mr Allam and dated 27 March 2017 and a copy of the

LGNSW bill for the Annual Gaming Machine Licence Fee 2017 issued on 23 December

2016.


March 2017.

7. Exhibit E05: Quickchange Authorisation Report for application number 265153 dated 29 March 2017.

8. Exhibit E06: Transcript of the interview between LGNSW inspectors and Mr Ravih Faycal dated 11

April 2017.

9. Exhibit E07: Transcript of the interview between LGNSW inspectors and Mr Riad Allam dated 11 April

2017.

10. Exhibit E08: Transcript of the interview between LGNSW inspectors and Mr Riad Allam dated 17 May

2017.


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11. Exhibit E09: LGNSW Notice to Produce dated 20 April 2017, issued to Mr Justin Layden of Better

Returns under section 21 of the Gaming and Liquor Administration Act 2007 (NSW) (“GALA Act”).

12. Exhibit E10: LGNSW Notice to Produce dated 20 April 2017, issued to Mr Troy Bell of the

Manufacturer under section 21 of the GALA Act.

13. Exhibit E11: Transcript of the interview between LGNSW inspectors and Mr Habib Kayrouz dated 26

April 2017.

14. Exhibit E12: Transcript of the interview between LGNSW inspectors and Mr Justin Layden dated 13

April 2017.

15. Exhibit E13: OneGov licence record for Gaming Machine Technician Licence GMT4010748 as at 6

April 2017.

16. Exhibit E14: ASIC Company Extract for Tonita Enterprise Pty Ltd (“Tonita”) extracted on 23 May 2017.

17. Exhibit E15: Tonita Invoice number 98005 issued to “Bestnet Gaming” dated 4 April 2017.

18. Exhibit E16: Commonwealth Bank Receipt number N041073405021 dated 10 April 2017.

19. Exhibit E17: ANZ Bank Statements for Tonita between 1 January 2016 and 11 April 2017.

20. Exhibit E18: List of gaming machines sent for destruction by the Manufacturer between 2 March 2016

and 22 March 2017.

21. Exhibit E19: Certificate of Destruction issued to The Cleanup Guy by Sydney Metal Traders Pty Ltd

dated 16 March 2016.

22. Exhibit E20: Quickchange Authorisation Report for application number 261909 dated 16 December

2016.

23. Exhibit E21: Email correspondence between Mr Anthony Vescio and Mr Andrew Restauro dated 4

May 2017 containing Central Monitoring System user interface screenshots for application number

261909.

24. Exhibit E22: Tax Invoice 428 issued by Better Returns to Balgowlah RSL Memorial Club (“Balgowlah

RSL”) dated 20 December 2016.

25. Exhibit E23: Commonwealth Bank Statements for Better Returns between 1 January 2016 and 10

April 2017.

26. Exhibit E24: Tonita Invoice number 70094 issued to Better Returns dated 15 December 2016.

27. Exhibit E25: LGNSW Notice to Produce dated 3 May 2017, issued to The Proper Officer – Compliance

Services Commonwealth Bank of Australia under section 21 of the GALA Act.

28. Exhibit E26: LGNSW Notice to Produce dated 31 May 2017, issued to Mr Justin Layden of Better

Returns under section 21 of the GALA Act.

29. Exhibit E27: Tax Invoice 421 issued by Better Returns to Aumaas Dooel dated 14 December 2016

and Tax Invoice 417 issued by Better Returns to Auumas Dooel dated 9 November 2016.

30. Exhibit E28: One-page statutory declaration of Mr Justin Layden dated 13 June 2017 attaching the

following documents:

• Seven separate annotated copies of Schedule A to the LGNSW Notice to Produce dated

31 May 2017, issued to Mr Justin Layden of Better Returns under section 21 of the GALA

Act (Exhibit E26).

• Tax Invoice 421 issued by Better Returns to Aumaas Dooel dated 14 December 2016

and Tax Invoice 417 issued by Better Returns to Aumaas Dooel dated 9 November 2016.

31. Exhibit 29: Email correspondence between Mr Justin Layden and Mario Machado dated 10 March

2017, email correspondence between Mr Mario Machado and Ms Sue Backhouse dated 14 March


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2017 and email correspondence between Ms Sue Backhouse and Mr Anthony Vescio dated 6 April

2017.

32. Exhibit E30: A three-page statement from Ms Suzanne Backhouse, Gaming Manager at Hornsby RSL

Club Ltd (“Hornsby RSL”), dated 19 April 2017.

33. Exhibit E31: Tax Invoice 342 issued by Better Returns to Hornsby RSL dated 23 March 2017.

34. Exhibit E32: A four-page statement from Mr Nathan Storey, Sale Account Executive for the

Manufacturer, dated 14 June 2017 accompanied by the following documents:

• Exhibit 1: A screenshot of an SMS text message exchange between Mr Layden and Mr

Storey dated 24 March 2017.


March 2017.

• Exhibit 3: Quote/Order Request Template and Official Quotation signed by Ms Sue

Backhouse of Hornsby RSL dated 11 April 2017.

35. Exhibit E33: SG Gaming ANZ Pty Ltd Customer Order ORD-21542-P1N9N4 signed by Mr Nathan

Storey and dated 30 March 2017.

36. Exhibit E34: LGNSW Notice to Produce dated 27 April 2017, issued to Mr Craig Hodge – Operations

Manager the Richmond Club Limited (“Richmond Club”) LIQC300243672 under section 21 of the

GALA Act.

37. Exhibit E35: A two-page submission from Mr Craig Hodge, Operations Manager of Richmond Club,

dated 1 May 2017 accompanied by the following documents:

• Email correspondence between Mr Craig Hodge and Mr Justin Layden dated 1 March

2017 and 3 April 2017.

• Quickchange Authorisation Report for application number 255633 dated 16 August 2016.

• Quickchange Authorisation Report for application number 258228 dated 12 October

2016.

• Quickchange Authorisation Report for application number 260520 dated 24 November

2016.

• Quickchange Authorisation Report for application number 260618 dated 26 November

2016.

• Quickchange Authorisation Report for application number 262129 dated 21 December

2016.

• Quickchange Authorisation Report for application number 265935 dated 11 April 2017.

38. Exhibit E36: Transcript of the interview between LGNSW inspectors and Mr Jason Leong dated 16

May 2017.

39. Exhibit E37: Chipping Norton Warehouse Inventory.

40. Exhibit E38: LGNSW File Note by Mr Anthony Vescio dated 21 June 2017.

41. Exhibit E39: Gaming Machines Review – SG Destruction Machines Current Provenance.

42. Exhibit E40: Screenshot of a section 79 of the Gaming Machines Act 2001 (NSW) exemption search

on CM9.

decision with reasons and notice of disciplinary action on ...€¦ · doc20/001704 – final...

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