On this page:
The Australian Financial Security Authority (AFSA) investigates and refers alleged offences to the Commonwealth Director of Public Prosecutions (CDPP) for prosecution. The decision to prosecute is made solely by the CDPP.
AFSA staff act as delegates of the Inspector-General in Bankruptcy, and exercise the Inspector-General’s powers under the Bankruptcy Act 1966 and Bankruptcy Regulations 1996. References in this document to AFSA are generally references to delegates of the Inspector-General, unless the context indicates otherwise.
This document explains how AFSA decides whether to refer offences under section 271 of the Bankruptcy Act 1966 to the CDPP. These offences relate to rash and hazardous gambling leading to insolvency.
AFSA considers gambling offences under section 271 to be unique offences. Therefore, this document does not include rigid rules that apply to all situations. Instead, it provides guidelines for approaching each case on its merits.
AFSA is unlikely to refer a case for prosecution where it appears the bankrupt was a 'problem gambler', and had not committed any criminal activity to finance their gambling habit.
This reflects the principle that the public interest is not usually served by prosecuting vulnerable or disadvantaged people. The purpose of section 271 is to deal with conduct which a person can be expected to anticipate seriously risks insolvency, where the gambling was reckless and without due consideration or regard for consequences. AFSA does not consider cases which only involve 'problem gambling' as having these characteristics.
AFSA will consider referring a case for prosecution where it involves:
- clear criminality – e.g. a person, after realising insolvency was inevitable, sold their assets and gambled with the proceeds to prevent creditors being paid.
- other offences – e.g. the gambling is accompanied by other offences, such as obtaining money by deception or hiding assets from the trustee.
- repeat offending – e.g. a person has been bankrupt, there was evidence of a gambling offence and an official caution was issued. If the person becomes bankrupt again and there is evidence of another gambling offence, then it could be referred for prosecution.
AFSA’s decision not to refer an offence cannot just be based on the bankrupt saying they have a 'gambling problem'. Evidence confirming the bankrupt suffers from such a 'problem' is required.
Also, long-term or repeat offenders are expected to seek help for their gambling problem. If there is no evidence the bankrupt has sought help, AFSA may refer the case for prosecution.
The guidelines set out in this document should not stop stakeholders from submitting a referral concerning gambling (see IGPS14). In assessing gambling referrals, AFSA considers alternative actions to prosecution. For example, AFSA may issue an ‘official caution’ to educate and deter people from repeat offending.
 Note that section 271 also applies to speculations – however this practice statement only applies to gambling.