The ACT Gambling and Racing Commission agreed to scrap a $120,000 fine despite the commission's boss saying he was confident of proving Belconnen Raiders broke poker machine laws in the case of a problem gambler.
The commission fined Raiders last year after finding that the club had breached the law on eight separate occasions by failing to record the signs that Professor Laurie Brown had a gambling problem.
Professor Brown, a poker machine addict, lost $226,050 at Raiders Belconnen between June 2015 and January 2017.
Raiders dismissed the findings and appealed, and the commission agreed to drop the fine, replacing it with a reprimand and a legally binding commitment that Raiders would donate $60,000 to a charity supporting gambling harm minimisation.
Gambling and Racing Commission chief executive David Snowden said the commission was confident it had the evidence to prove that Raiders broke the law, but kept an open mind about settling because the case was "highly complex" and "carried risk".
"From the outset, the intention of the Gambling and Racing Commission disciplinary action was to prove that the Raiders club had not complied with their obligations under the code of conduct," Mr Snowden said.
"Whilst we were confident in our case, this was a highly complex litigation that carried risk.
"When you are in a complex litigation, when parties are considering positions, it's important to keep an open mind about how a matter can be settled."
Mr Snowden said that by accepting a reprimand as part of the settlement, Raiders had "practically acknowledged" contravening the law, which was a win for the commission.
He repeatedly stressed the complexity of the case, saying that in a case like this, there was an inherent risk of the penalty being overturned entirely or reduced to something "considerably less".
"There is still a significant contribution that is going to charity to support harm minimisation," Mr Snowden said, when asked if the financial impact on the Raiders club was sufficient.
"It is a proportionate response to the conduct... the financial component was just one component of it," he said, noting that Raiders Belconnen had already stepped up training for its staff.
The club will also provide the commission with an external compliance report on its procedures and training for recording problem gambling incidents by December 1 next year.
The commission's decision has enraged Professor Brown, who said she felt "betrayed and let down".
Initially silent when news of the settlement broke, ACT Attorney-General Gordon Ramsay broke his silence on Thursday night to blast the agreement and announce a review of the territory's gaming regulations.
Mr Ramsay said he would introduce amendments to gambling laws into the assembly before the end of the year, addressing self-exclusion, staff training and penalties for breaching the law.
"The government is extremely disappointed with the outcome of the Raiders club case and that the process took so long,” Mr Ramsay said.
“The case was not transparent enough and the penalties ultimately imposed seem insufficient."
Mr Ramsay said the outcome of the case made it clear there was more work to be done around gambling harm minimisation.
“We need to ensure that our gambling harm minimisation rules are effective, and that venues who do not comply face meaningful consequences," he said.
"Clubs who fail to take steps to protect their patrons should face penalties that reflect the significance of the harm they cause."
Mr Ramsay said the ACT government had already implemented gambling reforms including limiting cash withdrawals in clubs, increasing club contributions to the problem gambling assistance levy by $300,000 a year, and helping clubs diversify their income away from gambling revenue through a tax rebate and grants program.
Territory and federal politicians have condemned the withdrawal of the Raiders fine, with ACT Greens leader Shane Rattenbury and independent federal MP Andrew Wilkie especially vocal.
Mr Rattenbury said Professor Brown had "worn plenty of responsibility" through her financial losses and the impact on her personal relationships, but Raiders hadn't paid a fair price.
He believed the poker machine industry was "rotten".
"Laurie Brown is an example of someone who has a very professional career, she's well educated, and yet she has been impacted by the addictive nature of these machines," Mr Rattenbury said.
Raiders Group chief executive Simon Hawkins has not responded to a request for comment.