The Victorian Gambling and Casino Control Commission says the Australian Leisure and Hospitality Group (ALH) is alleged to have operated 220 machines for up to five weeks without the YouPlay technology.
ALH could be fined a maximum of around $1.35 million for the breach.
YouPlay gives people the ability to set time and spending limits to help them stay in control.
Commission chief executive Annette Kimmitt said it had decided to prosecute as the alleged breaches constituted serious and significant non-compliance issues.
"Anyone who holds a gambling licence in Victoria is on notice that they must, at a minimum, comply with their legal obligations to protect patrons from gambling harm," Ms Kimmitt said.
"Having YourPlay installed and available on electronic gaming machines is a mandatory requirement to support safer gambling."
But Steve Donohue, chief executive of parent company Endeavour Group, said an internal review found the alleged offending was an "isolated but regrettable case of process and communication failure in our internal supply chain".
"We are acutely aware of the seriousness of this matter and we are committed to doing all we can to ensure it does not happen again," Mr Donohue said in a statement.
"At Endeavour, we hold ourselves to the highest standard of responsibility, we regret that this has occurred."
The commission investigation began after an anonymous tip-off in December 2021, which prompted inspectors to visit multiple venues in Hallam, Sandringham, Narre Warren, Mulgrave, Laverton and Cheltenham.
Following those inspections, the company turned off all 220 non-compliant machines across 62 of its 77 venues.
Endeavour said they were machines installed as part of a new game and machine cabinet rollout that had been delayed by COVID-19 hotel closures.
It said as soon as the matter was raised it proceeded to address the concerns before re-testing the functionality.
"We can confirm YourPlay is active on all Victorian machines that we operate, with ALH also offering voluntary pre-commitment at all venues on the mainland, as part of our national standard," Mr Donohue said.
In the commission's court action, ALH and an ALH executive officer will face charges for failing to ensure mandatory player equipment was installed under the Gambling Regulation Act.
The case is expected to come before Melbourne Magistrates Court in January.
21°C