How should i approach the subject?

all i can say is talk to her parents about it, because they are ones in control of her. maybe you should give them advice about punishing her the right way. you probably have the ability of being more observant then they can, so tell them. but the moment she turns 18 i would kick her out of the house, if she can't get the message then maybe she should just stay out and learn from her mistakes herself.