An independent investigation into the gambling regulatory body of the state of Victoria has recommended Parliament to suspend junket operators that lure foreign high-roller gamblers to local casinos.
Recently, Australian gambling giant Crown Resorts has been put under fire by both media outlets and authorities over its links to junket operators that have been bringing affluent Asian gamblers to casino venues in the state. By using the services of junkets, high-rollers have been visiting Melbourne casinos but some of the junkets had been linked to criminal organisations and posed a great risk of money laundering.
The junket operations have been extremely important for Victoria’s Royal Commission that investigated Crown Resorts’ operations and is, on October 15th, expected to issue its report on whether the Australian gambling giant should be allowed to keep its operating licence in the state. However, the state’s Royal Commission has not been given the responsibility to examine the Victorian Commission for Gambling and Liquor Regulation (VCGLR) and the Government has been criticised for this decision.
An independent report issued by QC Ian Freckeltol was commissioned after media reports raised the red flag that the state’s gambling watchdog had failed in its role of regulating Crown Resorts.
According to the findings of Dr Freckleton’s probe, internal practices of the regulator for auditing the Australian gambling giant did not function in 2013 and 2014. The investigation also found that the VCGLR’s internal compliance systems were also inadequate, with the regulator failing to share information with the police.
Crown Melbourne’s Internal Control Statements Regarding Junket Operators Found Inadequate
For years, both the state Government and the Victorian Commission for Gambling and Liquor Regulation have faced criticism for not examining and inspecting Crown Melbourne properly and failing to detect risks of money laundering practices.
Now, the independent investigation of Dr Freckelton criticised the regulator’s rules and explained that it was the casino company rather than the VCGLR that is supposed to carry out probity checks over its high-roller customers. Still, the report states there had been improvements in the casino practices since December 2020. Reportedly, the probe found that the casino’s internal control statements had been greatly inadequate when it comes to probity requirements for junket operators, junket players and VIP players in the past. At a later stage, they were found to have raised consciousness over the VCGLR inspectors’ audit checklist tools.
Five whistleblowers have shared that their supervisors had turned a blind eye to their suspicions about possible illegal activity at the Crown Melbourne casino.
Dr Freckelton’s investigation was unable to find evidence that Crown Casino exercised undue control or influence over the activities of the inspectors from Victoria’s gambling watchdog. Furthermore, the probe did not find proof that the VCGLR instructed inspectors at the casino venue that they had not been responsible for acting on criminal activity found at Crown Melbourne. In his report, Dr Freckelton also said there is no evidence that the VCGLR management had actively blocked inspectors from money laundering checks at the Crown Resorts’ casino in Melbourne.
The report of Dr Freckelton says better processes for sharing information with the police were needed. The investigator also recommended that a larger number of inspectors are entitled to scrutinise the casino.
Independent Investigator Recommends Further Action against Junkets
The Australian gambling giant has admitted that its bank accounts were used for money laundering. In recent years, Crown Resorts faced AU$1-million fine for violating rules, which is the maximum penalty that could be imposed on the operator.
The company’s relationship with overseas junket operators was one of the main reasons why the investigation of Commissioner Bergin in New South Wales recommended that Crown Resorts is stripped of its Barangaroo licence in Sydney. Since then, the gambling company no longer uses the services of junkets.
Further action on keeping junket operators away from the Australian gambling market was recommended by Dr Freckelton. According to him, the “inherent and inescapable” flaws of the junket system were among the main reasons why junkets need to be formally blocked from getting involved in the local gambling sector.
He believes that the local legislature needs to consider whether a maximum fine of AU$1 million is enough of a penalty for a commercial operator the size of Crown Resorts and urged the competent authorities to reflect on the potential adoption of stricter measures to prevent further violations across the sector.
- Author
Daniel Williams
