The gambling regulatory body of Victoria has implemented new laws, under which it will be able to levy fines worth up to AU$100 million to start disciplinary action against Crown Resorts for illegally masking some patrons’ casino expenses as hotel accommodation spending.
This is the first action taken by the Victorian Gambling and Casino Control Commission (VGCCC) and the move is based on the findings of the state’s Royal Commission about Crown Melbourne’s casino transgressions. The action, however, will probably not be the only one, as the regulator has promised there will be more to come.
As revealed by the state’s gambling regulator, on April 5th, Crown Resorts was officially informed of the proceedings against it. The VGCCC also noted that it would consider the response of the Australian gambling giant before making a further announcement on the issue.
In October 2021, Royal Commissioner Ray Finkelstein issued a report about the findings of the then-held probe into Crown Resorts. At the time, the investigation found that the Australian gambling giant allowed Chinese high-roller customers to use their China UnionPay (CUP) cards to illegally transfer money to fund their gambling, with the transactions being disguised as payments for hotel accommodation services offered by Crown.
As part of the scheme, a room charge bill was issued by the hotel to falsely assert that the hotel had provided accommodation services to the holder of the bill. However, after the bill was paid, the patron was given a voucher they took to the cage and exchanged it for chips or cash.
The Scheme to Circumvent Chinese Currency Controls Used by Crown Resorts Resulted in Enhanced Regulatory Powers
According to the findings of the investigation, Crown Melbourne started allowing customers to use this scheme as a method to circumvent Chinese currency controls in 2012 at the latest.
Also, the evidence gathered by the inquiry has shown, that employees of Crown Resorts raised concerns that the practice could facilitate money laundering but this did not stop the gambling operator from allowing patrons to use the method until after 2016 when a number of staff members of Crown got arrested in China on allegations of illegal promotion of gambling services.
Royal Commissioner Finkelstein reported that affluent Chinese casino platforms were facilitated to illegally transfer up to AU$160 million in funds from their country to Australian casinos. This was actually one of the main reasons why Crown Resorts was found unsuitable to continue holding its casino operating licence. The Australian gambling giant, however, was given one last chance to prove it can change some foul practices that had made Crown Resorts unfit for the authorities’ trust, so it was allowed to continue running its Melbourne operation under stricter conditions.
After the Royal Commission of Victoria issued its findings in a report, the Andrews Government unveiled new laws under which, the local gambling regulator is allowed to take disciplinary action against Crown Resorts based on the findings that the company had been involved in serious misconduct. As a result of the changes, the Victorian Gambling and Casino Control Commission boosted the maximum fine that could be imposed for such transgressions from AU$1 million to AU$100 million.
According to Fran Thorn, chair of the VGCCC, the expanded powers were necessary to make sure that Crown Resorts was deterred from engaging in further illegal actions like the ones that had been unveiled by the Royal Commission.
- Author
Daniel Williams
