The regulatory and enforcement pressure on Australian gambling giants has continued to increase over the last few months. State authorities have started inquiries and investigations into the biggest casino and gambling companies in the country – Crown Resorts and its local competitor Star Entertainment – placing legal hurdles for their businesses to continue operating in Australia.
In fact, the last couple of years have been particularly hard for the companies, after the two aforementioned companies faced some allegations of links to criminal organisations, money laundering, social responsibility issues, poor corporate structure and management, as well as the use of so-called junket operators to bring affluent foreign gamblers to their Australian casinos.
After facing the merely unfavourable financial effects of the border closures as a result of the Covid-19 pandemic outbreak, both casino and gambling operators have been trying to return to their pre-pandemic levels, with fewer visitors entering their gambling premises. The economic turbulences that were triggered as a result of the global coronavirus pandemic, however, have not been the only issues faced by the gambling giants.
As mentioned above, both Crown Resorts and Star Entertainment have been criticised over an alleged poor corporate structure that has eventually resulted in massive failures in terms of crime penetration, anti-money laundering and other issues. The two companies saw a number of executives and managers file their resignations during the investigations in their operations or as a result of the probes because the renewal of their corporate structure from scratch has been considered one of the major changes that need to be made in order for Crown Resorts and Star Entertainment
Crown Resorts Faces New Investigation for Providing Credit in Return for Bank/Blank Cheques
If someone has ever thought that the turbulence for Crown Resorts will end as soon as the company has been acquired by the US private equity giant Blackstone for AU$8.9 billion, that is hardly the case here.
Only a few days ago, it became clear that the casino watchdog in the state of Victoria has taken regulatory action against Crown Resorts for the third time in 2022. As Casino Guardian previously reported, the Victorian Gambling and Casino Control Commission (VGCCC) started a probe into the use of blank and bank cheques by gamblers. The investigation could eventually result in a monetary fine of up to AU$100 million.
The latest allegations faced by the Australian gambling giant have led to an investigation into the company’s operations after the Royal Commission in the state of Victoria found that Crown Melbourne breached state laws by providing credit to gamble. One of the foul practices that are currently under investigation involves the exchange of a bank cheque for gambling chips, while another involves the provision of casino patrons who handed a blank cheque with chips. According to findings of the state’s Royal Commission, high rollers were permitted to do so at the start of their gambling session, while the amount they owed was written in at the end of the gambling session.
As confirmed by Fran Thorn, the chair of the VGCCC, the Royal Commission’s investigation found that Crown Resorts adopted some practices involving the use of bank cheques and blank cheques – a move that breached the restrictions on extending credit.
The latest revelations about the company may lead to a fine of AU$100 million being imposed on the company. A few months ago, in May, the state’s gambling regulator fined Crown AU$80 million for permitting its casino patrons to mask their gambling expenditures as spending on travel and accommodation expenditures using China Union Pay cards.
The Australian gambling giant promised to provide its full cooperation to the Victorian gambling regulator on any issues that emerge as a result of the report that the Royal Commission handed in at the beginning of the month. A representative of the casino giant has pointed out that Crown Resorts has already implemented some major reforms and changes to its business model to address the recommendations made by state Governments and regulatory bodies.
Star Entertainment Waiting to See NSW Gambling Regulatory Body’s Report
Crown Resorts’ main competitor in the Australian casino and gambling sector – Star Entertainment – has also faced a series of probes and investigations following some concerns that the operator could be unsuitable to hold its casino licences.
At the beginning of the month, the NSW Independent Liquor and Gaming Authority (ILGA) received the much-awaited report into alleged questionable practices at the Star Entertainment’s casino in Sydney. The alleged transgressions varied from links to organised crime to money laundering. The company was also accused of links to the notorious junket operator Suncity, the controversial use of Chinese debit cards for gambling, the misleading of banks, as well as the operation of Salon 95 – an illegal cage that was especially aimed at high-roller gamblers.
At the time when the report was handed to it by Commissioner Adam Bell, the state’s gambling regulatory body did not set a specific date when the report regarding the Australian gambling giant’s fitness to hold a casino licence would be made public.
As shared by the Independent Liquor and Gaming Authority, Wexted Advisors was appointed as an independent expert to monitor and observe the operations and internal procedures of Star Entertainment.
The state’s Commissioner handed the report in following a review involving a month and a half of public hearings into the Sydney casino of the operator, with lawyers assisting the investigation saying that the company was unfit to hold a casino operating licence. The inquiry in the state of New South Wales was called after several local media hubs published materials accusing Star Entertainment of fraud, foreign interference at its gaming facilities, links to organised crime and money laundering.
Apart from the probe into the company’s operations in New South Wales, the inquiry into Star Entertainment’s business triggered a shareholder class action that was filed against the company by the law firm Slater and Gordon. Furthermore, the company is now facing a similar probe into its two casinos in the state of Queensland, after a regulatory review also unveiled certain questionable operational practices.
- Author
Olivia Cole
