Australia’s Crown Resorts is facing new claims of money laundering, involving its practice of taking credit card payments in exchange for gaming chips or cash at Crown Melbourne in Victoria. The purported incidents took place between 2012 and 2016.
A royal commission in the state heard testimony from the company’s chief financial officer, who conceded that the books would not only show indications of money laundering but that the total could exceed the AU$160 million (US$119.7 million) already identified.
According to reports, concerns over the practice only came to light in March, with the commissioner claiming Crown knew of the practice but “simply didn’t care,” to failing to report suspicious transactions and issuing fake invoices. All this has unfolded as Crown executives continue damage control for the scandal-plagued company, which was denied a license to run its casino in Sydney, New South Wales and conceivably could lose its licensure in Victoria as well.
In another black mark for Crown, the Australian Financial Review reported that a social worker told commissioners that a client played baccarat at Crown Melbourne for 96 hours—four days straight—and actually napped at the slot machines. Crown employees did not intervene; at the time, the company employed just 12 responsible gaming staff to oversee the entire property. That number has since been increased to by 70.
In addition, Crown Melbourne CEO Xavier Walsh said he knew about an alleged $200 million tax underpayment in 2018, but only started investigating it the day after the investigatory commission was formed.
Commissioner Raymond Finkelstein told Walsh, “It couldn’t have bothered you that much because you did nothing,” he said. “I’m trying to come to grips with why you did nothing from 2018, like three years. I need an answer to the question.”
Counsel Adrian Finanzio told Walsh he only acted because he had to. “You were concerned this issue, which you’d known about since 2018, might be exposed in this royal commission,” he said. “It was that which prompted you to … do the numbers.”
Walsh disagreed, saying he disclosed it as part of Crown’s pledge to overhaul its culture under Executive Chairwoman Helen Coonan, who came on in February following the resignation of CEO Ken Barton and directors Guy Jalland, Michael Johnston and Andrew Demetriou.
The commission heard that Crown didn’t think the deductions would be “noticed” by the regulator because of other changes to the casino’s tax rates. “I wouldn’t say they concealed the deductions, but they certainly weren’t candid in terms of highlighting them,” Walsh said.
Meanwhile, according to Asia Gaming Brief, the Victorian government is being asked to end a questionable deal that entitles Crown Resorts to millions in compensation if the government changes how the casino can operate. Under “regulatory certainty” clauses inserted into Crown’s commercial agreement with the state in 2014, the operator is entitled to up to $200 million in taxpayer money if the government lowers maximum bet limits or calls for new pre-commitment requirements.
Victorian Greens leader Samantha Ratnam said the compensation clause was “outrageous” and needs to be abolished.
“The government should already be preparing to rip the contract up, to make sure Victorians aren’t liable for Crown’s corrupt behavior,” she said.
Opposition shadow gaming minister Steph Ryan added that there is “nothing in Crown’s contract which entitles them to break the law” and the government should “put aside its cozy relationship with Crown.”
Crown’s new CEO, Steve McCann, who joined the company in June, admitted that the company had likely underpaid the tax it owed the government but said the amount due was closer to A$8 million.
During the testimony, McCann stated that he is working more than 14 hours per day trying to reconstruct the company’s reputation, but that it is “simply not possible” for one person to transform Crown.
Victorian Premier Daniel Andrews told the press that the possibility of Crown Melbourne losing its casino license is “very real.”
McCann became emotional during his testimony, saying, “There is a very significant population of Crown [employees] who are crying out for the ability to speak up, the ability to be involved, to restore the pride in the organization that they used to feel but that is currently a challenge because their family and friends are struggling with what’s going on.”
“I’ve told staff they should not do … something that is inconsistent with their values.”
