The Victorian Commission for Gambling and Liquor Regulation (VCGLR) has renewed the gaming license of Australia-based Crown Resorts to operate its Crown Melbourne casino.
This was the sixth review of the casino since it opened. The regulatory deemed Crown Melbourne “suitable to hold its license” although it made 20 operational recommendations, which included compliance issues having to do with “Your Play” and lack of documenting play from overseas junkets. It also criticized the company for “failures of governance and risk management, contributing to compliance slippages.”
“These matters could have been avoided if sufficient attention to the requirements of the regulatory regime had been paid,” said the commission’s report.
The review also stated: “The business of the Melbourne Casino is generally conducted in compliance with obligations under laws and the Transaction Documents and the casino operator is generally compliant with its regulatory obligations.”
There could be trouble ahead for Crown, however, due to the arrest in 2016 of 19 Crown Resorts employees in Shanghai, China. The employees were jailed for nearly a year. The commission said it is investigating this affair and so hadn’t taken it into account in the periodic review.
Crown accepted the recommendations, including the order that it create “new or refreshed” procedures for dealing with gambling addicts. The regulator had scored Crown for its lack of innovation in that area, “such as might now be required of a world-leading operator to meet heightening community and regulatory expectations.”
In the five-year period since the last review Crown has invested A$447 million to upgrade and expand the facility. During that same period it has also incurred record amounts of fines for gaming law violations, including a fine of US $221,000 in 2017 for removing betting options from poker machines without approval from the regulator. Over five years the casino was fined $414,000 for eight violations, including several involving allowing minors to gamble.
The casino has also come under increased scrutiny for allegedly not following Victoria’s anti-money-laundering regulations. Crown has denied the allegations. During that same period Victoria police say more than a dozen drug deals were recorded occurring in the casino. They also found weapons on the property, including in hotel rooms.
Reacting to the approval of the license, and the recommended changes, Crown chairman John Alexander commented, “Crown recognizes the importance of responsible gaming measures to the future of the industry and is committed to further engagement with relevant stakeholders and development and refinement of its responsible gaming program informed, as far as possible, by research and expert opinion.”
Alliance for Gambling Reform spokesman Tim Costello criticized the commission and its 209-page report. He said the commission should have forced more reforms on Crown. He said, “Crown was criticized for its performance in a number of areas such as governance, regulatory compliance and responsible gambling, but the sanction from the VCGLR was overly focused on reviews, rather than specific actions or changes to license conditions.”
The last 24 months have been exciting, but in a bad way, for Crown. In addition to its 19 employees being arrested in China, and the break-up with its erstwhile Macau partner Melco Resorts, Crown was also forced to give up its planned Alon project in Las Vegas. In addition it has been accused of illegal conduct by Australian federal MP Andrew Wilkie. The commission review examined those accusations, which included slot machine tampering, allowing drug use and covering up for domestic violence, among others. It found that the accusations were not supported by the evidence. Its investigation included auditing the machines at the casino.
The commission noted that its investigation into the arrests in China have been delayed due to a class action lawsuit shareholders filed against the company last year. It alleges that Crown failed to comply with disclosure obligations and engaging in misleading and deceptive conduct related to its Chinese operations. The court documents were not included in the report. “[T]he VCGLR has not taken into account, in forming the opinions required by section 25 of the Casino Control Act, anything of what has been learned to date in respect of the detention of the 19 Crown staff in China.”
It added, “The VCGLR will continue with its investigation and, at the appropriate time, will assess whether the events in China give cause for regulatory action.”
