Victoria Gambling Regulator Gives Crown $1 Million Fine

Victoria’s gambling regulator has given Crown Resorts (ASX: CWN) a $1 million fine for its failure to properly vet high-roller junket tour operators for criminal links and other probity issues.

The company’s dealings with junkets, which bring extremely wealthy, mainly Chinese gamblers to the Melbourne and Perth casinos, has caused huge problems for Crown Resorts. In 2019, The Sydney Morning Herald revealed that some of the operator’s most important junket partners had strong links to major organized crime syndicates.

The revelations resulted in the long-running Bergin Inquiry in NSW, which in February found that Crown was unfit to hold the license for its new Sydney casinos. There are currently royal commissions underway into Crown’s licenses in Melbourne and Perth.

Furthermore, the revelations also caused Victoria’s Andrews government to order an urgent review into the company. The review lasted 14 months and resulted in the VCGLR issuing a show cause notice to Crown in October 2020 due to poor due diligence checks on its junket partners.

Now the regulator has ruled that the casino was in breach of its regulations by failing to implement a “robust process to consider the ongoing probity of junket entities”. In its report, the VCGLR went on to say that the commission concluded, “that in respect of the analysed individuals, the processes implemented by Crown were not robust, as required [in Crown’s regulatory agreements]”.

Furthermore, Crown also failed to collect the information required about its junkets partners to assess their probity, and it failed to document how it decided which junkets to work with.

Crown is also facing the possibility of an enforcement investigation from the financial crimes watchdog AUSTRAC. It is thought to have broken money-laundering laws, and analysts believe this could cost the operator up to $100 million in fines.

The VCGLR has now banned Crown from working with junkets until it has proved to the body that it has improved its due diligence procedures. However, the regulator has decided not to publish the detailed reasons behind its findings as Crown has claimed that criminals may be able to make use of the “valuable information” in order to launder money at its casinos.

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