The Victorian Gambling and Casino Control Commission (VGCCC) has found that Crown Casino in Melbourne facilitated illegal funds transfers from China that produced some A$32 million in revenues for the casino. The fund transfers violated both Victoria’s Casino Control Act and the laws of China.
Crown has been levied a fine of A$80 million (US$57,483,600) as a penalty and to subtract from the corporation any profits it might have made from the illegal activity. Fran Thorn, VGCCC Chair noted that Crown had cooperated with the process.
She stated: “Crown’s CUP process was a clandestine, deliberate process, which not only breached the Casino Control Act but was also devised to assist patrons to breach China’s foreign currency exchange restrictions“.
Thorn continued: “Crown was aware of the risk that the CUP process could be illegal but decided to run that risk. In doing so, it showed no regard for upholding its regulatory obligations. Indeed, it went to some lengths to hide what it was doing.”
Under a corruption crackdown from Beijing, Chinese nationals were restricted to the transfer of no more than $50,000 to another country. Crown came up with a way for their Chinese customers to get around the limitation in order to gamble and eventually lose more money.
Billed for Hotel Services, Money Used to Gamble
From 2012 through 2016, the casino property would issue ginned up receipts for various hotel services. The Chinese customers would then pay the false bill using a China Union Pay bank card and get a voucher in return. The vouchers could then be exchanged for gambling chips to play in the casino.
Crown acknowledged the scheme as a “historic failing”, and stated: “Upon becoming aware of this historical conduct, Crown’s board immediately commissioned an independent investigation and shared the findings with the Victorian royal commission, the Victorian Commission for Gambling and Liquor Regulation (the predecessor to the VGCCC) and other regulators“.
“Crown’s board and senior management are committed to the delivery of a comprehensive reform and remediation program to ensure Crown delivers a safe and responsible gaming environment and continues to cooperate with the VGCCC on all matters arising from the Victorian Royal Commission Report.”
The $80m fine was record-breaking, showing the seriousness of the matter in the eyes of the VGCCC. The penalty comes close to the maximum possible fine that could be levied, which is $100m – an increase of a hundredfold from the Commission’s previous threshold of $1m that was in place until just last year.
The Commission recommended Crown be stripped of its license if it’s not able to reform by 2023. The Commission is still considering other disciplinary actions against Crown based on other violations and discrepancies that turned up in the royal commission’s findings.
Not the Only Casino in Hot Water
The Star Sydney is facing some of the same music as Crown in NSW, Victoria, and Western Australia faced recently when they were all found unsuitable to hold a casino license but were allowed to continue operating anyway, with guidance and compliance.
Public hearings have concluded that had been underway for two and a half months. Among other concerns, The Star is also seen as having cooked up a scheme to illegally transfer Chinese gambling funds into the property using China UnionPay cards.
Star is trying to get out ahead of the disciplinary portion of the exercise with several senior executives and directors including CEO Matt Bekier and Chairman John O’Neill being jettisoned ahead of the final report due at the end of August.
Some of the former directors received a tongue lashing by Naomi Sharp SC in her closing statements. Others, like former CEO Matt Bekier, received accolades for being so “frank and candid” when submitting evidence to the Commission.
Star has also suspended all international and domestic rebate play schemes.
Sharp lamented Star and Star Entertainment’s lack of a cohesive plan going forward to address their shortcomings in regard to compliance. She stated: “We submit that the evidence in the public hearing establishes that the Star is not suitable to hold the casino license and that its close associate Star Entertainment is not suitable either”.
Source: Crown Casino in Melbourne fined $80 million for illegal China Union Pay scheme, Abc.net.au, May 31, 2022