Victoria’s VGCCC to start disciplinary proceedings against Crown

The disciplinary proceedings are related to the Victorian Royal Commission’s findings on Crown’s China Union Pay process.

Australia.- The new Victorian Gambling and Casino Control Commission (VGCCC) has announced one of its first actions – disciplinary action against Crown Resorts. The regulator is taking action over findings that emerged in the state’s Royal Commission into Crown on its China Union Pay process used to evade Chinese currency restrictions and enable the illegal transfer of funds. 

The VGCCC, which was launched on January 1, could impose a fine up to a maximum of AU$100m, modify Crown’s casino licence, censure the casino operator and order it to take rectification steps.

Fran Thorn, VGCCC chair, said: “I welcome the legislative amendments which impose stronger regulatory obligations on Crown and provide the VGCCC with greater enforcement powers. These powers are needed to deter Crown from engaging in the conduct that was revealed during the Royal Commission.

“As a first step, we are acting on the Royal Commission’s findings that Crown’s China Union Pay process breached important Victorian regulatory obligations, was illegal and constituted serious misconduct.”

The VGCCC said it will make further announcements after reviewing Crown’s response. Other matters highlighted by the royal commission will trigger further disciplinary proceedings.

Between 2012 and 2016, Crown Resorts used the Chinese bank card China UnionPay to allow international guests to use funds to play games at Melbourne casinos, according to the royal commission.

Crown Towers Hotel provided room bills to customers, falsely claiming that the hotel provided services. Customers used their China UnionPay card to pay the bill and receive a receipt confirming payment. Customers then, accompanied by Crown VIPs, brought the vouchers to the cage and exchanged them for cash or tokens.

Judge Raymond Finkelstein, who led the state of Victoria’s inquiry declared Crown Resorts unsuitable to hold a licence for its Crown Melbourne casino. However, the operator was allowed to keep its licence under stricter conditions.

An New South Wales investigation revealed that the Star Entertainment Group was running a similar system there allowing transfers totalling AU$900m.

Crown Resorts has also been deemed unsuitable to hold a licence for its Perth casino. However, again, the company will keep its licence under stricter conditions.

According to the final report from Western Australia’s Royal Commission into the operator, Crown Resorts failed to implement systems to detect suspicious transactions and allowed junket operators with criminal links to operate at the casino. Commissioners said Crown failed to minimise gambling-related harm and was not open and accountable in its communications with state regulators.

Tony Buti, WA’s racing and gaming minister, said the government had accepted key recommendations and would amend the state’s casino laws. Crown and its subsidiaries are undergoing a restructuring overseen by independent observers, which is expected to take about two years.