VCGLR Issues $1M Fine on Crown Resorts
The Victorian Commission for Gambling and Liquor Regulation (VCGLR) hit Crown Melbourne with a $1 million fine relating to Crown’s conduct with junket operations. $1 million is the maximum fine the Casino Control Act 1991 allows.
VCGLR investigated Crown Melbourne following the damning Bergin Inquiry. The inquiry opened a proverbial can of worms, resulting in several Crown board members resigning from their roles. The report highlighted the use of junkets and associated money laundering happening at Crown’s Melbourne property. VCGLR completed its investigation and opted to impose the maximum possible fine, $1 million.
The VCGLR concluded Crown’s processes were not robust. Failing to maintain sufficient records relating to the use of junkets were among several Crown failings. The failings are so severe the VCGLR levied the maximum fine, in addition to prohibiting Crown from recommencing junket operations until given the green light by the commission.
Ross Kennedy is the VCGLR Chairman who authorised the fine. He spoke via a press release.
“That fine reflects the seriousness of this matter and the fact that Crown’s failure to implement a robust process occurred over an extended period. Robust processes must be implemented to ensure that Crown’s Melbourne casino remains free from criminal influence and exploitation. These are strict and legislated regulatory requirements, and this is an area where Crown has repeatedly failed.”
Crown Executive Chairman Responds to VCGLR Fine
Under fire Executive Chairman of Crown Resorts, Helen Coonan, responded to the VCGLR’s fine and comments.
“Crown continues to engage with the VCGLR and the Victorian Government in relation to its reform agenda. These reforms and changes to our business are aimed at delivering the highest standards of governance and compliance as we restore public and regulatory confidence in our operations.”
“As part of this reform agenda, Crown has already ceased dealing with all junket operators.”
Crown ceased activity with junket operators in mid-November 2020, although not entirely. The Aussie casino giant announced the cessation of junkets before the publishing of the Begrin Inquiry’s report.
However, a line of text stood out like a fly in the ointment: Crown is only stopping using junkets until June 30, 2021. The massive VCGLR fine and the comments about junkets make that date pointless.
The Gaming and Wagering Commission of Western Australia banned Crown Perth from using junkets in February 2021. The ban covers gambling activities with non-Australian residents “with whom Crown Perth has an arrangement to pay the patron a commission, or provide transport, accommodation, food, drink, or entertainment, based on the patron’s turnover.”
Crown Perth Temporarily Closes Its Casino
The past week has been another for Crown to forget. It received a record $1 million fine from the VCGLR and temporarily closed the doors on its Perth casino.
The Western Australian Government ordered a three-day lockdown of the Perth metropolitan area from April 23 until April 26. The lockdown is in relation to a COVID-19 outbreak in Western Australia.
A new lockdown is scheduled for April 27 through May 1, resulting in the following operations remaining closed.
- Gaming activities
- Food & beverage, theatre, banqueting and conference facilities other than for the provision of takeaway meals or meal delivery services
Crown Perth’s hotel accommodation and ancillary services continue but at a reduced capacity.
Shares in Crown are currently trading at a 52-Week high, although the price is artificially inflated. Takeover interest from Blackstone Group and Oaktree Capital pushed the share price north of $12.20.
Blackstone offered Crown $8.02 billion for a complete takeover of all Crown shares. Crown shares surged 21.4% following news of Blackstone’s interest.
Oaktree is the latest asset management firm to throw its hat into the ring, albeit in a different guise. Oaktree offered to purchase some or all of James Packer’s 37% stake in Crown in a deal worth up to $3 billion. Crown or Packer is yet to accept either bid.