Crown Resorts opens Sydney Casino despite alleged wrongdoing

On Aug. 8, the Crown Sydney VIP casino opened its doors to patrons. This property, long in the making, was initially scheduled to begin operations in December 2020. However, one scandal after another came to light regarding the less-than-savoury business practices of parent company Crown Resorts. This delayed the opening of Crown Sydney for a couple of years until it was finally permitted to proceed earlier this month.

Crown's Misdeeds Revealed

The first serious revelations of Crown's wrongdoing came in July 2019 when “Crown Unmasked” hit the airwaves. This was an exposé produced by 60 Minutes Australia, The Sydney Morning Herald, and the Age.

What they found was startling and involved misdeeds centred around the practice of junkets. These are special trips arranged to bring in high-stakes gamblers from specific parts of the world to Crown's brick-and-mortar gambling facilities. These junket operators are mostly third parties and not controlled directly by Crown management.

Crown supposedly hired known criminal organisations to conduct junkets most of which targeted Chinese gamblers. So eager was Crown to promote these junkets that 19 of its employees were arrested by Chinese authorities in October 2016 on charges related to gambling promotion offences. All of them pleaded guilty and 16 received prison sentences of less than a year.

Money Laundering

Crown assisted high-rolling customers with moving money across international borders often in contravention of the law. Footage from “Crown Unmasked” appeared to show bricks of currency notes being delivered and unloaded at the cashier in Crown Casino Melbourne. The bills were contained in a grocery bag.

Much of this questionable cash allegedly came from members of Chinese triad gangs who were laundering the proceeds from drug sales and other illegal transactions. By taking their dirty cash to the casino and playing with it for a short time, they could then claim the entire sum that they had remaining as winnings thus disguising its less-than-honest origins. Failures in Crown's anti-money laundering procedures made this possible.

Visa Fraud and Possible Human Trafficking

Crown supposedly helped these same shady individuals circumvent Australian immigration law by recommending them for visas. This activity was facilitated by a now-abandoned government program that allowed Crown to apply for “fast-track” visas on behalf of its foreign customers. Crown junket flights coming into Australia also reportedly transported sex workers, some of whom were being trafficked illegally, to service the gamblers.

Response

Crown denied that it had committed any wrongdoing. The firm's board of directors took out full-page ads in several publications entitled “Setting the record straight in the face of a deceitful campaign against Crown.” Within this text, the company charged the filmmakers with “sensationalised reporting…based on unsubstantiated allegations, exaggerations, unsupported connections and outright falsehoods.”

Crown Fired Back Against the Filmmakers With This Ad

However, the majority of the public wasn't buying Crown's story. Pressure began to build for a full-scale investigation into Crown's business practices. Typical were the remarks of independent MP Andrew Wilkie who said, “This has reached a point where the Australian government has to pay attention.”

Government Inquiries

Although calls for a national investigation into Crown were defeated at the federal level, three states moved forward with their own inquiries: Victoria, Western Australia, and New South Wales. These proceedings uncovered tons of other troublesome information regarding Crown and its operations.

For instance, during testimony in front of the Independent Liquor and Gaming Authority of New South Wales, the chairman of Crown's risk committee, Geoff Dixon, stated that there had been no anti-money laundering training during the 12 years he had been with the company. During the same inquiry, it emerged that several major banks stopped dealing with Crown accounts because they had detected multiple deposits into these accounts that appeared to be structured so as to avoid financial reporting requirements.

Former chairman and well-known billionaire James Packer testified via video in front of Western Australia's Perth Casino Royal Commission. He admitted that during the final three years of his chairmanship, from 2013 to 2016, he did not attend a single board meeting. He claimed not to have been aware of the shady activities of the junket organisers until the 19 Crown employees were arrested in China in 2016. When asked repeatedly about how the corporate structure of Crown Resorts was set up, Packer claimed, “I may well have known these things in 2006. I can't remember now.”

Former Crown Chairman James Packer With Ex Mariah Carey

Fallout

It's fair to say that the results of the various inquiries regarding Crown did not turn out exactly in its favour. In fact, all three of the state governments involved found that Crown Resorts was not fit to hold a gambling licence. The conclusion of the report from Victoria's inquiry, for example, stated:

The finding that Crown Melbourne is no longer suitable to hold its casino licence was inevitable. The conduct it engaged in for over a decade was so disgraceful that no other conclusion is possible.

Yet, counterintuitively, none of these states, including Victoria, took the step of revoking Crown's licence! That's right, after having explained, in very strong terms, that the corporation was not suited to running gambling operations, they seemingly ignored their own conclusions by failing to revoke Crown Resorts' licences!

What Did the States Decide?

Victoria, rendering its verdict in October 2021, instead decided to give Crown two years to get its act together. Among the steps demanded was that James Packer and other major shareholders divest their stock holdings until nobody owned more than 5% of the company. Also, the government would appoint a supervisor during the probationary period to ensure that the necessary changes were made.

Similarly, Western Australia in March 2022, instead of terminating Crown's licence, called for an independent monitor to oversee Crown for the next two years. After this time, the monitor would make a recommendation to the Gaming and Wagering Commission. The report of the Perth Commission also contained many recommendations as to maximum bet limits, weekly patron loss limits, and other changes to the gaming floor.

New South Wales perhaps imposed the stiffest punishment to Crown when it held, in February 2021, that Crown was unfit to operate a casino in Sydney. This put a halt to plans that the enterprise had of launching its already-built new property in that city. However, in June 2022, after much corporate restructuring, Crown was issued a provisional licence, which allowed it to open Crown Sydney in August 2022.

Crown Makes Adjustments to Please Regulators

In the past couple of years, Crown Resorts has made a number of alterations to its corporate arrangements in order to make itself more appealing to the authorities. As early as September 2021, Crown voluntarily elected to stop dealing with junkets until July 2021. However, this attempt to appease regulatory bodies was too little too late.

Since then, CEO Ken Barton was replaced in August 2021 by Steve McCann whose goal was to reform the company and its culture. Then in June 2022, U.S. equity firm Blackstone announced that it had completed the purchase of Crown Resorts for $8.9 billion ($US 6.3 billion). James Packer received a payout of $3.3 billion ($US 2.2 billion) in exchange for his shares in the company.

A month later, Blackstone revealed that McCann was leaving the CEO role and would be replaced by Ciarán Carruthers, former COO of Wynn Macau. It is hoped that this and other personnel changes will satisfy regulators that Crown is now being run by a completely different team than it previously was.

New Issues Emerge

Even as Crown deals with the consequences of the various inquiries into its business transactions, it's still getting into trouble with the authorities. In March 2022, the Australian Transaction Reports and Analysis Centre began court proceedings against Crown for its many violations of various anti-money laundering laws. Then in May, it received a fine of $80 million ($US 57 million) for a scheme involving China Union Pay bank cards, which were used to allow Chinese gamblers to circumvent currency control regulations from 2012 to 2016.

While Crown Resorts attempts to put the past behind it, new information keeps popping up about its shady dealings from years ago. Even if Crown really has turned over a new leaf, we expect skeletons from its past to still emerge from time to time to haunt its current business ventures.

New Casino Comes With Conditions Attached

As we've mentioned, a new Crown Casino has begun doing business in Sydney. However, it is subject to certain conditions, which is a testament to the distrust in which the company is held. Some of these rules are:

• The casino is only open to residents of the resort, hotel guests, and members of the two highest levels in the Crown Rewards program (Black and Platinum)
• Table games, including electronic table games, are allowed, but there are no pokie machines
• All casino patrons will have to undergo comprehensive checks
• Each customer is limited to 12 hours of gaming per day and 48 hours per week

The Crown Sydney Resort Casino

The New South Wales Independent Liquor and Gaming Authority will observe how well Crown Sydney follows these and other stipulations of its conditional licence. After 18 or 24 months of good behaviour, there's the possibility that this licence will become a permanent one.

Crown and Poker

Though its main focus is on traditional casino gaming, like the pokies and blackjack tables, Crown is also involved in poker. Both Crown Melbourne and Crown Perth offer the game, and Crown Melbourne is indeed the host of the annual Aussie Millions Poker Festival although this premier poker event was not held in 2021 due to COVID-19, and no schedule has been yet announced for the 2022 Aussie Millions.

Online Poker Available in Australia Today

Whether you live too far away from your nearest live poker room or you wish to distance yourself from the tarnished operators of the same, online poker represents a reasonable alternative. You'll be able to play from the comfort of your home. Despite the efforts of the overzealous Australian Communications & Media Authority, there still remain several reputable offshore poker sites that happily accept Australian customers.

You can find out more about your online card game options by checking out this page devoted to online poker in Australia.