Crown Resorts Savaged Anew With A$120m In Fines, Warnings

November 7, 2022
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The Victoria state casino regulator has punished Crown Resorts anew with fines totalling A$120m ($77m) for serious and illegal misconduct, but growing regulator anger over current management’s “recidivism” may bode much worse for Crown’s survival.

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The Victoria state casino regulator has punished Crown Resorts anew with fines totalling A$120m ($77m) for serious and illegal misconduct, but growing regulator anger over current management’s “recidivism” may bode much worse for Crown’s survival.

The Victorian Gambling and Casino Control Commission (VGCCC) on Monday (November 7) announced fines for Crown Resorts of A$100m and A$20m, respectively, for failing to prevent harmful gambler behaviour and failing to follow an order banning tampering of slot machines by customers.

A 76-page VGCCC report found that Crown breached its Responsible Service of Gambling Code of Conduct by “consistently failing to intervene” when customers gambled for “long periods without a break, sometimes for more than 24 hours”.

Crown also “failed to comply with a statutory direction” from the VGCCC’s predecessor to “prevent patrons from using plastic picks and other devices to simulate ‘automatic play’ … on certain electronic gaming machines”.

VGCCC chair Fran Thorn said in a statement that Crown had failed over a long period to minimise potential harm to customers, their friends and family.

“These were not isolated breaches,” she said. “They were part of a pattern of extensive, sustained and systemic failures by Crown that spanned roughly 12 years.”

Thorn warned that the new fines sound a warning to the entire gambling industry to honour its duty to harm minimisation, and that “the industry can expect further action from the commission on this matter”.

The VGCCC ordered Crown to pay the fines and regulator costs within 28 days, as well as banning two defunct “red carpet” and “bingo” programmes that targeted elderly customers and any similar programme targeting at-risk groups.

The new fines follow a VGCCC fine of A$80m for Crown in May this year over misuse of the China UnionPay bankcard to disguise casino transactions.

The offending matters and fines all derive from incidents probed by a Royal Commission into Crown Melbourne and other regulatory investigations and whistleblower allegations.

But the report also contains numerous regulator accusations of “recidivism” and bad faith at the company’s highest levels that suggest the state’s largest private employer is in a much more dangerous position than industry observers believed.

The company is currently locked in a two-year probationary phase, at the end of which the regulator must decide if Crown has regained suitability to operate its casino licence.

If, after considering a report by Crown’s government-appointed special manager, the answer is no, then the VGCCC is obliged to cancel the licence.

Almost a year into that period of probation, today’s report attacked Crown management and its board on several fronts affecting suitability, particularly lagging reforms in responsible gambling.

The “information Crown Melbourne has provided during this matter can be summarised as providing a lot of detail about how little has been done. Much of that detail is a description of activities undertaken rather than outcomes pursued and achieved,” the report said.

However, it also criticises Crown for its responses to the VGCCC probe into its serious and illegal conduct.

The report says Crown made submissions “not supported (or contradicted) by the evidence”, failed to adequately assist the VGCCC in its probe and made “assertions about the law” without supporting evidence.

These problems are “redolent of the old Crown, which Crown Melbourne keeps saying it wishes to leave behind".

“If the submissions in this matter represented the total of the work being done, then the commission would have reason to be concerned.

“Crown Melbourne must do better in its dealings with the commission, including in respect of important matters such as its approach to disciplinary proceedings and the production of information when the commission exercises its compulsory powers.

“It must demonstrate to the commission by its actions that it is moving, or has moved, towards suitability.”

Several sections of the report present scathing analysis of Crown’s reform-era engagement with the VGCCC, particularly of a Crown submission that doubted the regulator’s disciplinary power relating to deterrence.

The report all but accuses the company of sophistry, adding that the submission was “an unnecessary distraction and one that should not have been made”.

In this and other areas, “Crown Melbourne’s approach” to regulatory guidance and Royal Commission recommendations “is just a further example of the same type of conduct described in the relevant [Royal Commission] case studies”, it says.

The report adds that some of Crown’s expressions of remorse and contrition are not “genuine”, are contradicted by its ongoing failures to fully communicate with the regulator and the delay in making them only after being forced to reform.

“The commission has formed the view that Crown Melbourne’s very late statements of remorse are incapable of altering the general and specific deterrence that would otherwise be required,” it said.

Overall, the report warns Crown directors and managers that their company cannot continue with such conduct.

“The board and senior executives of Crown Melbourne cannot disassociate themselves from the inappropriate and unhelpful submissions that have been made in this matter.

“The board also cannot disassociate itself collectively from the conduct of senior executives or lawyers insofar as its approach to this matter is concerned.”

A$200m in fines may not be the end of such punishment for Blackstone Group-owned Crown, with Thorn warning in her statement that the VGCCC is still investigating other findings of the Royal Commission.

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