Crown Melbourne’s Illegal Money Transfers Could Cost AU$100m

Crown Resorts is facing a sanction of up to AU$100 million ($75 million) for violations of the Casino Control Act related to the illegal transfer of funds from China via China UnionPay cards.

New Disciplinary Action against Crown Melbourne

The Victorian Gambling and Casino Control Commission (VGCCC) launched the new disciplinary action against the troubled casino operator based on the findings of the Victorian royal commission last year.

VGCCC chair Fran Thorn outlined the gambling regulator needs these powers “to deter Crown from engaging in the conduct that was revealed during the royal commission,” namely disguising casino spending as hotel expenses.

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

Fran Thorn, Chair, VGCCC

Tabled in the state’s parliament in October last year, the report by the royal commissioner Ray Finkelstein revealed a scheme involving China UnionPay card transfers which enabled Chinese high-rollers to evade the currency restrictions imposed by China by masking the fund transfers as payment for accommodation at Crown Towers, one of the three Crown Melbourne’s hotels.

Disguising High-Rollers’ Casino Money as Hotel Expenses

Finkelstein stated in the report that “the hotel issued a room charge bill to the patron, falsely asserting that the hotel had provided services to the person.”

“The patron would pay the bill and be given a voucher acknowledging the receipt of funds. Then the patron, accompanied by a Crown VIP host, took the voucher to the cage and exchanged it for cash or chips,” outlined the royal commissioner in the report, concluding that “wealthy Chinese patrons were assisted in illegally transferring up to AU$160 million in funds from their country.”

The China UnionPay card transfers, which started at the latest in 2012 and continued until after the arrest of Crown employees in 2016, were among the reasons Finkelstein had found Crown Melbourne unfit to hold a casino license but the company was allowed to continue casino operations under strict new conditions.

Violations of the Casino Control Act

The VGCCC is acting on violations of the premises of Section 68 of the Casino Control Act, which prohibits operators from providing gambling money or chips in a transaction involving credit or debit cards, and Section 124 which requires them to keep certain accounting records to facilitate effective supervision of casino money handling.

The state gambling regulator noted it would take Crown’s response into account before deciding on the course of its disciplinary action. On its behalf, Crown acknowledged the receipt of the disciplinary note and the “seriousness of its failings” related to the practice which ceased back in 2016.

“Crown is currently reviewing the notice and will be working cooperatively with the VGCCC to close out this and all other outstanding matters stemming from the report of the Victorian royal commission,” the company stated, outlining its priority of “delivering on its reform and remediation program” as it seeks to deliver a “safe and responsible gaming environment.”

In December, VGCCC’s predecessor, the Victorian Commission for Gambling and Liquor Regulation, issued the maximum AU$1 million ($750,000) sanction to the casino operator for failure to comply with rules related to junket operations.

Unfortunately for Crown, that maximum is now 100 times bigger.