Severe ruling targeted at Crown Resorts
An investigation into Australian gambling company Crown Resorts by the ILGA (Independent Liquor & Gaming Authority) has led to a damning final verdict: Crown is now deemed unfit to receive further casino licenses. This decision comes after months of scrutiny over their dealings with a Chinese junket operator and allegations of money laundering worth millions. What's happening next?
ILGA Reveals Evidence of Money Laundering
After the CEO, Ken Barton, admitted to security gaps at Crown last year, questions arose as to whether the company was suitable for another license in New South Wales. Following this, the ILGA has released its final ruling.
The outcome is disastrous for the Australian market leader; their 2.4 billion dollar project in Sydney's Barangaroo may not operate immediately. Crown stands accused of using its gaming facilities and accounts for money laundering. In order to be reclassified as a suitable licensee, the company will need to convince regulators otherwise.
Additionally, the investigation found that Crown had worked with a Chinese junket operator affiliated with organized crime. The company failed to conduct proper due diligence on this matter. Moreover, Crown employees in China faced significant risks due to the country's ban on gambling, except for the lottery and Macau.
Junket operators are agencies that bring wealthy VIP players to casinos and look after them on organized gambling trips. While allowed in Australia, players cannot be recruited from countries where gambling is illegal, such as China. Crown had cooperated with Suncity, which was already under suspicion of working with Chinese crime syndicates in 2014. It's believed that the group infiltrated Crown casinos in Melbourne and Perth to launder millions of dollars.
James Packer's Influence on Crown Resorts
The ILGA's final report contains severe criticisms against Crown Resorts. Among their claims, the company is accused of operating with excessive confidence in itself, demonstrating corporate arrogance. This attitude led to deficient checkup and serious allegations. Judge Patricia Bergin's report closes with several demands for Crown to regain its license:
For Crown to proceed with its Barangaroo casino, significant changes must occur. These include introducing a compliance and financial audit and halting cooperation with junket agencies entirely. Additionally, the owner, James Packer, who no longer sits on the board, must not interfere in Crown's operations.
James Packer, billionaire co-founder of Crown, is accused of influencing the company excessively. The breaches putting the third Crown license in jeopardy include the planned share sale by Packer to Melco CEO, Lawrence Ho. His father, former Melco CEO Stanley Ho, is also linked to organized crime syndicates in China.
Crown's license agreement explicitly prohibited such business relationships with people or companies associated with Stanley Ho. However, Packer went ahead and offered 20% of his shares to Ho for 2.5 billion dollars. An initial transaction of 1.2 billion dollars took place in June 2019, leaving a remaining 1.3 billion dollars to be paid the following September. Joshua Preston, head of legal affairs, claimed ignorance of these transactions in August 2020.
Amendments to the NSW Casino Control Act
The scale of the Crown affair has resulted in the Australian state NSW making amendments to its Casino Control Act. The new sections demand more transparency from casino operators, and junket operators will be banned outright. Furthermore, each casino operator is required to employ a qualified compliance auditor.
NSW's leading daily newspaper, SMH, reports that to regulate the sector effectively, a new independent regulatory body, the Independent Casino Commission (ICC), will be established. Casino operators will contribute financially towards the establishment of the ICC.
Crown Responds to the ILGA's Decision
Until recently, Crown denied all allegations, which originated from investigations by three daily newspapers. As knowledge of the situation has advanced, they now acknowledge the need for cultural change, with management initiating this change. However, they insist it should be driven from within Crown, not forced by authorities. The Management Board is due for restructuring to achieve this.
How will Crown Resorts respond?
This group plans to implement a compliance audit and require all AM/LFTF-trained employees to provide certificates of completion. These certificates must be updated annually. Additionally, the owner James Packer will be advised against any future remote control actions. His withdrawal from the business in 2016 due to mental health concerns indicates further changes may be on the horizon. Stay tuned for more updates.
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Source: www.onlinecasinosdeutschland.com
