Melbourne’s Crown Casino has been fined a record AU$80 million (€53.4 million) fine for running a scheme that allowed gamblers and customers to make illegal transfers of funds from China.
Crown would issue fake hotel receipts and reimburse gamblers with vouchers that could be used at the casino
A Victorian royal commission discovered that Crown had devised a scheme that allows gamblers based in China to use a China Union Pay (CUP) bank card to access funds when gambling at the casino between 2012 and 2016. This was used primarily as a method to avoid transfer limits.
According to the Victorian Gambling and Casino Control Commission (VGCCC), the casino went to great lengths to keep the scheme a secret and there was no indication that there was any sort of misunderstanding or clerical error. In response to the investigation, Crown admitted its ‘historic failings’ and has made a commitment to ensure that such activities never take place at the casino again.
The VGCCC estimated that Crown generated as much as AU$32 million (€21.35 million) from the illegal scheme which breached the casino’s licensing conditions along with Victoria’s Casino Control Act and Chinese laws relating to the transfer of funds.
The investigation revealed that at the time of the scheme, Chinese nationals were not permitted to transfer more than AU$50,000 (€33,373) out of the country every year. However, the scheme allowed them to circumvent these restrictions by issuing false hotel receipts. The guest could then pay the bill using their CUP bank card and receive a voucher that that they could then exchange for gambling chips.
Speaking of the fine, VGCCC chairperson Fran Thorn said:
“Crown’s CUP process was a clandestine, deliberate process, which not only breached the Casino Control Act but was also devised to assist patrons to breach China’s foreign currency exchange restrictions. Crown was aware of the risk that the CUP process could be illegal but decided to run that risk.
In doing so, it showed no regard for upholding its regulatory obligations. Indeed, it went to some lengths to hide what it was doing.”
In a statement following the announcement of the fine, Crown Casino said:
“Upon becoming aware of this historical conduct, Crown’s board immediately commissioned an independent investigation and shared the findings with the Victorian royal commission, the Victorian Commission for Gambling and Liquor Regulation (the predecessor to the VGCCC) and other regulators.
Crown’s board and senior management are committed to the delivery of a comprehensive reform and remediation program to ensure Crown delivers a safe and responsible gaming environment and continues to cooperate with the VGCCC on all matters arising from the Victorian Royal Commission Report.”
The fine is the largest issued in the VGCCC’s history. Until last year, the maximum fine that could be imposed by the VGCCC was AU$1 million. However, this threshold was raised to AU$100 million.
Tim Costello, chief advocate for the Alliance for Gambling Reform, told ABC Radio Melbourne that the fine was “absolutely appropriate”.
“I’m at least breathing a little bit easier now knowing we’ve got a regulator that has serious sanctions.”
The Victorian royal commission into Crown found that the casino had ‘behaved disgracefully’ in the past and that it should be stripped of its license if it cannot prove that it has reformed by 2023.
The VGCCC is currently considering taking more disciplinary proceedings against Crown in relation to other findings of the royal commission.
Based in London, Natasha is a former sports journalist with experience working for some of the biggest athletes & brands in the world of sports and iGaming.