VGCCC applies $57m penalty to Crown Resorts

The Victorian Gambling and Casino Control Commission has chosen to slap Crown Melbourne with a sizable financial penalty. A fine of AU$80 million (around $57.4 million at today’s trading rate) will now have to be paid by the property which was involved in the China Union Pay bank cards saga. The investigation into the property undermined its reputation but also created the opportunity to introduce new and stronger regulatory mechanisms that will make similar issues impossible in the future.

Crown Melbourne had to undergo a probe launched by the state that investigated the property’s practices that involved hiding China Union Pay gambling expenses as accommodation expenses. A total of AU$164 million (close to $45.97 million) was spent gambling through China Union Pay payments on the premises, investigators concluded. This spanned a period between 2012 and 2016. The casino made AU$32 million, according to investigators because of this practice. This was described as completely unacceptable by the regulator.

China Union Pay specifically blocks transactions that are made for the purposes of gambling, but Crown Melbourne seems to have agreed to write those transactions differently in its books. Because of that, the property breached the Australia Casino Control Act 1991.

The size of the new penalty reflects the state’s preparedness to address wrongdoing. While VGCCC has suggested that it does not expect to have to apply such penalties in the future it confirmed that it would not hesitate to hold offenders responsible. Until recently, VGCCC only allowed for AU$1 million as the maximum penalty, but the commission – which was newly created to raise regulatory standards in Victoria – has decided to change that to AU$100 million and make quick good use of it.

Of course, not all is bad news. VGCCC has acknowledged the work that Crown Melbourne has put in since the investigation began, with executives stepping forward and agreeing to step down from their positions to give the property a fresh start. All these things have been considered by the commission.

Commenting on this penalty, VGCCC Chairperson Fran Thorn said that the commission has acknowledged the good done by the Crown during the investigation, but it could not look the other way considering the transgressions made by the property.

"Crown benefited handsomely from its illegal conduct. The fine will ensure Crown is stripped of the revenue derived from the CUP process and will send a clear message that it must comply with its regulatory obligations," Thorn said in a public statement.

VGCCC may not stop here and use the findings of the Royal Commission to issue another penalty.

Image credit: Crown Resorts