Crown Resorts Faces New Regulatory Fines in Victoria Over Blank Checks
Posted on: September 1, 2022, 07:08h.
Last updated on: September 1, 2022, 07:08h.
Australia’s Crown Resorts can’t escape from the clutches of regulators in the country. It’s now moving on to its third case of alleged wrongdoing in Victoria, with more investigations still underway.
The Victorian Gambling and Casino Control Commission (VGCCC) fined Crown AU$80 million (US$57.5 million). This was in response to the initial inquiry that found the casino operator broke a number of financial and gaming regulations.
The company then began responding to a new probe over alleged responsible gambling failures. That could potentially cost it another AU$100 million (US$68.25 million). The newest case involves the revelation that Crown allowed some gamblers to hand over blank checks in exchange for gambling chips.
Crown Keeping VGCCC Busy
The VGCCC is the successor to the Victorian Commission on Gambling and Liquor Regulation. It was created as a direct result of Crown’s failings in the state, as well as in others across Australia.
When Victoria conducted its first inquiry into Crown and its Crown Melbourne casino, it realized that the casino operator had a track record of sidestepping rules and regulations to suit its own agenda. The information it uncovered during those hearings led to the second investigation, as well as the latest.
Australian Associated Press reported that the VGCCC learned that Crown violated the Casino Control Act by allowing some gamblers to give the casino blank checks for gambling chips. In addition, on some occasions, gamblers made checks out to themselves and turned them over to the casino.
By allowing the patrons to hand over blank checks, there is no guarantee, and no reason to suspect, that Crown didn’t become a little too creative with its accounting practices. In addition, the practice clouds responsible gambling safeguards, as those gamblers don’t know how much they’re spending.
When the VGCCC contacted Crown about the discrepancies, the company pulled out its book of boilerplate responses. It said that it has already implemented “comprehensive reforms” throughout its operations to ensure that “compliance failures do not happen in the future.”
That likely won’t be enough to appease the regulator. Crown now has to hand over any documentation about the practice, as well as offer any type of justification. If the VGCCC isn’t satisfied, it could issue another six-figure fine, change the scope of Crown’s license or issue it a letter of censure. The latter is essentially a formal slap on the wrist that becomes part of the receiving entity’s permanent record.
Money Down the Drain
Crown has been paying regulators across Australia in order to settle allegations that it had almost a complete failure at the executive level. Its AU$80 million fine in Victoria last year was a record and followed a change in the regulatory structure that raised the cap on fines from AU$1 million to AU$100 million (US$6.8 million to $68 million).
That’s apart from what could be another AU$200 million it may pay now. This is on top of the losses it has incurred over the past few years.
Last year, Crown reported a loss of AU$196.3 million (US$134.15 million at the time). In 2020, it had a loss of AU$120.9 million (US$82.62 million).
That doesn’t mean Crown’s in jeopardy of folding. On the contrary, the AU$8.8 billion (US$6.6 billion) Blackstone paid to buy its assets will help keep it going. However, the market is changing, and Blackstone has to be ready to respond.
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Source: casino.org
