Crown Resorts has been handed a record $80-million fine by the Victorian Gambling and Casino Control Commission over the illegal transfer of funds from China.
The Victorian gaming regulator launched disciplinary proceedings after the state’s royal commission into Crown Resorts found the use of Union Pay cards to allow patrons to illegally transfer cash from mainland China.
It is understood that Crown processed $160 million in Union Pay card payments and netted more than $30 million in revenue between 2012 and 2016.
It marks the first time the newly formed Victorian gaming regulator has used its powers.
The penalty could have been higher, but the gaming regulator reduced the fine from the maximum penalty of $100 million, citing good behaviour.
Crown has also been ordered to pay the regulator’s costs of the disciplinary action, which are yet to be advised.
Victorian Gambling and Casino Control Commission chair Fran Thorn said that the “seriousness of Crown's illegal conduct” made the record penalty “appropriate”.
“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,” Thorn said.
“The fine will ensure that Crown is stripped of the revenue it derived from the CUP process and will send a clear message that it must comply with its regulatory obligations.”
The record fine follows proposed legislation that will further enhance the compliance and enforcement powers of its gaming regulator.
The new laws would give inspectors of the gaming industry greater access to surveillance equipment and casino records, requiring casino employees to assist inspectors to access and operator surveillance equipment to monitor activity on the casino floor.
Last year, the royal commission into Crown Resorts found multiple instances of money laundering, responsible gambling inadequacies and failures in corporate governance which ultimately lead to the casino operator being labelled as being unsuitable to hold a licence in Victoria.
Crown Resorts, however, has been allowed to continue operating for a two-year grace period while it “cleans up its act.”
In a statement, Crown said it acknowledged “its historical failing” and that the board and senior management were committed to the delivery of a comprehensive reform and remediation program.
“Upon becoming aware of this historical conduct, Crown’s board immediately commissioned an independent investigation and shared the findings with the Victorian Royal Commission and the Victorian Gambling and Casino Control Commission.”
It comes as Crown shareholders overwhelmingly backed an $8.9-billion takeover by Blackstone despite the US private equity giant yet to gain approvals from casino regulators in three states.
Shareholders, including major investor James Packer, voted to accept the takeover deal in late May.
The takeover bid is now before gambling regulators in New South Wales, Victoria and Western Australia, who have all found Crown unfit to hold gaming licences at different times.
The licence for Crown’s flagship $2.4-billion casino skyscraper in Sydney’s Barangaroo remains suspended, more than a year after it was due to open, and its Melbourne casino has been operating with a government-appointed supervisor since last year.
