Crown Resorts Faces New Regulatory Fines in Victoria Over Blank Checks
Posted on: September 1, 2022, 07:08h.
Last updated on: September 1, 2022, 03:47h.
Australia’s Crown Resorts can’t escape the clutches of the country’s regulators. Crown is now facing a third case of alleged wrongdoing in Victoria, with more investigations still underway.
In May, 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 about the casino operator breaking several financial and gaming regulations.
Since then, the company has been facing a new probe over alleged responsible gambling failures that could cost it another AU$100 million (US$68.25 million). The newest case involves the revelation that the 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 directly from the Crown’s failings in the state and 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 agenda. The information it uncovered during those hearings led to the most recent investigations.
The VGCCC is investigating whether Crown violated the Casino Control Act by allowing some gamblers to give the casino blank checks for gambling chips, according to the Australian Associated Press. On some occasions, gamblers reportedly made checks out to themselves and turned them over to the casino.
By allowing patrons to hand over blank checks, investigators believe there’s no guarantee that Crown didn’t become too creative with its accounting practices. At the least, the practice of accepting blank checks clouds responsible gambling safeguards, as those gamblers don’t know how much they’re spending, the VGCCC believes.
When the VGCCC contacted Crown about the discrepancies, the company pulled out its book of boilerplate responses. It said that it’s 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 and offer any type of justification. If the VGCCC isn’t satisfied, it could issue another six-figure fine, change the scope of the Crown’s license, or issue 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 to settle allegations that it had almost a complete failure at the executive level. Its AU$80 million fine in Victoria earlier this 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$100 million it may have to pay now. This is on top of its losses 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 lost AU$120.9 million (US$82.62 million).
That doesn’t mean Crown is 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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