Besieged gaming empire Crown Resorts has yet to satisfy the Victorian gambling regulator it has fixed nine serious problems at its flagship Melbourne casino, including money laundering risks and the presence of alleged criminals, which were supposed to be solved a month ago, Guardian Australia can reveal.
In a review of the casino licence released last year the Victorian Commission for Gambling and Liquor Regulation made 20 recommendations to clean up the casino, nine of which were to be in place by 1 July this year.
These included requirements that Crown upgrade its risk management systems, use facial recognition systems at all casino entrances, undertake a “robust review” to address its money laundering risks and implement a policy to keep people charged with serious offences out of the premises.
While Crown has made submissions to the VCGLR about each of the recommendations, documents provided to the Guardian by the regulator’s chairman, Ross Kennedy, show it has yet to accept the gaming group has done enough to discharge 10 of them, including the nine that were due to be completed by 1 July.
The remaining recommendation still under consideration by the commission – that Crown conduct staff briefings on regulation – is supposed to be acted on annually.
Since Saturday, Crown has been buffeted by a stream of allegations published by the Nine group and made in parliament by independent MP Andrew Wilkie linking the gaming company to organised crime and money laundering.
The Morrison government and the opposition have resisted a parliamentary inquiry but, on Tuesday, attorney general Christian Porter referred allegations that Crown high rollers got special treatment at the border that allowed them to be whisked into the country on the company’s private jets without being checked to the Australian Commission for Law Enforcement Integrity.
On Wednesday evening the Age reported that the Australian Criminal Intelligence Commission will conduct a special investigation into organised crime in Australian casinos.
The ACIC’s targeting criminal wealth special investigation will reportedly probe the operation of agents known as junkets who are responsible for bringing high roller clients into casinos, usually from offshore.
ACIC chief, Michael Phelan, reportedly said the “infrastructure supporting junket operations … provides opportunities for exploitation by serious and organised crime to conceal and legitimise criminal wealth”.
Phelan did not name which operators were being examined.
Crown hit back in newspaper ads signed by its entire board of directors, slamming Nine’s coverage as a “a deceitful campaign” that “unfairly attempted to damage Crown’s reputation”.
In addition to complaining of “numerous examples of poor or misleading journalism”, the Crown board, which is led by John Alexander and includes the former Howard government minister Helen Coonan, distanced the company from junket operators who bring high-rollers from Asia to its Australian casinos, defended its record in fighting money laundering, and denied it knew staff who were convicted for illegal gambling promotion in China were breaking the law.
Regulators including the VCGLR have also been accused of failing to properly supervise Crown’s Melbourne operation, with Wilkie claiming the agency deliberately delayed an investigation to help Victorian premier Daniel Andrews’ re-election chances and former state gaming minister Tony Robinson telling the Guardian it needed to do more to combat the threat posed by the casino.
In a 2017 report, the Victorian auditor general also slammed the VCGLR, saying it “has not paid sufficient attention to key areas of risk in the casino’s operations, such as detection of people excluded by Victoria police, responsible gambling and money laundering” and had until recently not had a dedicated team devoted to the venue.
Regulators including the VCGLR have also been accused of failing to properly supervise Crown’s Melbourne operation
But in his first remarks on the Crown crisis, Kennedy defended the agency’s performance. He said the auditor general was currently conducting a follow-up review, to be tabled in parliament in November.
“I am confident that the VCGLR’s governance and audit processes and our performance management and reporting allows staff to discharge their regulatory responsibilities with the highest levels of integrity, expertise and professionalism,” Kennedy said.
“The VCGLR has also established a dedicated casino team, reviewed its audit program to focus on higher risk areas and you will note from the [Victorian] budget papers that the government has introduced a new reporting measure on the VCGLR’s regulatory oversight of the casino operations.”
Kennedy said the VCGLR had also taken action following an Independent Broad-based Anti-corruption Commission report last year that found it was not doing enough to combat the risk of corruption through its officers being bribed.
“We have closely examined this report to ensure our prevention and detection strategies align with the guidance provided in the report,” he said.
Victorian law requires the VCGLR to complete a full review of Crown’s Melbourne license every five years.
While the most recent review, finished in June last year, was the VCGLR’s deepest dive into Crown’s operations in the casino’s 25-year history, it failed to appease critics such as Robinson who regard the regulator as ineffective.
It also left unfinished an investigation into the arrest and conviction for illegal gambling promotion of 19 Crown staff in China – an inquiry that has now been running for two years and remains on foot.
Crown was asked to complete two of the 20 recommendations made in the review – to “fully engage” Crown’s independent directors in oversight of the Melbourne casino and to review the qualifications of committee chairs – by 1 January.
The VCGLR is satisfied Crown has met these recommendations.
Another eight, which include requirements to use data analytics to identify problem gamblers, are either due later in the year or have no due date.
This leaves the 10 recommendations where Crown has yet to satisfy the VCGLR it has done enough.
Crown was given a 1 July deadline to reassess its risk systems “and upgrade them where required”, “undertake a robust review of internal controls” to make sure its compliance department knew about projects that might need regulatory approval and “undertake a comprehensive review of its policy for the making and revocation of voluntary exclusion orders”, which allow people to bar themselves from the casino.
By the same date, it was also to develop a policy allowing “family members and friends” to bar problem gamblers, put up new responsible gambling signs, develop a new responsible gambling policy and expand facial recognition technology to cover every entrance to the casino.
The same deadline also applies to two important recommendations related to law enforcement: that Crown “undertake a robust review”, with input from financial intelligence agency Austrac, “to ensure that anti-money laundering risks are appropriately addressed” and that it “implement a policy to make an exclusion order… where a person has engaged in significant unacceptable conduct in the casino or is the subject of serious criminal charges”.
A Crown spokeswoman declined to comment