Crown retains its Melbourne casino licence, but we need more reforms

The troubled history of Melbourne’s Crown casino typifies the folklore about the two reliable revenue streams for financial success in the casino business – money-laundering, and exploitation of vulnerable people.

At both activities, Crown excelled.

Melbourne became a favoured destination for those who had need of money-laundering services, including Chinese and local criminal gangs. At the same time, Crown’s policy was to encourage people to gamble way beyond their means.

Since the 2021 report of the Finkelstein royal commission, Crown’s path to rehabilitation has been overseen by the Special Manager, Stephen O’Bryan KC. He’s provided the Victorian Gambling and Casino Control Commission (VGCCC) with regular reports, most recently in January.

O’Bryan has had access to every aspect of casino operations, including a seat at the board, and insight into any document or data he wishes.

Based on these reports, the VGCCC Chair, Fran Thorne, announced on Tuesday that Crown has achieved “suitability”. Had this conclusion not been reached, Crown’s licence would have been automatically cancelled.

In effect, “suitability” means that over the past two years, Crown has obeyed the law, refrained from bullying the regulator, and paid its taxes.

A history of appalling behaviour

As unremarkable as this seems, it’s a far cry from Crown’s previous behaviour.

The royal commission documented Crown’s ties to the criminal underworld, its habit of bullying the regulator and obfuscating when pressed, of adopting the hardest and most uncooperative line possible, of facilitating the mechanics of money-laundering via special bank accounts, and indeed by processing Aldi bags full of cash in casino junket rooms.

Laws were regularly breached in Australia and elsewhere, and Crown employees placed in serious legal jeopardy in China.

In considering Crown’s observance of the “responsible service of gambling”, Finkelstein observed that “Crown Melbourne had for years held itself out as having a world’s-best approach to problem gambling. Nothing can be further from the truth.”

All of this came to light because investigative journalists, notably via the Nine media and ABC, revealed details of Crown’s poor behaviour.

‘Public interest’ no longer the case

This should have spelt the end of Crown as the licence holder, if not the end of the casino operation.

The Finkelstein royal commission recommended a period of rehabilitation leading towards restoration of the licence. The loss of the licence in 2021 would have shut the casino down, resulting in a very big mess. It was the “public interest” that saved Crown’s licence.

This is no longer the case. If the casino licence were cancelled now, a statutory manager may be appointed to seamlessly take over the operation of the casino. It would effectively be run by the state until a replacement operator could be found.

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Notably, the VGCCC declined to pursue this course. Thorn told the media on Tuesday that the casino is not too big to fail. Perhaps not.

Tuesday’s announcement essentially brings this episode to a close. Crown has been fined significant amounts – VGCCC fines totalling $250 million, and a fine of $450 million to settle an anti-money-laundering action. The latter fine is still being paid off, interest-free.

However, no individual involved in any of these illegalities has been prosecuted. Thorn argues that this is not VGCCC’s responsibility.

As a journalist put it to her on Tuesday: “The worst penalty someone faces in this situation is to resign from their job?” If your life has been ruined by Crown’s actions, such an outcome might be seen as pitiable.

Reforms are seriously needed

Whether we like it or not, Crown will continue to operate the Melbourne casino. If we are to be assured of Crown’s continuing compliance, some outstanding reforms are required.

These include institutionalising the office of special manager. It’s clear O’Bryan’s presence has focused Crown’s attention on meeting its obligations. Continuing that office into the future (at Crown’s expense) would maintain that focus.

The failure of authority to prosecute anyone at all over Crown’s malfeasance is spectacular. The VGCCC must be given the power to prosecute, or to refer for prosecution, individuals who have breached relevant legislation. Penalties for such breaches need to be significant.

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Although Crown has now implemented a cashless account system for poker machines, individuals can still set very high limits on their accounts.

In Tasmania, the new pre-commitment system will impose a statutory limit on pokie losses, of $5000 per year. If the regulator can be persuaded that one has legitimate means to go beyond this limit, they may be permitted to do so. A similar arrangement at Crown would address any renascent money-laundering, as well as provide an extra layer of protection.

Gambling is big business in Australia. It must not be allowed to become so big, or pervasive, that it’s impossible to regulate.

Crown and other Australian casino operators believed themselves to be above the law. That belief was clearly well-founded.

Cancelling Crown’s licence would have sent a very clear message that no entity is too big to fail. In the absence of that, we’re still playing catch-up.

The achievement of effective regulation, including effective protection for vulnerable people, remains some way off.