How the VCGLR Failed to Spot Crown’s Criminal Ties

The first signs of irregularity at Crown Resorts dates back all the way to September 2014. Investigative journalists blew the lid off the business structures in place at Crown Resorts, and alluded to a longstanding system whereby Crown was able to draw in wealthy customers from the mainland through its partnerships with junket operators such as Suncity. The junket operators had long been identified by law enforcement as front-businesses for organized crime groups with records of violent debt collection and association with Triads and other known Asian mafia groups.

The skyline of Sydney at night.

The Sydney-based casino is in hot water, as has been well-documented, they are facing investigations from several different angles as accusations of money-laundering and complex criminal networks are thrown at the organization. ©Hans/Pixabay

The revelations began by making the claim that these junket operators were not just limited to making money from facilitating the gambling operations within Melco’s VIP rooms of Macau, but also acting as a vehicle for rich Chinese gamblers to transport their money to the Crown Resorts casinos owned by James Packer in the glass buildings of Melbourne and Sydney. Surprisingly, when these revelations hit the press in 2014 the reaction was extremely muted and didn’t cause much of a stir amongst the people.

The political reaction was also relatively non-existent. Very few people in Australia cared at the time that one of the biggest casinos in the continent was indirectly financing organized crime groups. More importantly, though was the lack of a response from the key regulator with legal oversight in these cases the Victorian Commission for Gambling and Liquor Regulation (VCGLR). The failure to root out criminality has culminated in James Packer pleading his innocence, and the Barangaroo operating license being withheld.

Criticisms are swirling around the ineptitude of the regulator to stifle this activity at the root. The history of inaction dates back to 2014, and now many independent investigators are not only looking into the misdeeds of Crown Resorts but also of the Victoria casino regulator and the systematic failings that enabled the current situation to unfold.

Victoria Regulator Fell Asleep at the Wheel

Plenty of higher-ups in the Australian government have been delivering their verdict on the fiasco, with one minister saying the best he could say is that the Victorian regulator had “fallen asleep at the wheel” in reference to the Crown Resorts debacle. The point being made by the government, in this case, is that the regulator has a responsibility to mitigate the threat of corruption and mismanagement of the casino’s corporate and day-to-day operations.

Legal academics across Australia have begun taking note of this case also. They claim that the regulator has been abysmally poor in regulating the industry for a long while, and this latest infraction by Crown is just the tip of the iceberg in a cataclysm of cases surrounding the casino. So far, the Victorian Commission for Gambling and Liquor Control has been particularly resistant to criticisms.

In their defense, the VCGLC has stated that they conducted a series of investigations up until 2018 whereby the operations of Crown Resorts were thoroughly reviewed. They maintain that they liaised with local law enforcement and the national anti-money laundering agency, all of which indicated that Crown was generally compliant with the laws. Essentially the regulator is trying to pass off the blame and claims that it did its part in the investigation.

The facts remain that many officials failed to stop potentially billions of dollars flowing through the doors of Crown Resorts that were illicit in nature. Publicly, there are many concerns that have been raised. Behind closed doors, the investigators will be pouring over the financial statements of the casino in order to try and figure out how so many red flags were missed over the five-year period.

Victorian Premier Defends Crown Melbourne License

In a twist to this story, the Victorian Premier Daniel Andrews has come out to publicly defend the prospect of Crown Resorts continuing with its operating license. Even after evidence has emerged which unequivocally proved money laundering had taken place at the Perth and Melbourne properties of Crown Resorts, Mr. Andrews says that the casino will not be subject to a license removal.

What has been agreed is that disciplinary action will be imposed. This less serious penalty for the casino will see it fined a large sum of cash and have external people placed within the organization to help steer it back onto the right course. All of this will be music to the ears of James Packer and the Crown Resorts hierarchy as retaining the operating license is their main objective throughout these hearings.  

But keeping business running as normal will certainly come at a human cost for the Crown Resorts management. External people are due to be put in key positions of oversight in part of an agreement deal struck with the authorities to enable Crown to continue regular operations. The investigations continue in Australia as the casino world watches on with interest. More to follow on this story so check back with us again soon.

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