October of Controversy for Crown Resorts

Australia’s biggest casino operator Crown Resorts was battered with a series of controversies in October but has made it through unscathed so far. The nation’s largest gambling company, with a market capitalization of over A$8 billion, faced serious accusations of money laundering, corruption and links to organized crime.

The skyline of central Melbourne.

Crown Resorts casino in Melbourne has reportedly become a hotbed of money-laundering and illicit VIP gambling. ©skeeze/Pixabay

All the allegations made against Crown Resorts have been aggressively denied, the casino operator even went as far as to take a vast amount of advertising space in national newspapers, calling the accusations against them “unsubstantiated, exaggerated and outright falsehoods.” But it hasn’t convinced everyone, and although no formal action has been brought against the firm as of yet, Australian Commission for Law Enforcement Integrity and the Australian Criminal Intelligence Commission have launched probes investigating the allegations.

Aside from the severe accusations being raised against Crown Resorts, unions representing dealers, bartenders, and casino workers called for industrial action to protest low-wages, and working-hours stability. In what had already been one of the most tumultuous months in the company’s history, the firm quickly managed to reach a resolution with unions to settle the issue before a planned staff walkout on one of the busiest nights of the year.

Former Arms Dealer Reportedly Gambled A$6 million at Crown Resorts

The Indonesian businessman Joseph Wong Kiia Tai, who is on the UN list of prohibited persons, was able to gamble over A$6 million dollars within Crown Resorts casinos at Perth and Melbourne, despite being under sanctions for violating international laws, ABC News Australia reports.

Wong, an executive of the Oriental Timber Company had been found guilty in 2004 of providing military and financial assistance to the former president of Liberia Charles Taylor. Taylor would later be convicted of war crimes such as murder and genocide at The Hague and jailed for 50 years. By providing this assistance, Wong helped fuel a deadly conflict in a volatile region in order to make personal profits. This earned him a place on the UN sanctioned person’s list, a list intended to restrict the financial freedoms and movements of dangerous individuals throughout the developed world.

In this context, it is shocking that Wong was allowed to enter the Crown Resorts high-roller rooms and gamble away millions of dollars across numerous trips. Although the resort denies any wrong-doing, as at the time of his visit Wong was no longer on the UN sanctions list after it ended in 2015. Despite this, the moral issues of such business practices have brought a lot of negative press to the Crown Resorts brand, as many question their disregard for standard ethical values.

On the issue of Wong entering Australia, the Department of Home Affairs gave a statement saying:

We were aware of Kiia Tai’s visits to the Crown, and thoroughly investigate instances of misuse of the visa system and take action to mitigate against further occurrences, where appropriate.Spokesperson, Department of Home Affairs, Australian Government

This controversy came to light in mid-October after Australia’s Channel 9 60 Minutes show uncovered a series of loopholes in the current visa system. The allegations go to the heart of the inadequate vetting being carried out by Crown Resorts against its VIP customers and a systematic failure to adhere to money-laundering regulatory procedures.

Financial Irregularities, Money Laundering and Organized Crime

As the allegations against Crown Resorts mount and begin to paint a very damning picture, the company CEO John Alexander has gone on the offensive, vehemently denying any wrongdoing on part of the operator.

As he stated in a press release in mid-October:

Let me be clear, Crown does not tolerate any illegal activity by its employees or its patrons. I do acknowledge these sensationalist allegations have raised some concern among our stakeholders. I can personally assure you we are taking these matters seriously.John Alexander, Chief Executive Officer, Crown Resorts Limited

The gaming regulator in New South-Wales last week announced they will be launching an investigation into a deal that involved the sale by primary investor James Packer of 20% of Crown Resorts shares to Lawrence Ho. The deal was conducted through subsidiary companies, and set off red flags as Lawrence Ho was the director of a company that Crown was forbidden to associate with when the deal was made.

Separately, the New South-Wales Liquor & Gaming Commission said publicly that the Crown Resorts Limited gambling company is not doing enough to prevent illegal activities and money-laundering risks within its casinos. The profound and clear links to organized crime which Stanley Ho, the father of Alexander Ho has becoming a major concern to the Australian regulator. The Ho family-owned casinos in New Jersey, US which reportedly allowed criminal gangs to “operate and thrive”. The association with this style of business is causing plenty of headaches for Crown, since the acquisition of a large portion of Crown shares by the Ho family.

Crown Leadership Remains Defiant

Despite facing a series of potentially catastrophic allegations of the most serious nature, Crown Resorts appears to a have navigated through the worst of the storm so far. The company has not been formally harged with a crime as of yet, and the loopholes in Australian tax code and visa-law appear to have been skillfully exploited.

It goes without saying that more scrutiny is needed when dealing with companies that clearly lack the moral compass to conduct business in an ethical way. This case is still in its early days and no doubt there will be legal resistance at every step of the way from Crown. The firm has attempted to hide much of this news from public eyes and aggressively resisted having statements and lists released to the arbiter Anthony Mason.

As Crown defiantly argued:

There is a genuine risk that Crown Resorts competitors and those who oppose Crown’s business would be able to misuse the information in order to gain an unfair commercial advantage or disrupt Crown’s business.

The investigation by Australian authorities into the business dealings of Crown Resorts Limited and its associates continues.

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