GGRAsia – Crown fined US$58mln over China UnionPay probe

Crown fined US$58mln over China UnionPay probe

May 31, 2022 Newsdesk Latest News, Top of the deck, World

The Victorian Gambling and Casino Control Commission in Australia has imposed a fine of AUD80 million (US$57.6 million) on the Crown Melbourne casino resort (pictured), over what it described as “illegal conduct” by the venue’s operator relating to China UnionPay card transactions. Crown Melbourne is Crown Resorts Ltd’s flagship operation in Australia.

“This disciplinary proceeding relates to the illegal conduct of Crown Melbourne between 2012 and 2016, whereby patrons were allowed to use credit or debit cards to access funds to gamble at the Melbourne Casino,” said the Australian state’s gaming regulator.

The regulator said the process “misled the card provider, China UnionPay, and the other financial institutions whose cards were used,” and had the potential to “mislead any law enforcement agency looking at the bank records with an eye to what the cardholder was paying for.”

“This illegal conduct facilitated access to nearly AUD164 million, from which Crown derived an estimated revenue of more than AUD32 million,” it added.

In a filing to the Australian Securities Exchange, Crown Resorts said the fine is “payable in 28 days from the date of the decision”, on May 27. “Crown Melbourne has also been ordered to pay the costs … of this disciplinary action, which are yet to be advised,” the firm added.

The Victorian gaming regulator’s chairperson, Fran Thorn, was quoted as saying in the statement that the “record AUD80-million fine was appropriate and necessary because of the seriousness of Crown’s illegal conduct.”

“Crown’s China UnionPay process was a clandestine, deliberate process, which not only breached the Casino Control Act but was also devised to assist patrons to breach China’s foreign currency exchange restrictions,” Ms Thorn added.

The decision stems from findings during an eight-month royal commission into Crown Resorts’ suitability to hold a gaming licence in the state of Victoria. In October, the casino firm was found unsuitable to operate a casino at its resort in Melbourne, but it was able to retain its licence under stricter oversight.

In Monday’s statement, the Victorian gaming regulator said it continues to consider “further disciplinary proceedings against Crown related to the other findings of the Royal Commission, which may each attract a fine of up to AUD100 million.”

In its filing, Crown Resorts said it “acknowledges its historic failings,” adding that the use of the “China UnionPay process ceased in 2016.”

It added: “Crown’s board and senior management are committed to the delivery of a comprehensive reform and remediation programme to ensure Crown delivers a safe and responsible gaming environment.”

Aside from Crown Melbourne, Crown Resorts has gaming and non-gaming operations at Crown Perth, in Western Australia. For now, the company also has non-gaming business at Crown Sydney in New South Wales.

In February last year, Crown Resorts had been found unsuitable to be permitted to open a casino at Crown Sydney, in Sydney, New South Wales, and a decision on its gaming licence there is still pending. A public inquiry by the New South Wales regulator heard allegations that Crown Resorts had displayed at its Crown Melbourne venue, inadequate oversight of its junket partners for VIP gambling, and had exposed itself to money laundering at that property.

Earlier this month, Crown Resorts’ shareholders voted in favour of investment firm Blackstone Inc’s proposed acquisition of all the shares in the company, a deal that values it at AUD8.9 billion.