Crown Resorts Faces AU$80-Million Fine from the VGCCC over Anti-Money Laundering Law Violation

The new gambling regulator in the state of Victoria has announced that Crown Resorts would face a monetary penalty of AU$80 million for facilitating the circumvention of anti-money laundering regulation and China’s currency controls in the period from 2012 to 2016.

The disciplinary action of the Victorian Gambling and Casino Control Commission (VGCCC) was started after the Royal Commission’s investigation into the Australian gambling giant found that high-roller customers of Crown Resorts were allowed to use China Union Pay (CUP) cards to pay for their gambling. Reportedly, the gambling transactions were masked as accommodation payments on the hotel reception of Crown Melbourne. The probe found that the company’s VIP casino customers managed to move almost $164 million out of China by using their CUP debit and credit cards for illegal gambling transactions.

This is the first time when the VGCCC has decided to use its stronger enforcement powers under the amendments brought to the Casino Control Act. As previously reported by Casino Guardian, the maximum allowable penalty was increased from $1 million to $100 million under the aforementioned legislative changes.

Fran Thorn, the chair of the Victorian casino and gambling regulator, announced that masking the gambling CUP payments as hotel and accommodation fees was a deliberate process that was kept secret by Crown Resorts’ staff. On one hand, the investigation found that these actions violated the Casino Control Act but, on the other hand, the process was designed in a way that helped VIP customers breach the foreign currency exchange restrictions of the Chinese Government and fund gambling transactions.

Crown Resorts Found Guilty of Misconduct and Facilitating Illegal CUP Card Transactions

Ms Thorn, who took over the position of VGCCC chairperson in January 2022, explained that Crown Resorts had been aware of the risk that the use of CUP credit and debit cards for gambling transactions could have been illegal but had still decided to run that risk. The Australian gambling giant was found to have shown no regard for the regulatory requirements and obligations it had and hid the truth about the illegal transactions for years until it was eventually unveiled by the probe.

Furthermore, the investigation found that the gambling company drew considerable benefits from its illegal conduct. The AU$80-million fine imposed by the Victorian gambling and casino watchdog is to make sure that Crown Resorts is stripped of the revenue that had been derived as a result of the violation of the Casino Control Act and China’s foreign currency exchange restrictions in the period from 2012 to 2016. According to the chairperson of the VGCCC, the fine would also send a clear message to other gambling operators that are supposed to comply with their regulatory obligations.

At the time it imposed the penalty, the VGCCC took into account the fact that Crown Resorts cooperated with the investigation and admitted the CUP process, which resulted in an estimated overall revenue of AU$32 million.

The AU$80-million fine accounts for 21% of the annual net profit of Crown Resorts after tax from before the coronavirus pandemic in 2019.

As Casino Guardian already reported, a separate probe into the mechanisms used by the gambling giant after 2016 is being undertaken by the VGCCC. Crown Melbourne, however, believes that the transactions that were carried out under these mechanisms did not violate the Casino Control Act. The Victorian casino and gambling regulator is also considering whether to initiate further disciplinary actions against Crown Resorts, with the proceedings being linked to separate findings from the state’s Royal Commission. If such actions are initiated, they could result in a monetary fine of up to AU$100 million.

Olivia Cole

Olivia Cole has worked as a journalist for several years now. Over the last couple of years she has been engaged in writing about a number of industries and has developed an interest for the gambling market in the UK.

Daniel Williams

Author: Dale Alvarez