By Chris Vedelago, Ben Butler and Marc Moncrief
Crown Casino has been operating as a secret bank for some of the country's biggest gamblers, exploiting a legal loophole to lend tens of millions of dollars in chips despite a government ban on offering credit to locals.
The allegations that the casino is circumventing state gambling laws comes as Crown was last week granted a 17-year extension to its licence that will deliver a major boost to the number of pokies and gaming tables and an end to the so-called "super tax" levied on VIP players at the venue.
Under the Casino Control Act 1991, Australian residents must pay for chips in advance by cash, cheque, travellers' cheque or a voucher. While offering credit in any form to locals is prohibited, it can be extended to international VIPs.
A Sunday Age investigation has found that Crown has apparently been extending credit to Australian residents using a creative interpretation of the regulations governing how cheques and chip vouchers are redeemed and the way residency is defined for high rollers.
A Crown spokesman said any suggestion Crown had breached the Act was "wrong and baseless", noting the Victorian Commission for Gambling and Liquor Regulation had given the company a clean bill of health following an extensive review last year.
But a Melbourne high roller who has spent years gambling in Crown's Mahogany Room with a coterie of other wealthy patrons called the denial "bulls---".
"Nobody goes down there with $50,000 or $100,000 in cash. There's a system worked out where you get approved in advance, sign this form when you get there and they hand over the chips," he said.
"If you have a good night, you pay back what you owe. If you don't, you've got seven days to pay it back. Don't pay and they send professional debt collectors after you."
The Sunday Age understands that the system relies on the lax rules in place around Crown's ability to accept cheques that don't have to be deposited for days and the issuance of "chip purchase vouchers", which are sometimes used like promissory notes or IOUs.
"[The Casino Control Act] permits Crown to offer a cheque cashing facility to any player (including Australian residents) who establishes a deposit account with Crown," a Crown spokesman said. "This facility permits the provision of chips to the player to the value of the amount credited to their deposit account."
Questions have also been raised about the way Crown chooses to define the residency status of high rollers. Under the law, credit can be extended to VIPs who are classified as "not ordinarily resident in Australia".
But the VCGLR has acknowledged it is unable to conclusively define the term, noting it relies on guidance from at least three Commonwealth acts and several court rulings, which are applied on a case by case basis.
"The term is not defined in the Act. In these instances, the VCGLR applies criteria based on the various definitions available," a spokesperson said.
The Sunday Age understands that Crown has interpreted "not ordinarily resident in Australia" to include citizens and permanent residents providing they meet standards that Crown has repeatedly refused to disclose.
"[The Casino Control Act] permits Crown to provide credit to VIP players not ordinarily resident in Australia and Crown does this in accordance with that Act," a spokesman said.
In late 2011, high roller Zhao Li was provided with $13 million in credit for use on a single day after Crown determined he was "ordinarily resident in China".
But land title records show Mr Zhao was the registered owner of a five-bedroom neo-Georgian mansion in Balwyn North that he purchased for $2.3 million the year before.
Crown launched legal proceedings against Mr Zhao in May this year after he refused to pay $6.89 million that was still owed and notice of the lawsuit was served by the casino's lawyers at his local address.
"You have asserted that owning property in Australia means that a person must be an Australian resident. This is not correct," a Crown spokesperson said.
But under foreign investment rules, only the holder of a valid residency visa is allowed to purchase an established home. "Foreign non-residents or short-term visa holders cannot buy established (second-hand) dwellings," the Foreign Investment Review Board states.
Dr Charles Livingstone, senior lecturer at Monash University's school of public health and preventive medicine, said the state government's reliance on gambling revenue meant that often "what Crown wants, Crown gets".
"Crown falls well and truly into the category of too big to fail. When there's a ban on smoking, they get an exemption. When there's a ban on ATMs in premises, they get an exemption. They have high-roller rooms where god knows what's going on," Dr Livingstone said.
"My sense is that Crown goes right to the edge of the law. Where the law is poorly construed or not actively enforced obviously they are going to get away with a lot more. The whole regulatory system relies on us not asking too many questions about it."
The VIP program at the Melbourne casino alone generated $501.2 million in revenue for the Crown group in the 2014 financial year.
Interstate and international high rollers are enticed to Melbourne through perks that include free food, alcohol, tickets to sporting and cultural events and luxury accommodation.
Records obtained under freedom of information show Crown's fleet of private aircraft was used to ferry gamblers to Melbourne from interstate and overseas on 439 flights over the past four years. High rollers from Hong Kong and Macau accounted for more than a quarter of the trips, while 175 flights brought in punters from Sydney and Perth.
cvedelago@theage.com.au