Crown Resorts faces up to $100m fine over ‘multiple’ responsible gambling breaches
After a record $80m fine from the Victorian casino regulator over the illegal use of Chinese debit cards, the company is now facing another blockbuster penalty.
Crown Resorts is facing a fine of up to $100m over “multiple breaches” of its responsible gambling obligations — including not “adequately supervising” at risk patrons — at its flagship Melbourne casino.
Barely a week into its new ownership under US private equity giant Blackstone, the Victorian Gambling and Casino Control Commission (VGCCC) has launched fresh action against the group.
The new potential fine – a penalty from revelations of last year’s Victorian Royal Commission into Crown – is on top of the record $80m penalty the VGCCC slapped on the company in May over the use of Union Pay cards to illegally transfer funds from China.
It comes as Crown is preparing to finally open its gaming floor at its new $2.2bn casino in Barangaroo after the NSW regulator granted the company conditional approval last month.
Meanwhile chief executive Steve McCann is yet to decide whether he will accept a $9m payout following Blackstone’s takeover or stay and continue to oversee the company’s reform, which includes the appointment of more than 60 responsible gambling advisers.
The Victoria’s Royal Commission into Crown found the company committed multiple breaches in delivering its responsible gambling code of conduct, which included “not adequately supervising or interacting with hundreds or possibly thousands of customers who exhibited signs of problem or risky gambling” at its Melbourne casino.
Adhering to the responsible gambling conduct is a condition of it maintaining its Victorian casino licence.
VGCCC chair Fran Thorn said: “Crown’s responsible gambling obligations are a condition of the casino licence, designed to protect vulnerable patrons and to prevent gambling related harm to patrons, their families and the community”.
“There is no more important obligation,” Ms Thorn said.
“We heard many distressing stories at the Royal Commission of vulnerable patrons being encouraged to gamble beyond their means.
“The VGCCC will therefore be unflinching in its resolve to deal with the issues uncovered at the Royal Commission regarding Crown’s approach to responsible gambling, and to ensure the casino operator acts in line with its legal obligations and the community’s expectations.”
A spokesman for Crown – which has been delisted from the ASX following Blackstone’s $8.9bn takeover – said: “Our priority remains delivering on our reform and remediation program to ensure we deliver a safe and responsible gaming environment”.
“The VGCCC announcement today relates to issues raised in the Victorian Royal Commission Report and we continue to work cooperatively and constructively with the VGCCC to close out this and all other outstanding matters.”
Ray Finkelstein, the former federal court judge who oversaw the Victorian Royal Commission into Crown, said he was initially more concerned with the company’s efforts to reform itself and how it deals with problem gamblers, rather than its controversial past, to gauge whether it was suitable to continue to hold a licence for its flagship casino in Melbourne.
“I am concerned that unless the seriousness of the conduct is recognised, any steps taken to remedy the position will only be half-hearted,” Mr Finkelstein said at the Royal Commission.
He later found that while Crown engaged in “illegal, dishonest, unethical and exploitative” behaviour, he found the immediate cancellation of Crown’s licence would cause considerable harm to the Victorian economy and innocent third parties, including Crown Melbourne’s 12,000 employees.
Instead Mr Finkelstein recommended Crown operate under the “stringent oversight” of a special manager for two years in order to retain its licence while it completes a significant reform agenda.
Premier Dan Andrews said last October that the “onus will be on Crown to clearly demonstrate why its licence should not be cancelled by the regulator”.
“The Government will go beyond the recommendations of the Royal Commission with laws that will automatically cancel Crown’s licence unless the regulator is clearly satisfied Crown is suitable to continue operating Melbourne’s casino,” Mr Andrews said.
Blackstone finalised its $8.9bn takeover of Crown on June 24, ending James Packer and his family’s decades-long association with the group.
Chief executive Steve McCann is yet to decide whether he will stay on at the company after assuming the top job last year after the resignation of Ken Barton. Mr McCann’s employment contract includes a change of control clause, meaning he could reap an immediate payout of up to $9m, including $5m worth of long-term performance rights that vest under Blackstone’s ownership.
“We took a decision as a board not to allow any engagement with directors or my direct reports until after the second court date (to approve Blackstone’s takeover) to avoid any allegation or any perception of possible conflict,” Mr McCann said when Blackstone finalised its takeover.
“It’s really only been in the last week and a half we’ve allowed people to have that engagement. That process is underway now. And I’ll be sitting down with Blackstone as soon as the deal is complete, to talk about what our shared vision is, and what we’ll be doing is making sure that we have the right structure and the right people in the right roles to make sure the Crown can deliver on its commitments.”
Mr McCann said he had appointed Jamie Wiebe as its new head of responsible gaming, which will be rebranded as customer care.
“We’ve materially enhanced our focus on responsible gaming. We had already reduced introduced some reduced play … testing and trialling that over some time. We also have been supportive of a national self exclusion register and we’ve materially enhanced our resources in responsible gaming. We have over 60 responsible gaming advisers in crown which is multiples of what casinos have,” Mr McCann said.
“We’re going to change the language here, it will become about customer care not about responsible gaming, I think that has a bit of a stigma attached to it.
“The aim is to get everyone within the organisation aligned behind the same vision, the same purpose.”
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