If anything is going to come out of Victoria’s cobbled together royal commission into Crown Resorts, it will be giving the state’s gaming regulator some teeth so it can do more than slap its gums at the casino giant.
After two days of public hearings, the royal commission has revealed the Victorian Commission for Gambling and Liquor Regulation as a hapless entity, funded to the tune of $38m a year.
On Tuesday it was revealed that the VCGLR, in 2018, identified the risk of junkets facilitating money laundering and recommended how Crown could stamp out money laundering. But Crown responded to the request in an “aggressive” tone, threatening to report the regulator to the Victorian gaming minister.
It revealed much about how business is done in Melbourne when you’re at the top of the food chain. As the state’s biggest single-site employer, Crown has enjoyed cosy relationships with Liberal and Labor state governments.
So much so it was not until the NSW Bergin Inquiry’s damning findings about Crown and money laundering that Victorian Premier Dan Andrews — still reeling from the bungled hotel quarantine saga — announced a royal commission into the James Packer-backed group. And what’s more, he threatened to tear up its licence.
With tough talk like that, it’s easy to forget that the Andrews government has been in power since 2014. It’s hardly a novice when it comes to the machinations of Crown.
Commissioner Ray Finkelstein highlighted the impotence of the VCGLR when he asked what disciplinary action the regulator could take in regard to Crown’s noncompliance.
“If you make recommendations and, let’s say, all 20 recommendations were disregarded, would the next step be to see whether … the regulated firm, the casino operator, who thumbs its nose at the regulator, remains a suitable person to hold the licence?” Finkelstein asked.
The VCGLR’s Jason Cremona replied: “Yeah, I couldn’t answer the question with any confidence”.
The VCGLR wanted Crown to crack down on junket operators, or third-party gambling tour organisers, who bring in high rollers and receive rebates in relation to their level of activity at the casino.
The problem was Crown only tracked the total spend of the group and not individual transactions, granting anonymity and heightening the risk of money laundering. The VCGLR wanted Crown to gather more information about junket participants — treating them like any other customer — to mitigate the infiltration of organised crime.
Sounds reasonable, after all it would help ensure its casinos were free of crime. But Crown pushed back hard to the point it threatened to go over the regulator’s head and straight to then Victorian gaming minister Marlene Kairouz to complain.
Cremona responded to this threat, escalating it to his superiors in an email that began with “sorry to bother you”. Blessed are the meek.
It wasn’t until after the Bergin Inquiry hearings and subsequent negative media coverage that Crown ceased all dealings with junket operators last November — more than two years after the VCGLR made its initial recommendation.
On Monday, it was revealed that the VCGLR was capable of tough language, branding Crown as “unnecessarily belligerent” during its investigation of the arrests of 19 Crown staff in China in 2016. The regulator also said Crown had disregarded its position of privilege as Victoria’s sole casino licence holder.
But when given an opportunity to take action (for example, by taking Crown to the Supreme Court for contempt for withholding key documents requested under law), the regulator did nothing.
“I prepared a memo in April 2018, for our legal services area, in relation to what I considered my potential breach of Section 26 notice in that I don’t think Crown had provided materials and have been requested under the demand,” the VCGLR’s Timothy Bryant told the royal commission this week, adding that he was not aware of any further legal action.
“I would state that the focus of the investigation was to proceed on the main track of the investigation, which was what actually occurred in China and ... I was very mindful of not getting sidetracked on items or issues in relation to the provision of information, notwithstanding how important that is in the course of the investigation.”
It is similar to the bruising the Australian Securities & Investments Commission copped during the year-long banking royal commission for failing to take companies to court. As a result, ASIC was awarded with several new powers to help it intervene in cases with the potential of significant consumer detriment.
It also established an enforcement office which, eight months after the banking inquiry ended, was already gnashing its teeth with 88 potential cases under examination and 17 court actions under way. Of these, 86 related to the big four banks — Commonwealth Bank, Westpac, ANZ, National Australia Bank — and wealth giant AMP, with almost 60 individual bankers and wealth managers under investigation for potential action.
With one casino to look after, here’s hoping the VCGLR emerges with a stronger jaw as a result of Victoria’s speedy six-week royal commission.
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