Crown bought jets, yachts to lure international high rollers who sometimes didn’t gamble, costing millions in losses

Luring high rollers to Crown was expensive and often didn’t pay off - even before that side of the business caused huge damage.

Crown Resorts’ international high rollers were lured by private jets, luxury yachts and other special treatment, but was it worth it?

Former chairman John Alexander - the one-time right-hand man to Crown’s biggest shareholder James Packer - certainly thinks that’s a good question.

The royal commission in Perth over the casino’s money laundering scandal heard on Thursday that some high rollers didn’t pay back millions in credit and were ultimately found to be “dubious”, well before the company ditched VIP junkets in the wake of last year’s damning NSW inquiry.

The West Australian investigation heard about a costly Crown-subsidised wedding for the friends of a junket operator, which saw guests flown to the Perth and Melbourne casinos.

But sometimes international customers would choose not to gamble, Mr Alexander said.

That single wedding resulted in a $3.1m loss to the casino and was an example of the “very high” costs involved in securing international gamblers, counsel assisting Patricia Cahill suggested.

Mr Alexander agreed.

Reclusive billionaire James Packer and then-Crown Resorts executive chairman John Alexander in 2017. Picture: Mal Fairclough/AFP

The royal commission also heard details of Crown’s monthly debt schedule updates, with one junket gambler owing $29m that had been outstanding for months and another who had a $10m debt that had not been paid back for more than two years.

In the comments section, it had been written the former customer “may be under investigation in China” while the latter, according to media reports, “may have been convicted of various crimes in China”.

Ms Cahill asked Mr Alexander if he was concerned by such comments that there may be something seriously wrong with the international customer vetting and approval process.

That people “with a question mark against their character” were let in “gave cause for concern”, he replied.

“But we relied very heavily on a variety of international law enforcement agencies and the like,” Mr Alexander said.

The Perth royal commission and a separate one in Victoria were sparked by the damning findings from last year’s NSW inquiry, which denied Crown a gaming licence for its new Sydney casino. Picture:Tony McDonough

A luxury yacht was bought for international players or local VIPs and there were also high costs associated with fitting out the high-roller gambling salon and staffing it, the royal commission heard.

It was a low-margin business, Mr Alexander said.

“Having regard to the risks associated with the business ... criminal infiltration of the casino, money laundering, bad and doubtful debts, the high overhead costs, the modest revenues ... what was the commercial rationale?” Ms Cahill asked.

Before saying “That’s a good question”, Mr Alexander replied: “I think we are now as a company and as a country far more aware of the risks you refer to - the reliance on law enforcement wasn’t sufficient to protect ourselves from the quality of some of these customers.

“We had committed a lot of resources ... there was a belief at least until 2015, 2016 that Chinese tourism visitation was going to grow to Australia ... there was an expectation that things would get better.

“Other casinos ... had opened up much larger (venues) much closer to home for most of these players so the competitive pressure to do more for customers across the board in Australian casinos, at large, increased.”

Originally published as Crown bought jets, yachts to lure international high rollers who sometimes didn’t gamble, costing millions in losses