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VGCCC imposes second $1 million fine on Crown

The Victorian Gambling and Casino Control Commission  (VGCCC) has fined Crown Melbourne Limited (Crown) $1 million for disobeying a direction of the Commission and failing to comply with other regulatory requirements in relation to particular historical junket operations.

Commission’s findings

Having considered all relevant materials and information, including submissions by Crown, the Commission has determined that Crown failed to comply with its regulatory obligations in relation to junket operations. The Commission assessed Crown’s conduct regarding an individual junket operator and his associates, including actions taken by Crown after the Commission directed Crown to cease its relationship with that individual.

The Commission concluded that Crown had failed to comply with the relevant Internal Control Statement regarding junket operations as it had:

  • failed to cease its relationship with an unsuitable junket operator following a formal direction to cease its relationship
  • failed to conduct adequate due diligence with respect to an associate of that unsuitable junket operator and permitted that associate to conduct junkets
  • failed to notify the Commission of that associate, as a new non-resident junket operator, before commencement of her junket program.

Disciplinary action taken

The conduct discovered as a result of this investigation was an example of significant and serious non-compliance, in particular the failure to abide by a direct order of the VGCCC, and therefore it was considered appropriate to take significant regulatory action in relation to this breach.

As a result, the Commission has imposed a fine of $1 million. This is the maximum available at present, and reflects the serious nature of Crown’s direct disobedience following a direction by the Commission to cease its relationship with an unsuitable junket entity.

The Commission considered whether additional directions or restrictions were required but notes:

  • the Commission banned junket operations as part of its April 2021 disciplinary action (when Crown was also fined $1 million)
  • the recently passed Casino and Gambling Legislation Amendment Act 2021  legislatively bans junket operations in Victoria.

“The amount of this fine reflects the seriousness of this matter, particularly Crown’s conduct in failing to immediately implement the requirements of the Commission’s direction to cease a relationship with an unsuitable junket operator,” said VGCCC Chair Ross Kennedy.

“The VGCCC expects its regulated entities to be proactive in their compliance with regulatory requirements, and firm action will continue to be taken against those that wilfully disregard or disobey directions of the regulator,” he said.

The Commission has published detailed reasons for its decision, excluding personal information relating to individuals. A copy of this is available on the VGCCC’s Gaming Decisions page.

The junket operations subject to this disciplinary action occurred in 2015 and 2016 and the investigation into the failures by Crown involved a lengthy and complex process. However, the relationship between Crown and the individual was not ongoing during this time. Mr Kennedy said the imposition of this penalty showed that the Commission will hold to account any regulated entity which failed to comply with regulatory requirements, even when non-compliance was in the past.

The Royal Commission into the Casino Operator and Licence

This matter was not one mentioned in the Royal Commissioner’s report. Rather, it arose from an investigation commenced by the VGCCC before the Royal Commission was established and was separate from that process.

The VGCCC has been carefully considering Commissioner Finkelstein’s report and will decide what further regulatory action is appropriate in relation to the findings from that report, noting that the Casino and Gambling Legislation Amendment Act 2021  has now passed the Victorian Parliament. The Act imposes stronger regulatory obligations on the casino operator and increases the maximum fine under the Act to $100 million (from $1 million).

This is the legislation the Victorian Gambling and Casino Control Commission (VGCCC) will administer when it replaces the VGCLR on 1 January 2022.

The VGCCC notes that it commenced its consideration, issued a show cause notice and made its decision in this matter under the existing legislative provisions that contain the $1 million maximum penalty. Disciplinary proceedings conducted by the VGCCC after 1 January 2022 would occur under the stronger regulatory obligations imposed by the amending Act, including the increased maximum penalty.

Victorian Gambling and Casino Control Commission