Victoria’s casino regulator has taken action against Crown Resorts for the third time this year, launching an investigation into the use of bank and blank cheques by gamblers that could result in a fine of up to $100m.
The Victorian Gambling and Casino Control Commission (VGCCC) is investigating Crown after findings by a royal commission that it provided credit to gamble at its Melbourne casino, which is against the law in Victoria.
One practice under investigation was the exchange of a bank cheque – a cheque issued in the name of a bank that is in many cases almost as good as cash – for gambling chips.
Another was when Crown gave chips to patrons who provided a blank cheque made payable to the company.
The royal commission, run by former federal court judge Ray Finkelstein, found that high rollers were allowed to do this at the start of a gambling session, with the amount they owed written in once they had finished.
The chair of the VGCCC, Fran Thorn, said the prohibitions on extending credit were “vital because they protect patrons from gambling beyond their means and guard the Melbourne casino against criminal influence and exploitation”.
“The royal commission found that Crown adopted practices involving the use of blank cheques and bank cheques that breached these important restrictions,” Thorn said.
A Crown spokesperson said the company was “responding to information requests from the VGCCC and will continue to fully cooperate with the commission on this and any other matters arising from the Victorian royal commission report”.
“Crown has undertaken comprehensive reforms across the business to ensure that serious compliance failures do not happen in the future,” they said. “Crown’s priority remains the delivery of its reform and remediation program to deliver a safe and responsible gaming environment.”
Finkelstein’s inquiry, which reported to parliament in October last year, sparked the other two actions the VGCCC has taken against Crown this year.
In July, the VGCCC launched an investigation into Crown over breaches of responsible gambling rules identified by Finkelstein. In his report, the former judge said Crown allowed some customers to gamble for 24 hours without a break and found its processes for dealing with problem gamblers were deficient.
The VGCCC was considering Crown’s response to the responsible gambling proceedings and said it “will make a further announcement once it has completed those considerations”.
In May, the VGCCC fined Crown $80m for allowing patrons to disguise spending on gambling as spending on hotel rooms using Chinese payment system China Union Pay.
The royal commission found Crown was unsuitable to hold the Melbourne licence and recommended a special manager be appointed to bring it into compliance.
It also recommended casino regulation be overhauled.
As a result, the VGCCC has replaced the Victorian Commission for Gambling and Liquor Regulation as casino regulator, and the fines it can levy for breaches of the law have been increased 100-fold, from $1m to $100m.
Crown was listed on the stock exchange until the end of July, when it was taken over by US private equity group Blackstone.
Meanwhile, the New South Wales casino regulator said it received a report from lawyer Adam Bell SC on Crown’s Sydney competitor, the Star, on Thursday.
Bell conducted an inquiry into Star for the NSW Independent Liquor & Gaming Authority that looked at similar allegations to those levelled against Crown.
A separate inquiry into Star is taking place in Queensland, where the company has two casinos.
