Crown Casino and its associated company is currently facing an investigation by the Victorian Gambling and Casino Control Commission (VGCCC), an Australian state regulator.
The investigation stems from allegations concerning CEO Ciaran Carruthers, who is said to have overruled the casino's security officers when it came to the decision of banning intoxicated customers from the premises. In response to these allegations, Crown Resorts initiated an internal investigation.
The VGCCC has expressed its intention to review the findings of Crown's internal investigation before determining any regulatory actions. Moreover, there have been reports in the local media suggesting that a minor was allowed onto the gaming floor, which has also prompted an active investigation by the VGCCC.
It's worth noting that Crown Resorts has engaged external counsel to conduct an independent review of these matters in accordance with its governance protocols. As a result, the company has refrained from making further comments until the review process is complete.
Ciaran Carruthers was appointed as CEO last year following Blackstone's acquisition of the firm for $6.3 billion, previously owned by the billionaire Packer family. At this time, Blackstone has not provided an immediate response to media inquiries regarding the investigation.
Crown Resorts, the owners of Crown Casino, has released its financial results for the fiscal year 2022-23. The renowned casino giant is under the ownership of Blackstone, Here are some key statistics on Crown Resorts:
Crown Casino: Resorts Financial Statement
- Revenue: In the financial year ended July 2023, Crown Resorts generated $2.7 billion in revenue across its casinos in Melbourne, Sydney, and Perth, as well as its private London members club and digital arm. This marked a 44% improvement compared to the previous year
- Expenses: Crown Resorts faced significant expenses, with a hefty $3 billion in costs pushing the company into a $199 million loss for the financial year 2022-2023
- EBITDA: In the financial year 2021, Crown Resorts had a total Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $114.1 million
- Net Loss: Crown Resorts posted a $945 million net loss for the year to June 30, 2022, which was attributed to expected fines and COVID-19-induced lockdowns
- Share Price: As of October 19, 2023, Crown Resorts' share price on the Australian Securities Exchange (ASX) was $13.09
Crown Resorts' 2022-23 financial results reflect a company in transition, striving to recover from past challenges while investing in compliance and remediation to ensure a more secure and compliant future.
Crown Resorts | $13 Million Gambling Reform Package
Crown Resorts has announced a new $13 million gambling reform package. The announcement was made recently. The gambling reform package comes after Crown Resorts faced three inquiries and fines totalling $700 million.
The reform package aims to replace the need for gamblers to ban themselves from the casino in person by implementing a banning system via the internet. The newly launched reform package is aimed at revolutionizing the way gamblers can ban themselves from the casino. By implementing an innovative online banning system, Crown Resorts seeks to replace the traditional in-person self-exclusion process. This move is expected to enhance accessibility and provide a more efficient and seamless solution for those seeking to refrain from gambling activities.
By investing in this reform package, Crown Resorts demonstrates its commitment to creating a safer and more accountable gambling environment for its patrons. The gambling reform package is set to be implemented across all Crown Resorts' casino operations, underscoring the company's commitment to uniformity and responsibility throughout its establishments.
Crown Casino Accepts Fines
Casino giant Crown Resorts has expressed concerns to the Federal Court regarding its ability to afford a hefty $450 million fine for breaching anti-money laundering and counter-terrorism laws. Crown Resorts has requested that the fine be paid in instalments over a two-year period without incurring interest.
The proposed settlement between Australia's financial crime regulator, AUSTRAC, and Crown Resorts, which would result in the $450 million fine, is currently awaiting approval or rejection by the Federal Court. However, Justice Michael Lee, who presided over the hearing on Monday, raised concerns about certain aspects of the proposed financial penalty. Specifically, he noted that the penalty did not account for the money that was returned to shareholders during the period when Crown Resorts violated the law.
Crown Resorts' barrister, Philip Crutchfield, emphasized that the agreement to pay $450 million was contingent upon the payment being spread over two years, with an initial tranche of $125 million. Crutchfield argued that altering the payment plan would undermine the foundation of the agreement and put Crown Resorts in a financially precarious position.
Under the proposed terms, Crown Resorts would pay $125 million upfront, followed by another $125 million within 12 months, and a final instalment of $200 million, all interest-free. This payment plan was designed to manage Crown Resorts' financial liabilities, ensure liquidity, and sustain trading during challenging market conditions.
Justice Lee expressed skepticism about describing the proposed settlement as a pecuniary penalty, stating that such a penalty would typically attract interest. He emphasized that the proposed arrangement deviates from a traditional penalty structure.
One crucial consideration for AUSTRAC in proposing the settlement was the level of cooperation demonstrated by Crown Resorts' board and senior management. However, Justice Lee questioned the significance of cooperation in determining the penalty.
If the $450 million fine were required to be paid upfront, Crown Resorts would need to negotiate with debt and equity providers. Failure in these negotiations could potentially lead to Crown Resorts entering administration.
If approved, the $450 million penalty would become one of the largest in Australian corporate history. Previous significant fines for breaches of anti-money laundering and counter-terrorism laws include Westpac's $1.3 billion fine in 2020 and Commonwealth Bank's $700 million fine in 2018.
The outcome of this case could set a significant precedent for other casino operators, including Star Entertainment Group and SkyCity, who are facing similar lawsuits by AUSTRAC for alleged breaches of the law. Crown Resorts' potential $450 million penalty is equivalent to the cost base of Star Sydney.
This ongoing legal battle is part of a broader investigation initiated in 2019, which exposed Crown Resorts' vulnerability to infiltration by international criminal syndicates and money launderers. Multiple government inquiries have deemed Crown Resorts unfit to hold a casino license, resulting in delays in the opening of its Barangaroo towers in Sydney.
Crown Resorts urges the court to respect the settlement agreement and avoid imposing penalties that would discourage reputable operators from participating in the industry.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Please consult with a legal professional for specific guidance on legal matters.
Crown Resorts has agreed to a $450 million fine. Management has admitted to the lack of checks for serious fraud and crimes. The amount still needs to be approved by the courts but the fine is the highest ever issued to a casino. This sum was agreed upon by AUSTRAC and Crown Casino and the court hearing took place between 10-13th July.
Crown, the casino giant, has been slapped with a hefty $30 million fine for violating money laundering regulations and problem gambling controls. The breach was discovered during Victoria's 2021 royal commission, which found that Crown allowed customers to deposit personal cheques into their gambling accounts instead of the company's.
The commission also found that Crown likely accepted blank cheques in exchange for gambling chips, although insufficient evidence precluded formal charges. Regardless, Crown must abide by newfound guidelines on cheque policies and investigate its Melbourne site for other potential violations. A Crown Resorts representative has confirmed the company's compliance with the commission's verdict and pledged to work with the Victorian government to address these concerns.
Crown Casino - Limits Gambling Time
On Monday, the Victorian government announced responsible gambling reforms that will be implemented at Melbourne's Crown casino. Under the new code, punters will be required to take a break every three hours and restrict gaming to a maximum of 36 hours per week. Crown Casino will need to update its code of conduct within six months to enforce these new measures. Specifically, if a person has been gambling for three continuous hours, the casino will need to enforce 15-minute breaks.
Crown Casino Gamblers Will Face More Stringent Breaks.
Additionally, anyone who has gambled for 12 hours in any 24 hours will need to take a full day off, and no one will be allowed to game for more than 36 hours in a week. However, the Alliance for Gambling Reform CEO, Carol Bennett, criticized the reforms, stating that they are useless unless they are implemented statewide, as gamblers could simply move to other establishments with no regulatory time limits. Bennett also noted that enforcing the new rules would be difficult and that the reforms should have gone further than what was recommended by the royal commission. Nonetheless, she acknowledged that the announcement is a small step in the right direction.
Crown Casino Faces Tougher Regulations
Focusing on reinforcing harm-reduction actions, tackling tax evasion, and enhancing supervision of Crown Resorts, the Casino Legislation Amendment Bill 2022 implements 12 of the 33 recommendations made in the Royal Commission Report into Melbourne's casino, which was released in October of last year.
The new legislation enacted by the Parliament of Victoria requires Crown Melbourne customers to confirm their identification, restrict their daily cash use to AU$ 1,000, and establish duration and expense limitations on their gambling sessions.
One of the most significant adjustments is the need for individuals to provide valid identification to gamble or collect a prize worth more than AU$ 1,000. The maximum amount of cash that may be used in a day is $1,000 AU.
Crown Casinos will pay out of pocket for the expenses of regulating the casino through a special fee. At the same time, anyone to control over 5 per cent of the casino will need authorisation issued by the VGCCC.
Crown's specialized safety equipment mechanism for pokies must be in effect by the end of 2023. However, they are not obligated to implement the complete set of changes until December 2025, since they will need time to develop the infrastructure and technology. It’s also been decided that Crown Melbourne has just one opportunity to change its practices. It must become compatible with the Melbourne casino licensing regulations; otherwise, their current temporary license will automatically be terminated in 2024.
Minister for Consumer Affairs, Gaming, and Liquor Regulation, Melissa Horne said that the government will hold Crown Melbourne accountable for executing an additional 12 recommendations from the Royal Commission, including those related to money laundering and damage minimization. Horne also stated that “This legislation implements world-leading reforms to make sure the failures uncovered by the Royal Commission can never happen again.”
Crown’s Perth Casino to Have Its Very Own Government Watchdog
The administration of Western Australia has appointed Paul Steel, West Australia’s Police Force Assistant Commissioner, to act as an independent monitor over Crown Perth. Steel will be responsible for determining whether or not Crown's efforts to reform are successful.
This came in response to a Royal Commission investigation from earlier this year. Crown was ruled unfit to keep its gambling license for the Crown Casino in Perth and was given a two-year window to make the necessary changes and prove its fitness, as suggested by the assessment.
Justifiably, the Independent Monitor's fees will be recovered from the casino’s resources instead of government tax funds.
The WA government chose Steel for this position as he has "decades of expertise in organized criminal investigation, organizational change, achievement of cross-government strategic objectives, and senior leadership."
Tony Buti, the Minister for Racing and Gambling in Western Australia, remarked that this is the next step in the state government's response to the Royal Commission and marks the beginning of a new era at the Perth Casino characterized by honesty, accountability, and transparency.
The Minister has made several other statements on the subject, including that over the course of over 30 years in law enforcement and criminal investigation, including in senior leadership positions, "Paul Steel has a demonstrated record of generating exceptional results."
The new laws and Independent Monitor have been put in place to guarantee that the Perth casino is being run in a first-rate manner and to restore public trust in the industry. This is what the law mandates, and what the people demand.
New Leadership To Bring New Vision to Crown Resorts
While still subject to regulatory clearance, Crown Resorts has named David Tsai, formerly of MGM Resorts, as CEO of Crown Perth. He will be responsible for implementing the Royal Commission's recommendations for Crown Perth, together with the assistance of the Crown Perth Board and the Independent Monitor, Paul Steel.
Crown has lately made a series of high-profile hires, including Ciarán Carruthers as CEO of Crown Resorts, Mark McWhinnie as CEO of Crown Sydney, and Ian Silk as Chairman of Crown Melbourne.
Who is Ciaran Carruthers?
Ciaran Carruthers is an esteemed figure in the world of casino and resort management. With over two decades of experience in the industry, Carruthers has demonstrated exceptional leadership skills and a deep understanding of the market. Having held executive positions in various renowned companies before joining Crown Resorts, Carruthers has solidified his reputation as a strategic thinker and an expert in the field. He is the CEO and Carruthers actively contributes to promoting responsible gambling within Crown Resorts and beyond. He believes in fostering a culture of transparency, integrity, and customer well-being within the company. By implementing responsible gambling policies, supporting gambling addiction helplines, and providing education on the risks of excessive gambling, Carruthers ensures that Crown Resorts prioritizes the welfare of its customers.
Crown Casino Staff
Tsai has extensive management and leadership experience, having worked in top strategy and financial roles at McKinsey & Company and earlier at Aria Resort & Casino Las Vegas. Tsai has spent the past 15 years working for MGM, giving him almost two decades of knowledge in the integrated resort industry that he will put to use at Crown Perth.
Tsai stated that he’s very excited to join Crown Perth team of 6,000 brilliant and committed employees and is certain that they will live up to their reputation of excellence. He is also committed to collaborating with them on implementing the necessary changes and repairs which will help offer clients the exceptional service the casino became famous for.
Carruthers described the Crown Casino in Perth as a world-class facility. Among its first-rate services, Crown Casino Perth can count attractions, gourmet dining, and plush accommodations. He also added that a world-class leader such as Tsai, with an established track record and vast expertise in global hospitality and entertainment, will definitely help the venue get back on track.
Crown has not disclosed when Tsai would begin actively working for the company, although they have confirmed that he will start later on in this year.
Crown Casino To Prove Its Suitability
ILGA chair Philip Crawford stated that they will be keeping a close eye on the operations and security at Crown Casino as this is a conditional license. This had been granted for a period of two years.
The casino control act has put in place strict controls to stop high rollers from abroad from operating from the casino.
Crown Resorts agreed to new commitments in order to open a casino. Crown Resorts had started supervised casino operations, taking into account reforms stemming from an inquiry that made recommendations to improve transparency and accountability for casino operators.
Will It Be Enough?
Crown Resorts now has a veritable A-Team of CEOs at the helm of its Australian venues, a professional government monitor assigned to assist them in improving their safety and security, new ownership and, supposedly, a fresh new mindset. But will this be enough to get the ailing business out of the scandal it dug itself in? Only time will tell, but we definitely look forward to the results.
