Why Crown’s Melbourne Casino Is Under Threat
There is a real possibility that Crown’s Melbourne casino will be no more, at least not in its present guise. Eight weeks of public hearings, part of the royal commission ordered into Crown’s affairs, have done nothing positive for the former shining beacon of Australian gambling.
Crown’s Melbourne casino is rotten from within, according to Commissioner Ray Finkelstein. The man known as The Fink in legal circles was damning of the company last week.
“Wherever I look I see not just bad conduct but illegal conduct, improper conduct, unacceptable conduct, and it permeates the whole organisation.”
The $8 billion company is already unable to operate the casino at its brand new Sydney property. Patricia Bergin’s inquiry deemed Crown unfit to hold a casino licence in Sydney. The Barangaroo resort cost $2.2 billion, but its casino is now mothballed, unable to accept a single bet.
Finkelstein is due to deliver his verdict on October 15. The Victorian government granted Finkelstein an extension while doubling the royal commission’s budget to $19.5 million. Nobody will be surprised if Finkelstein forces the closure of Crown’s Melbourne casino.
Commissioner Has Crown’s Melbourne Casino in His Sights
Finkelstein despises corporate wrongdoing, and there has been plenty of that at Crown’s Melbourne casino. He infamously banned Steve Vizard from company directorship for a decade despite regulators only calling for a five-year ban. Finkelstein is intolerant to company’s that think they are above the law.
The straight-talking commissioner is disgusted with Crown’s apparent lack of responsible gaming measures. The casino giant makes $1.2 billion per year from its pokies and table games and should do that responsibly. However, Finkelstein heard evidence of lengthy gambling binges at Crown’s Melbourne casino.
Furthermore, Crown’s annual budget for its responsible gambling team is only $1.9 million. Crown spends $500 million on marketing for comparison. A group of 12 advisors have the unenviable task of monitoring Crown’s 540 table games and 2,628 pokies.
Finkelstein is unhappy Crown’s patron can gamble $10 per spin on its machines. This is double the amount anywhere else in Victoria. In addition, 1,000 of Crown’s Melbourne casino poker machines can run unrestricted, meaning there is no bet limit at all.
“This is not beneficial to anybody other than Crown.”
Tax Dodging and Credit Card Scams
Purposely doctoring reports to avoid large tax payments does not sit well with Finkelstein either. Crown’s Melbourne casino underpaid the Victorian government between $8 million and $272 million.
It did this by illegally deducting the cost of freebies to customers from its pokies’ take. CEO Xavier Walsh knew of the practice for at least three years. Two Crown directors have called into question Walsh’s fitness for such a prominent role.
Then there is the credit card scam that came to like earlier this month. Crown’s Melbourne casino came clean that it illegally moved $160 million through its accounts. Crown allowed high rollers to purchase casino chips using a credit card charged to the customers’ rooms.
The scam broke Victorian law and Chinese laws, too; China is extremely strict about moving money out of its borders. A junior gaming staff member highlighted the issue during a training session in March 2021.
Finkelstein called the practice “a fraudulent scam” and that everyone involved would have known that to be the case.
Then there is the recent letter from Crown’s legal counsel to Victoria’s gaming minister. Crown warned a ruling against its casino licence would create significant issues for the government. It claims it could default on its debt, which would result in mass redundancies.
What Next For Crown?
Many believed the royal commission would slap Crown on the wrist and send it on its way. After all, the casino chain generates massive tax revenue for the states it operates in.
However, with an increasing number of skeletons being found in various closets, nobody will be surprised if Finkelstein bans Crown from operating a casino in Melbourne. Crown could be breaching agreements with Victoria if it diverts customers to its Perth or Sydney casinos.
These are interesting times. Australia’s live casino industry could look very different in the next couple of months.
