Crown Resorts Faces Victoria Discipline Over UnionPay Card Scheme

Posted on: April 5, 2022, 08:49h. 

Last updated on: April 5, 2022, 02:09h.

Erik Gibbs Read More
Expertise: Asia Pacific Gaming, Gaming Business, Global Gaming.

Crown Resorts continues to work toward overcoming its past failures as a casino operator in Australia. Star Entertainment should pay attention, as Crown will now have to respond to new charges related to UnionPay cards.

Crown Resorts
Crown Resorts’ Crown Melbourne property. The casino operator continues to receive bad news for repeatedly breaking financial and gaming regulations. (Image: Nikkei Asia)

It’s a tumultuous time for Australia’s casino industry, with Crown Resorts and Star Entertainment under the microscope across the country. They repeatedly failed to uphold anti-money laundering (AML) policies, accounting procedures, etc. As a result, both face serious financial penalties, some of which authorities have already collected.

There’s more coming, though. Neither company should feel like the proverbial light at the end of the tunnel is growing brighter. Crown continues to be a target of financial and gaming regulators more than a year after New South Wales suspended its license. Victoria decided not to follow suit but hit the operator with repeated disciplinary actions.

Victoria Regulator Goes After Crown

Last October, authorities in the Australian state of Victoria determined that Crown deserved a second chance. It didn’t suspend the operator’s license but put it on “probation” for two years.

However, that didn’t mean the company wouldn’t face future disciplinary actions. In December, the Victorian Commission for Gambling and Liquor Regulation (VCGLR) fined it $1 million over its dealings with junkets.

The Victorian Gambling and Casino Control Commission (VGCCC), which took over for the VCGLR, is presenting new charges against the Crown. The company previously acknowledged that it allowed Chinese high rollers to use China UnionPay credit and debit cards in a way that skirted financial controls. As a result, the gaming regulator wants to hold the company accountable.

For several years, Chinese VIPs could transfer money via their UnionPay cards to Crown properties without the transfers showing up as gambling transactions. Instead, they were listed as “hospitality charges.” It’s possible that over AU$160 million (US$122 million) made its way from China to Australia via Crown’s system.

The evasive system broke at least two rules in Australia. It was a violation of two counts of the Casino Control Act. The first prohibits the issuance of money or gambling chips through credit or debit card transactions. Crown also violated another measure by manipulating the accounting data to hide the true nature of the transactions.

VGCCC Lays Down the Law

The VGCCC is just now getting its feet wet as Victoria’s formal gaming regulator, although its leaders were standard features in the industry. Still, it will likely want to make sure its position of power is recognized.

Crown now faces disciplinary action for the two violations of the Casino Control Act. If it wants, the VGCCC may be able to determine other failures related to the scheme. At the very least, Crown faces a fine of up to AU$100 million (US$76 million) in addition to possible alterations to its casino license.

VGCCC Chair Fran Thorn is still mulling over what happens next and to what extent he wants to punish the Crown. However, in today’s statement, he hinted that Crown might also face additional disciplinary action. He emphasized that the agency’s greater powers are necessary to “deter Crown from engaging” in the same activity for which it is in trouble now.

Thorn added that addressing the current UnionPay card fiasco is the “first step.” That could mean that additional actions are coming.

It should also serve as a warning for Star. The Crown rival is under investigation in New South Wales and has acknowledged a similar UnionPay card arrangement. As a result, it will likely face several fines as the inquiry wraps up.