Money Laundering Scandal in Australian Casino Group
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A leading Australian casino company, Crown Resort casino group, has been indicted for money laundering. This discovery was made following a report published by a commission set up to investigate their operations.
Based on the said report, the chief executive officer of the Crown Resorts, Ken Barton, announced his resignation on the 14th of February 2021. This report has rattled key officers of Crown Resort, with the incoming chairman Helen Coonan facing investors’ pressure after Barton resigned.
Consequently, it will be interesting to determine how this plays out considering the weighty allegation levied on Crown Resort.
The Bergin’s Report on Crown Resort Operations
The Bergin Commission was inaugurated 18 months ago by New South Wales and Gambling Authority to inquire into the Crown Resort casino group’s activities. Also, the objective of the probe commission headed by Patricia Bergin is to determine if the Crown Resort can keep its license to develop a resort in Sydney. Bergin is a retired Supreme Court judge.
Consequently, they were media reports that the criminal gangs were laundering money at the casino. Based on this, an inquiry was set-up to investigate Crown Resort activities. The Crown Sydney casino project license will be withdrawn from the recommendation of the panel.
According to reports, Bergin accused Crown Resort of engaging in businesses with people linked to the mafia and organized crime. Also, Bergin added that the company would have embarked on a series of reforms to avert meddling with the mafia and organized criminals but failed to do so. More so, Bergin summarily highlighted important values that Crown Resort lacked:
Poor corporate governance
Deficient risk management
Poor corporate culture
The retired Supreme Court judge added that Ken Barton displayed a “breathtaking lack of care”. During the hearing, Ken Barton and other top officials of the company testified too.
Crown Resort Staff Jailed in China for Luring Gamblers
The inquiry commissioner Bergin also discovered that some staff of Crown Resort had been jailed in China. In her report, Bergin also stated that Crown Resort facilitated money laundering and exposed their staff to risk in foreign jurisdictions.
A few months ago, two Australians working with Crown resort were jailed for nine months after they admitted that they were promoting gambling in China. However, about six served at least ten months in a prison sentence. Also, Jason O’Connor, an Austrian Crown executive, was jailed too. He received a ten months jail sentence.
Sometime in October 2016, the Crown Resort staff was arrested by Chinese Police for promoting online casino gambling for real money in mainland China. Apart from the jail sentences, Crown Resort was fined USD 1.26 million. Based on this, Crown Resort had to slow down on its investments in Macau. In fact, after a while, the company sold all its assets in Macau.
Overview of Crown Resort Casino Group
Crown Resort is the biggest hotel-casino company in Australia. Before his resignation, Ken Barton was the CEO of the company from 2014 to 2020. Australian billionaire James Packer has a 36 percent stake in the company.
What’s more, Crown Melbourne has more than 2,600 electronic game machines (EGM), 540 tables, and three hotels. Another subsidiary of the company is Crown Perth, with over 2,000 EGM’s. Furthermore, the companies plan to expand their operations to Sydney lead to the probe that lasted for 18 months. The Crown Sydney casino project, upon completion, would be the biggest gaming resort in Australia. Some facts of the project are:
Cost: The cost of the Sydney casino project is about AU$ 2.2 billion (US$1.5 billion).
Facilities: It has a 350 room hotel and 66 residential apartments. Also, a 71 story tower would be erected at the location. It would also have a 65,498 square foot gaming facility.
The Crown Sydney project was billed to be commissioned this year. Considering the report of the inquiry, Crown Sydney may not see the light of the day.
Consequences of the Bergin Report
Firstly, Crown Resort will lose its license to operate in Sydney. Also, it is more likely that other government agencies may come after the company’s management. However, whether legal actions will be taken against the company is not yet known.
Recently the chairman of Crown Resort, in an interview, has promised that the company is going to improve its governance, compliance, and culture. Will this be enough to wipe off the black spots this inquiry has revealed?
To regain investors’ trust, the Chairman of Crown Resort casino group has promised that the company will be proactive and take measures to clean this lousy dent in their image. The end is yet to be seen.