AUSTRALIA

Whistleblowers weigh on Crown

Crown Resorts continues to feel the heat from allegations of wrongdoing at its Melbourne casino, with further whistleblowers triggering a call for a royal commission inquiry.

The company came under the spotlight for all the wrong reasons at the end of July after a former employee made allegations to 60 minutes, The Sydney Morning Herald and The Age, which teamed for a joint investigative report.

Jenny Jiang, who was one of 19 Crown employees arrested in China in 2016, made wide-ranging claims, including links to organised crime and the fast-tracking of visas for the company’s high rollers.

Since then two further whistleblowers have come forward making similar claims against the company, which directors have vehemently denied.

One included a former limousine driver who also detailed how Crown helps VIPs to bypass customs. He was speaking to Tasmanian MP Andrew Wilkie, who is known as an antigambling crusader.

The whistleblower, speaking on condition of anonymity, told Wilkie that casino employees are expected to ignore or facilitate the law breaking, under a system known among staff as “Crown law.”

The driver says Crown staff will procure drugs or sex workers for the overseas high rollers who are flown into Melbourne Airport on private jets, bypassing the official customs checks imposed on other travellers, the report said.

The third case involved security camera footage leaked, also to Wilkie, by unnamed officials from Victoria, that show bricks of money changing hands in a VIP room in Crown Melbourne.

The first case, which received global publicity, triggered a series of probes, including by Australia’s Criminal Intelligence Commission and by Victoria’s gaming regulators.

However, Wilkie has argued that it’s time for a royal commission, a much deeper level of inquiry.

“This crisis at Crown is multinational, multi-jurisdictional and multi-agency,” he told a local newspaper. “This is a demonstration of catastrophic failure on the part of the major parties, the Victorian Commission for Gambling and Liquor Regulation, Victoria police, the Australian federal police, Border Force and the Australian Transaction Reports and Analysis Centre (Austrac).”

The federal government has so far resisted calls, while Victoria State Gaming Minister Marlene Kairouz said the presence of stacks of cash is not necessarily a sign of wrongdoing.

“But it’s not uncommon for high roller rooms to have large amounts of cash in those rooms and let me remind the member that cash is indeed a legal tender,” Kairouz said.

The legal troubles come against a backdrop of weakening business conditions for Australia’s casino operators, as the softening China economy hits VIP play.

Crown in August reported that its annual profit fell 4.7 percent year-on-year to $368.6 million.

The decline was primarily due to the reduction in VIP program play revenue in Australia, which was down 26.1 percent to $38 billion.

JP Morgan analyst Don Carducci said the company also posted higher expenses across the board.

Main floor gaming revenue only helped to offset this slightly, increasing 0.5 percent to $1.7 billion in the year.

Rival operator Star Entertainment has also seen deteriorating conditions, meaning some executives, including CEO Matt Bekier, will forego a share bonus after missing performance targets.

The performance hurdles included an earnings per share (EPS) performance of 35.2 cents per share, as well as a total shareholder return (TSR) hurdle, requiring that the company ranks above the 50th percentile compared to a defined peer group.

However, the company’s TSR for the four year period was -3.1 percent, ranking 58th among the defined peer group.

Star posted an 8.4 percent annual drop in profit to $224 million. VIP turnover was $42.4 billion, down 30.7 percent year-on-year.

On the domestic market front, the company said it saw “solid” domestic gaming growth, supported by market share gains at Gold Coast and Brisbane, and tables revenue growth of 4 percent, though chairman John O’Neill said this was not enough to offset declines in their international VIP business, which was impacted by weaker market conditions.

Tasmania to introduce one of Australia’s highest PoCs

Tasmania is set to become the sixth state in Australia to introduce a point-of-consumption tax, aimed at properly taxing wagering operators on their operations, local media reports.

Under a point of consumption wagering tax, operators pay tax to the jurisdictions where the customers are located, no matter where the operator is located. In the past, operators were taxed under a “point of supply” tax, in which operators would typically situate themselves in low-tax jurisdictions, targeting punters nation-wide.

Treasurer Peter Gutwein said the new tax will roll out on 1 January 2020, and will be at a rate of 15 percent of net wagering revenue. This has been considered by some as on the higher end of wagering taxes.

In comparison, New South Wales and Victoria have a current rate of 10 and 8 percent respectively. Gutwein said the new tax measure is expected to generate A$5 million (US$3.4 million) per annum.

Tabcorp inks NFL accord

Tabcorp has reached a multi-year accord with the NFL to be the exclusive wagering partner in Australia. The partnership also enables Tabcorp to create unique NFL content and experiences for Australian fans across its digital platforms and venues, the company said in a news release.

In addition, TAB and the NFL will combine to promote the NFL’s official Pick’em free-to-play football game. The game will provide NFL fans in Australia the chance to win weekly prizes, as well as a grand prize trip to the Pro Bowl.

Further, Tabcorp and Sky Channel will bring the NFL Network and six hours of NFL RedZone programming to Australian fans across its commercial network of more than 4,400 pubs, clubs and TAB agencies.

“We are proud to bring Australians NFL action to enhance our existing sports offering to customers and venues and complement Sky’s unrivalled coverage of Australian and international racing,” Tabcorp Managing Director Wagering and Media Adam Rytenskild said.