AUSTRALIA

Regulators launch probesafter Crown report

Australia’s gaming industry is feeling the heat from regulators after an investigative news report levelled allegations of links to Chinese crime syndicates and money laundering at Crown Resorts’ casinos.

The joint report from The Age, 60 Minutes and the Sydney Morning Herald claimed to have studied internal documents and based much of its evidence on testimony from a whistleblower.

Jenny Jiang, a former administration and logistics officer of Crown Resorts, was one of 19 Crown employees arrested in China in 2016 and she spoke to the media outlets about the company’s business activities on the mainland.

Crown’s board of directors issued a statement vehemently denying the allegations, pointing to falsehoods and clarifying that it is standard practice for international casinos to work with junket operators.

In a letter posted on its website, Crown’s 11 directors said they were highly concerned for the company’s staff and shareholders, as “much of this unbalanced and sensationalized reporting is based on unsubstantiated allegations, exaggerations, unsupported connections and outright falsehoods.”

Crown blasted what it said were mistakes in the reporting, including the fact that a cousin of Chinese President XI Jinping had been found on one of the company’s private jets by law enforcement authorities. The jet was not owned or chartered by Crown, it clarified.

Also, CCTV footage showed a person handing over a bag of cash in a vegetable market, but did not mention that person had been barred from Crown’s casinos six years ago.

Still, Australian regulators are taking the report seriously and were swift to announce their own investigations.

Victoria’s minister for gambling, Marlene Kairouz, said she has ordered the state gaming regulators to conduct a “snap investigation” into the allegations made against Crown Resorts, which also included claims of expediting visas for high rollers.

“I’ve asked the regulator to re-examine the allegations raised as a matter of priority and report back to me as soon as possible. I’ve also asked the department, with the assistance of the commission, to examine the regulatory arrangements of junket operators.”

Much of this unbalanced and sensationalized reporting is based on unsubstantiated allegations.

In New South Wales, the regulator said it was launching a probe into a planned sale of a 20 percent stake in Crown to Melco Resorts & Entertainment.

The NSW Independent Liquor & Gaming Authority will conduct an inquiry under the NSW Casino Control Act, it said in a news release.

“The Authority is inquiring into this transaction under section 35 of the Act together with various matters raised in recent media reports published by the Nine Network, the Sydney Morning Herald and the Melbourne Age relating to Crown Resorts,” it said.

“The Authority is to have regard to the primary objects of the Act in exercising its functions. This includes ensuring that the management and operation of a casino remain free fromcriminal influence or exploitation, that gaming in a casino is conducted honestly and controlling the potential of a casino to cause harm to the public interest and to individuals and families.”

According to The Guardian, Crown sold the stake to a director of a banned company. Melco CEO Lawrence Ho was a director of Lanceford, a company owned by his father, up until June 28th, the newspaper reported.

A list of companies and people associated with Stanley Ho and therefore banned, was tabled in NSW’s parliament, the report said. One of the conditions of Crown’s license to operate a high-end property in Sydney was that Crown should not do business with anyone on the list.

The allegations have come at a time Australia’s international VIP business was already cooling off due to a slowdown in China’s economy and increased scrutiny on the junket business is seen as a further negative for high roller revenue.

Macau’s largest junket operator, Suncity Group, in August announced it was pulling out of the country. It said its decision was purely commercial due to high operating costs and a lack of demand.

Crown settles sightline dispute

Crown Resorts has settled a legal dispute with Infrastructure New South Wales (ISNW) and will retain the view of Sydney Harbour from its new VIP property in the city.

A court previously ruled in favour of Crown to stop the construction of a development that would have blocked the sightline from its new resort. However, the government in February sought leave to appeal the ruling.

As a result of the settlement, INSW will not proceed with the appeal, Crown said. The terms are confidential. “Crown is satisfied with the outcome of the settlement and the retention of the sight lines across Central Barangaroo from the Harbour Bridge to the Sydney Opera House,” the company said.

“Crown remains focused on the delivery of the Crown Sydney Hotel Resort and welcoming our first guests in early 2021.”

Consumers bear brunt of POCT

Higher costs associated with Australia’s Point of Consumption Tax (POCT) has ultimately been passed over to gamblers, according to a note from JP Morgan.

While the intent of the POCT was to tax corporate bookmakers, JP Morgan says round pricing indicates that POCT pricing has been passed along to the gambler, which will ultimately reduce turnover.

“We maintain our view that gamblers, not corporates are paying for POCT; a catalyst for reduced industry turnover,” said the brokerage. “Short term, price increases can garner better wagering margins, albeit at the cost of overall turnover.

The impact of decreased turnover, especially for horse/harness/greyhounds is concerning when prices increase and gamblers lose wallet quicker,” added the brokerage.