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Crown is liable for a AU$80 million fine due to China Union Pay

Crown Resorts has been fined AU$80m (£45.5m/€53.3m/US$57.5m) by the Victorian Gambling and Casino Control Commission (VGCCC) in respect to the land-based operator's usage of China Union Pay (CUP) cards.

Between 2012 and 2016, the Crown Melbourne casino permitted customers to use CUP credit or debit cards to access cash for gambling, according to a VGCCC investigation.

According to the VGCCC, this illicit behaviour enabled access to over $164 million, from which the Crown generated an estimated revenue of more than $32 million.

The China Union Pay procedure was ruled unlawful and in violation of sections 68(2)(c) and 124(1) of the Casino Control Act 1991 by the Royal Commission into the Casino Operator and Licence (RCCOL) investigating Crown.

As with the CUP cards, Section 68 bans Crown from delivering cash or casino chips in a transaction with a credit or debit card. This approach, according to the RCCOL, intends to prevent gambling with illegal proceeds, promote responsible gaming, and minimise harm.

Section 124 requires Crown to maintain certain accounting records to guarantee that the management of money in Crown Melbourne is adequately managed and that Crown's taxes and other financial responsibilities are met in full.

Crown Melbourne agreed that the China Union Pay method was unlawful and "absolutely unacceptable," as well as the VGCCC's right to issue a punishment.

This is the first time that the VGCCC has utilised its enhanced enforcement capabilities as a result of legislative modifications to the Casino Control Act; the maximum permissible fine has increased from $1 million to $100 million.

“Crown’s CUP process was a clandestine, deliberate process, which not only breached the Casino Control Act but was also devised to assist patrons to breach China’s foreign currency exchange restrictions,” VGCCC chairperson Fran Thorn said.

“Crown was aware of the risk that the CUP process could be illegal but decided to run that risk. In doing so, it showed no regard for upholding its regulatory obligations. Indeed, it went to some lengths to hide what it was doing.

“Crown benefited handsomely from its illegal conduct. The fine will ensure that Crown is stripped of the revenue it derived from the CUP process and will send a clear message that it must comply with its regulatory obligations.”

Responding to the fine, Crown said: “Crown acknowledges its historic failings. The China UnionPay process ceased in 2016. Upon becoming aware of this historical conduct, Crown’s board immediately commissioned an independent investigation and shared the findings with the Victorian Royal Commission, the Victorian Commission for Gambling and Liquor Regulation (the predecessor to the VGCCC) and other regulators.

“Crown’s Board and senior management are committed to the delivery of a comprehensive reform and remediation program to ensure Crown delivers a safe and responsible gaming environment and continues to cooperate with the VGCCC on all matters arising from the Victorian Royal Commission Report.”

During the disciplinary procedures, the VGCCC discovered that, in addition to the CUP process, there were additional systems that continued beyond 2016 that allowed CUP cards to be used to obtain cash at Crown Hotels, which was then possibly utilised for gambling.

Crown Melbourne believes that these transactions do not violate the Casino Control Act and that they were not considered during the present disciplinary procedures.

However, the VGCCC has opted to conduct its own investigation into these transactions and establish its own opinion about whether more violations happened after 2016.

The VGCCC will now examine additional disciplinary procedures against Crown pertaining to the other Royal Commission conclusions, each of which may result in a fine of up to $100 million.

In October 2021, a Royal Commission report determined that Crown was unable to have a casino licence in Victoria due to its "illegal, dishonest, immoral, and exploitative" behaviour.

This assessment was based on the Bergin investigation, which concluded that Crown was unfit to run a casino in the Australian state of New South Wales. Additionally, the corporation was considered unsuitable to run a casino in the Barangaroo district of Sydney.



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