Crown has to accept severe judgment
Many casino fans have been following the negative headlines and the for months Allegations against the Crown group, which operates several casinos in Australia. Last year, as a precaution, the license for the newly built casino in Barangaroo was revoked. In the last few days, a verdict has finally been passed that was not in favor of the company.
New license not just withdrawn temporarily
The Crown Group has to cope with the toughest measure a casino can experience: the license for the newly built casino in Barangaroo has been completely revoked. At least Crown is not allowed to open this casino in the near future. Theonly consolation is that Crown has the opportunity to redeem himself again and get a license for Barangaroo sooner or later. But what does the company have to do about it?
Crown needs to regain itsstatus as a reliable casino. To this end, the casino is no longer allowed to maintain contact with the junket operators who accompanied rich people from China to the Crown Casinos. This happened as part of the so-called gambling trips. Crown never had official approval to allow these individuals into their casinos. According to the law, no foreigners are allowed to enter the casinos in whose country gambling is prohibited. Gambling is banned in China, except in Macau. For this reason, no Chinese should have entered Crown's casinos.
To make matters worse, they are primarily members of criminal organizations. These should certainly not have appeared in the casinos. It was only through this group of people that money laundering was carried out via the Crown Casinos.
Contact with Ho's family was a big problem
Another problem that caused Crown to be criticized was contact with Stanley Ho's son. Stanley Ho undoubtedly belongs to criminal organizations which is why under the terms of the license Crown is not allowed to have any contact with him. However, the owner James Packer did not stick to this and even tried to complete a stock deal with Ho's son. Among other things, this situation was fatal to the Crown Group. Whether the current CEO could have guessed this has not been clarified. Theacting CEO at least denies that he knew anything about this.
In the course of the investigation, the business accounts of the Crown group were also examined. The result was devastating: theaccusation of money laundering could be confirmed, which is why Crown is classified as unreliable. For this reason, the group's license for Barangaroo was revoked. How long it will take for Crown to be trusted has not been revealed. However, one thing is clear: It will certainly take a relatively long time before this group is again classified as safe and trustworthy. Only then will the license for the new casino be granted.
Possible rescue measures for Crown
Crown's current CEO admitted a few weeks ago that there are security gaps in the company. This was also confirmed by the investigative committee. Among other things, the grounds for the judgment stated that there was poor corporate governance,poor risk management and a bad corporate culture. However, Crown can do something about these accusations:
- Contacts with Stanley Ho are no longer allowed
- James Packer must stay out of all dealings
- A compliance and financial audit must be introduced
Should Crown successfully comply with all these regulations and measures, the prospects are very good that the already completed casino will open in Barangaroo.
Crown has already announced that they will implement the measures immediately. It has already been decidedto introduce a compliance audit. These measures include training some employees and providing them with a certificate. This should be renewed at regular intervals.
Another measure is torelease James Packer from all business. He had already retired from business in 2016, but apparently only officially. In order not to take any risks here, there will also be personnel changes on the Management Board. If these measures are not implemented, a license for Barangaroo looks bad.
Possible new law in Australia
Who thinks that a single casino could be the reason thelaw changes for an entire country? In the case of Crown, that could indeed be the case. Following these allegations and investigations,South Wales is considering changing the existing laws. Such a change is intended to prevent Crown's history from repeating itself. Some paragraphs are to be changed, which will lead to greater transparency. At the same time, it should be forbidden for Australia's casinos to work with the junket operators. In addition, all casinoswill be obliged to hire a compliance auditor.
All of this is done in the hope that no more money laundering casinos will do. Of course, there must be a corresponding authority that monitors such regulations. Therefore, the legislator has the idea that anindependent regulatory body will be created. This is to be called the Independent Casino Commission. Part of the resulting costs should be transferred to the existing casinos.