Australia Markets closed

Crown Casino scandal: Should we be surprised?

Crown Casino logo. Image: Getty

“Whistleblowers ... refer to Crown as The Vatican, because of the attitude among Victorian politicians and police that Crown is treated like an independent city state where the normal laws of the land don’t apply," independent MP Andrew Wilkie said to Parliament last week.

He was seeking to have Crown Casino probed by the state’s anti-corruption authority over claims of money laundering, poker machine tampering and domestic violence.

But within days, that litany of sins expanded to include links to Asian organised crime, as Fairfax and Nine’s joint investigation revealed.

The goal, the investigation alleges, was to attract Chinese high-rollers to the Aussie casinos, with the criminal syndicate involved also using Crown-linked accounts and high-roller rooms to launder funds.

Now, as Crown’s half-complete Sydney casino continues development, Commissioner of the Australian Border Force Roman Quaedvlieg has expressed doubt to Nine over whether Crown can be trusted to open another casino in Australia.

Crown Resorts’ share price plummeted at start of trade on Monday 29 July.

But, should we be surprised?

Australian casinos are worth a lot to both tourism boards, and companies.

And the Chinese market is lucrative - something Crown Resorts has historically been well aware of.

As it noted in its 2013 annual report, Chinese customers were the driving force behind its VIP Program Play turnover.

And, its controversial Crown Sydney tower - still under development - was birthed with these gamblers in mind.

“In Crown’s view, Sydney has a significant opportunity, as Australia’s international gateway, to capitalise on the enormous growth in Asian tourism – particularly high net worth tourists from China,” Crown’s 2014 annual report reads.

“Crown believes that to realise this opportunity, Sydney needs a luxury hotel resort whose design, construction and operations are of world-class standard.”

According to IbisWorld, the Australian casinos’ industry has an annual revenue of $7 billion with 28,000 employees among the nine major businesses.

While the volume of Chinese high-rollers fell after 19 Crown Casino marketing staff were jailed in China for promoting gambling, the new breed of tourists - well-heeled families and tourists, as Star Entertainment Group chief executive Mark Bekier said, can be just as lucrative.

Sydney’s contentious lock-out laws, introduced in 2014, extend as far as Darling Harbour, leaving the harbour city’s major casino, Star City, free to continue operating as normal.

Then-Premier, Mike Baird was nicknamed “Casino Mike” over the decision to exclude Star City from the lock-out laws, despite the venue having one of the highest rates of violence in Sydney, according to the Australian Bureau of Statistics.

Is gambling culture the bigger problem here?

While the lure of cashed-up Asian tourists is undeniable, Australians are just as obsessed with gambling - something the industry is aware of.

According to Problem Gambling Australia, more than 80 per cent of adults engage in gambling of some sort - the highest rate in the world.

And the 2010 Productivity Commission’s Inquiry into Gambling found around 6,800 pubs, clubs and hotels provide opportunities to gamble, in addition to another 4,700 lotto outlets and Australia’s 13 casinos.

In the 2015-16 financial year, Australians spent $24 billion on gambling with casinos picking up $5.2 billion of that, the second-largest beneficiary after gaming machines, which received $12.1 billion.

According to footage obtained by authorities in March 2018, Crown Casino had been providing patrons with plastic picks to hold down pokies buttons, allowing gamblers to keep playing games non-stop and play several machines at once.

To MP Wilkie, this is problem gambling.

"In April, I exposed fresh allegations against the casino and provided the Victorian Commission for Gambling and Liquor Regulation with some of the actual picks allegedly provided to casino patrons to enable them to jam poker machine buttons to allow for continuous or multiple-machine play," Wilkie said at the time.

"The unauthorised modification of poker machines, and simultaneous multiple-machine play, are in breach of Victorian law."

Outside of the major casinos, the desire to get more money out of gamblers also persists.

The NSW gaming regulator is currently investigating more than 50 venues run by Australian Leisure and Hospitality

Over claims staff had been giving pokies players free drinks to keep them gambling.

At the time, Woolworths owned 75 per cent of ALH but has since stepped away from the operations following sustained pressure from anti-gambling groups.

Today, the Alliance for Gambling Reform called for hearings into the suitability of Crown Resorts to hold casino licences in Australia.

“Australia needs a Royal Commission into the wider Australian gambling industry, and these latest Crown scandals are one of the many topics which it should examine,” Alliance spokesman Tim Costello said.

“It is time for the apparent special political and regulatory protection for Crown Resorts to end, with a ban on political donations from the company and the Packer family.”

Make your money work with Yahoo Finance’s daily newsletter. Sign up here and stay on top of the latest money, news and tech news.