Oz Casinos: What now?

The three Crown Resorts investigations, the execution of a check on the Star Entertainment Group, and a host of other revelations related to money laundering, Asian junkie ties, tax evasion, and more, have been concluded for the Australian casino industry.

Once the gold standard for gambling in the Asia-Pacific region and to this day the workplace of many of the region's leading gambling executives, Australia's casino industry has suddenly found itself in limbo.

Following the Crown Resorts investigations in New South Wales, Victoria and Western Australia, and the ongoing investigation of the Sydney Star in its fight against money laundering, at least one state minister has questioned whether Australia's casino industry is needed in general.

At the end of March, NSW Transport Minister Rob Stocks said the Crown and Star investigations "will have a significant impact on the regulatory landscape facing casino operators" and "will set off a chain of consequences that should put the future of casinos in doubt at NYU."

"Basically everything, everything, everything, everything," Stocks said, referring to initial media investigations that found Crown and Star contributed to money laundering, organized crime, fraud, foreign interference, and enriching gamblers with organized crime. The tax evasion revelations also completely undermine the argument that casino activity is justified on the basis of the revenues they bring in to support broader social public goods.

At first glance, such comments may seem far-fetched. After all, as IAG told a former Australian regulator who asked not to be named, casinos create jobs, bring in significant tax revenues (despite the tax evasion scandal at Crown Melbourne), and attract thousands of people every day, which makes them safe places for people to gamble.

"Safe in the sense that the games are offered fairly and that if you ask for your money you get it back," the regulator said. "If there were no such safe havens, casinos would still exist, but they would do it illegally.

But the future of Australia's 14 casinos, especially the big five operated by Crown and Star, may not be as clean as it seems.

David Green, an industry veteran and former adviser to the Macau government, said: "There are real questions now about where the whole industry is heading.

One challenge that's not going to go away is that the government now has to rethink the risk-reward equation for the whole industry."

"The Productivity Commission has the ability to say pretty much anything in its favor, to take another look at the question: 'Is investment in this industry really justified on the numbers?' And when doubts arise, I believe some states, if they have the right government, have every opportunity to decide that this is all too hard and get everything back on track."

Crown has yet to obtain a casino license for Crown Sydney, having been deemed unsuitable in February 2021.

Of course, the industry is eager for constructive change, for example from an operations perspective, and also in terms of how Australian casinos will be regulated in the future.

Regulation has been a focus of all three inquiries into Crown resorts over the past two years, calling for a complete review of the regulatory structure in FL (where Crown Sydney is located), Victoria (where Crown Melbourne is located) and Western Australia (where Crown Perth is located).

The first review, commissioned by Commissioner Patricia Bergin in 2020 to determine whether Crown is suitable to hold a casino license in New South Wales for its A$2. 2 billion Sydney project, not only found Crown not to be eligible but also recommended the creation of a new regulator. The Independent Casino Commission (ICC) was created as an "independent, independent, self-contained, dedicated casino regulator with a significant framework to address existing and emerging risks to the gambling industry and casinos".

In August 2021, the New South Wales government announced it was considering a "review of the casino regulatory structure" in the state, based on the advice of the Bergin Report.

Commissioner Patricia Bergin acknowledged that Crown is not eligible to hold a casino license in New South Wales.

It is extremely fundamental that the casino management and operation in Southwales are extremely basic from the impact and operation of crime, "the government mentioned Crown Sydney and Star Sydney.

According to a survey by the Royal Committee of Crown Melbourne last year, the Gemble Alcohol Adjustment Committee (VCGLR) in Victoria, a completely new regulatory organization, Genzers Casino Management Committee, Victoria (VGCC). Instead, it has been monitoring all gambling operations in the state, and has a casino coordination department that handles most Crown Melbourne.

In Perth, the final report of the Tsurist Casino-Casino Committee, published in March 2022, gave a sharp evaluation of the Western Australia coordination system, saying "it does not fit the purpose". Requested to replace.

"It was incomplete from the beginning and could not meet the legendary goals of the Casino Corps eligively," said the report.

"We have also pointed out that there are many flaws about the gaming and betting committee's opportunities related to casinos and gambling and how direct responsibilities have been realized."

Crown Resorts has appointed Steve McCana as the highest executive officer and managing director last May.

In addition, the report said that "the risk adjustments related to the organization and implementation of Perth Casino's gaming business were lacked," because it was unable to access funds and necessary resources. "The defect of this adjustment was a factor in License, Perspective Casino and their partners, that have not reduced these risks from the past to the present."

The Western Australian government has not yet approved what the effects will have, but is likely to have new regulatory authorities as a regulatory authorities that are likely to be operated in Victoria.

In fact, in Victoria, it has already been suggested what this means for casino operators. The new VGCCC has announced a disciplinary procedure for Crown Melbourne for illegal introduction of the Chinese UnionPay card.

The Royal Committee devised the Chinese UnionPay-process to continue the Chinese money and illegal transfer of funds from China, and as a result, gorgeous Chinese patrons were in 2012 to 2016. He helped to receive up to 160 million Australian dollars (US 122 million countries) until the stage, which was disguised as a friendly affection, but was used in return for gambling.

According to the Royal Committee's survey, the laws on casinos in Victoria have been amended, and the maximum fine for violating the Casino Management Law has reached a million Australian dollar (US $ 720. 00) to 100 million Australian dollars (US $ 72 million). It is noteworthy that the authority of the authorities has greatly expanded. The disposal of VGCCC against the crown indicates that a new reality has begun for business operators, and businesses will face a serious result, not just fla t-handed acts. Was explained.

"I hope that such aggressive measures will increase in order to clarify that regulatory authorities are serious," he says.

The penalties in Victoria are interesting examples of giving regulatory authorities to prevent it.

"In other words, this is a part of it, not only increases the size of the stick, but also the application is increasing. It will be much more important than before.

Despite these shocks, the impact on the entire industry is unknown, given the conditions imposed on the crown license and the fact that the Sydney case of Star is continuing in the Sydney case.

In March, Matt Bekia retired from Star Entertainment Group's management and general director.

Melbourne and Peleto's royal committee acknowledged that the crown was ineligible for license, but can continue the casino business under the guidance of a special manager who has the right to supervise and manages the crown business. Acknowledged the annual period.

In the final report, Ray Finkelstein, who led the Victorian State Royal Committee, said in the final report, "After [2 years], the regulatory authorities are suitable for Crown Melbourne to hold a casino license. We must judge whether we were convinced that we would meet public interests. "

In the framework of the reform program, in accordance with the recommendation of Bargin's report, Crown said goodbye to 10 of the eleven directors who had already become directors at the end of 2020, and only Jane Harton survived. Steve McCan, a former representative of Lend Leasing, was appointed Crown Resort's highest executive and managed director and former National Bank of Japan, a former moner laundering expert. -The Blackburn was appointed a new chief specialist in the crown that met the regulation requirements at the end of 2020 and fights financial crimes.

The company has also expanded its own team to compete with economic cruelty, risk, and legal claims and serious gambling, and in that text, it is more than used to use it. The same department in 2019, which is proven to be 30 million Australian dollars per year ($ 22 million).

This is not enough to obtain the permission from today's New Southwales regulatory authorities, which is not enough to control the final invention of alcohol, gambling, and crown cidney. The nipple operation has been working since December 2020. In recent months, Irga has already placed a rival on the right from the home city through Sydney Bay, and has already been rumored to be canceled while waiting for the results of the Star Sydney test. The number has been pointed out.

A long time ago, the company suggested a crown in the absorption process to vote for $ 8. 9 billion (about 640 billion yen) to propose a South American Investment Giant Blackstone Group. It is not yet clear what Blackstone is thinking about the crown, but according to a version, the company seems to want to improve his work and then realize his real estate as separate assets. 。

Although he can only guess the fate of the star, Matt Bekia, Chief Executive and General Manager, had been like a ghost for a long time in March. Almost everyone was waiting for the successor of John O'Neill, and as a result, his fate will be in the enforcement chairman for a while while the company is looking for a lon g-term successor to Bekia. However, for O'Neill, he was rather surprised rather than a surprise-he increased his annual salary of $ 5 million ($ 1 million).

Sydney star

"It is difficult to assume that the actual board of directors is actually left, and I believe they have made mistakes by the actual appointment of John O'Neill," the IAG said. I said once the source of information.

"He took care of Helen Kunan, who was not completely hired by the Emperor's Committee in Victoria (CEO) in February 2021 (CEO), and direct duties of the board of directors. I can't really trust the star.

The Star's findings from the hearings, at least so far, have focused on money laundering regulations and the relationship with Asian junkets, and have not touched on the additional issues around serious gambling and tax evasion that continue to concern Crown. But there's more: ILGA recently confirmed a request by serious man Adam Bell SC to extend the trial by two months to allow for new witnesses and corroborating investigations. Bell's final report is due to be delivered in August, and depending on its outcome, it might not be surprising to see Queensland, home to The Star Gold Coast and the A$3. 6 billion Stars Wharf Brisbane project (due out in 2023), provide a personal education on the company's conduct. The Star Gold Coast

"Whether Star likes it or not, the idea has been created that Star is behaving just as badly as Crown Airlines.

"But the fact that Star takes China UnionPay cards, like Crown Airlines, is enough. And it's also enough that [junket promoter] Suncity Group goes into the casinos in private rooms."

For now, all we know is that the days of junkets camping out in Australian casinos are over, casting doubt on the future ability of operators to attract international players -- especially given the tightening of AML and KYC (Know Your Customer) controls that are set to be frozen by default.

The issue is further complicated by the fact that China is waging a war on cross-border gambling, which has already led to a decline in the Chinese VIP market in casinos around the world, and which is now undeniable in Macau.

China's cross-border gambling war is affecting VIP demographics around the world, including in the Macau Special Administrative Region.

"I think there are real problems with the commission-based gaming model," Green explains.

"In real time, in Fresh Midday Wales and Victoria, they can offer loans to non-residents who come to play commission games, which could potentially recruit players from outside China. Smaller casinos, for example Adelaide, have been doing this for many years, attracting players from Malaysia, Thailand and beyond, but the question is whether they can guarantee the same scale and number of games that are important to support this business." "It's important to remember that this is a volatile part of the business. Unless you have a pretty good selection of stable commission games, you're pretty likely to make bad losses unless you actively control the table spreads."

"So I don't feel any particular optimism about bringing forward some of this business. Yes, people will be commissioned, but the class business will have to leave Australia."

While Crown and Star have announced similar impacts on the international VIP market in 2019 - the sector was within 23% of Star's woes and 25% of Crown's - there are concerns about the upcoming woes of Crown Sydney, which was purposely built for Asian VIP customers. For example, its license does not allow poker (gaming) machines.

Crown Sydney is a classic case of a 'white elephant', built for a market that can no longer make a living or is not making a lot of money," Green adds.

In the major casino playgrounds of the United States, fresh half-legs Wales and Victoria must implement cashless payments within the framework of agreements aimed at raising money laundering and serious gambling control.

In March 2021, ILGA announced the execution of the contract with Star and Crown, and the transition to non-cash gambling with the support of non-cash card technology linked to each person's personality and recognized financial institution.

"The most important thing is to be able to trace the origin of the funds," said ILGA Chairman Philip Crawford at the time. "This is completely consistent with KYC technology and the rules under which banks operate."

In Melbourne, it is planned to regulate card games in a unified manner in all gambling games at Crown Melbourne.

It is still unclear how this will affect operators, but experts at the branch believe that short-term pains can be wrapped up in long-term benefits.

"After all, how many 40-year-olds are going to dress up with cash?" - I once asked my former boss.

"This may lower Crown's profits because of people who essentially do not want to discover information that they have cash, but ultimately the casino will benefit. In any case, Crown already has a large number of odds for the calculation of cash. "

So what is the future of Australian casinos really? A definitive answer to that question will only be known in two years, when special managers assigned to oversee Crown's work in Victoria and Perth finish their personal terms and legal authorities consider whether the company has truly returned to fitness.

There are still other areas of focus for each of them.

"You have to ask how in this case, the only two casinos at NYU are being run by unqualified parties. The optics in this case are bad, and so are the results.

I think the idea that it's "too big to fail" is nonsense. I was very surprised that Commissioner Finkelstein at the Victoria Royal Commission seemed to accept this way of thinking. Some of these revelations were so blatant.

"On the other hand, if you compare casinos with other social ills, there's no doubt that the harm profile associated with casino gambling is much lower than those. Look at the number of alcoholics in our society. We talk about responsible alcohol provision, alcohol packaging, alcohol advertising.

Unfortunately, there is a tendency towards a "bad state" on this issue. Personally, I don't like casinos much, but I do admit that they are preferred as a means of entertainment.

"But in the future, if you want to have an industry, you should fully understand that you have to play by the rules.