IMGL Magazine January 2023

AUSTRALIAN CASINO REGULATION

associated with the organisation and conduct of the gaming operations of a licensed casino. In general terms, each of the Bergin Inquiry, the Victorian Royal Commission and the Western Australian Royal Commission (together, the Crown Inquiries) found that: • the relevant casino licensee had engaged in conduct that was in breach of the relevant licence conditions and/or State legislation; • the relevant casino licensee was unsuitable to hold a casino licence; and • Crown Resorts (and its associated entities) was not a suitable associate. Importantly, none of the Crown Inquiries made a recommendation that the relevant casino licence be cancelled or suspended. Rather, each made several recommendations for the Crown Group to achieve suitability, particularly in connection with the following matters: • corporate structure, conduct of operations, corporate governance processes and responsibilities, including: • ethical conduct; • risk management and oversight; • ownership structure; • board composition (specifically board independence and board tenure); • remuneration and incentivisation of directors and senior executives; and • consumer protection and responsible gambling. Additionally, various recommendations were made for: • an increase in the regulatory oversight of the Crown Group, including the appointment of an Independent Monitor (in New South Wales) and a Special Manager (in each of Victoria and Western Australia) to oversee the remediation to be undertaken by the Crown Group and provide progress reports to the relevant gambling regulator (but, importantly, not to have the responsibility to be involved actively in the management and operation of the relevant Crown casinos); and • changes to be made more generally to the casino regulatory framework in each of New South Wales, Victoria and Western Australia. Importantly, all of the recommendations made by the Crown Inquires have been accepted by the relevant gambling regulator (and State Government) in each of the relevant States and have either been implemented or are in the process of being implemented.

As mentioned above, the most far-reaching outcome of the Crown Inquiries has been the consequential effect on the regulation of the entire Australian casino (and gambling) sector, with increased regulatory oversight and enforcement action and an overhaul of the existing regulatory framework. However, as expected, the Crown Inquiries had an immediate effect on the Crown Group: while internal changes have been made by the Crown Group to address the issues raised in the Crown Inquiries relating to corporate governance and the general conduct of its casino business, various Australian regulators have also begun conducting investigations into the findings of the Crown Inquiries with a view to taking independent enforcement action against the Crown Group for breaches of casino licence conditions and State legislation. These investigations are ongoing and have, to date, led to the imposition of significant monetary penalties. Currently, the Crown Group is subject to the following additional enforcement action: Victorian Gambling and Casino Control Commission (VGCCC): Since April 2022, the VGCCC has commenced various disciplinary proceedings against Crown Melbourne in relation to the findings of the Victorian Royal Commission. In summary, the Victorian Royal Commission found that Crown Melbourne: • had devised the “China Union Pay process”, a process that allowed patrons to use credit or debit cards to access funds to gamble at the Crown Melbourne casino, to evade Chinese currency restrictions (and to enable the illegal transfer of funds from China), and that the China Union Pay process was illegal and constituted serious misconduct; • failed its responsible services of gambling obligation through having: • breached its code of conduct for the Responsible Service of Gambling by consistently failing to intervene to prevent gambling harm, frequently allowing customers to gamble for long periods without a break, at times for more than 24 hours; and • failed to comply with a statutory direction by the regulator to take all reasonable steps to prevent players from using devices to simulate ‘automatic play’ when gambling on electronic gaming machines; and • had utilised an illegal “bank and blank cheques practices”,

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IMGL MAGAZINE | JANUARY 2023

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