Australian casino operator Crown Resorts is coming under fire as its CEO admitted his cluelessness regarding VIP gambling activity.
The New South Wales Independent Liquor & Gaming Authority (ILGA) inquiry into Crown’s suitability to hold a state gaming license heard from company CEO Ken Barton on Wednesday. Barton acknowledged that VIP gamblers steered to Crown casinos by junket operators were “certainly a higher risk than other customers” in terms of complying with anti-money laundering (AML) rules.
But Barton (pictured), who was Crown’s CFO before assuming the CEO reins in January, expressed ignorance of the fact that the Suncity junket was operating a “cash desk” and facilitating large cash transactions with high-rollers in its VIP gaming room at Crown Melbourne.
Evidence of these transactions surfaced last October when local broadcaster Nine aired security camera footage showing individuals handing over ‘bricks’ of $50 and $100 bills to Suncity staff, bypassing the casino’s main cashier cage and the extra scrutiny that comes with more traditional deposits.
Barton claimed to have only learned of this activity after the video was broadcast, a claim that ILGA Commissioner Patricia Bergin found “just extraordinarily troubling.” Bergin noted that these types of transactions had apparently gone on for years, and Crown’s apparent inability/unwillingness to police such behavior “has really reached debacle levels.”
Barton also struggled to justify Crown’s dealings with banks, particularly via two companies set up to enable funds transfers between gamblers and its casinos. Southbank Investments and Riverbank Investments were both dumped as clients by major banks due to the volume of transactions that appeared structured to slide under the AU$10k reporting limit.
Barton admitted that Southbank and Riverbank weren’t part of Crown’s AML reporting, but again claimed to have only learned of this after media reports in August 2019. When Bergin asked if this knowledge wasn’t something that a proper CFO would have possessed, Barton said he’d relied on experts to assure him everything was tickety-boo.
Barton expressed ignorance over reports that a Commonwealth bank subsidiary had closed Crown’s New Zealand accounts due to money laundering concerns. Crown’s AML general manager Louise Lane reportedly pressed the bank to keep the accounts active, which even Barton agreed was “not an appropriate role” for an AML compliance officer.
Crown founder James Packer is expected to appear at the inquiry next week, and he’ll likely be grilled on reports that Barton was providing him with daily updates as to Crown’s situation, a fact that Barton didn’t publicly reveal at the time, while keeping other shareholders in the dark.
The inquiry previously learned that Crown chose to ignore warnings that its promotion of gambling to customers on the Chinese mainland was irritating the local government. Chinese authorities later arrested 19 Crown staff in 2016, some of whom spent months in prison before being released.
Should the ILGA conclude that Crown is unsuitable to receive an NSW gaming license, the company’s in-development Crown Sydney project will face an uncertain financial future. Should the ILGA decide to amend Crown’s license to restrict the Sydney casino’s ability to deal with junkets, Crown maintains that the state could be on the hook for billions of dollars in compensation.
That clause in Crown’s contract with the NSW government is but one curious aspect of a deal that was widely viewed as suspect from the start. Former NSW Premier Barry O’Farrell was pilloried for bending over backward to ensure Crown got the best of the negotiation and it remains to be seen whether a rejection of Crown’s license means Packer is automatically named NSW premier.
