WA Commission Finds Crown Perth Unsuitable but Can Stay Open

WA Commission Finds Crown Perth Unsuitable but Can Stay Open

The Perth Casino Royal Commission submitted its final report to the Government of Western Australia on 4 March. Several weeks later, the report of nearly 1000 pages is public. And it is damning. The Commission found Crown Resorts unsuitable to hold a gambling license for Crown Perth. However, the company will continue to operate. It is complicated.

Report Summary

The government of WA Premier Mark McGowan MLA examined the report and issued a statement on 24 March. The title indicated a commitment to gambling reforms on all levels. Its theme was failure on all fronts.

The McGowan Government issued a letter to accompany the public release of the Perth Casino Royal Commission’s final report. It summed up the report in a few sentences.

“The Royal Commission final report, tabled in Parliament today, found that Crown and its subsidiaries are not presently suitable to hold a gaming license, or to be concerned in or associated with the organization and conduct of the Perth Casino.

“While the final report does not make a recommendation to revoke the gambling license, it outlines a detailed path to remediation for the license holder and its associates to become a suitable operator, ensuring around 5,000 jobs are secure during this transition phase.”

Findings Overview

Some of the conclusions in the final Commission report were not surprising. The interim report hinted that the report would consist of many failures on the part of the casino operator and the government. But the 994-page final report was more critical than most anticipated.

The Commission had to answer some central questions, one of which pertained to suitability. Was Crown suitable to hold its license and run the Perth Casino?

It is not suitable “to be concerned in or associated with the organization and conduct of gaming operations of a licensed casino.”
It is not suitable “to hold the gaming license for Perth Casino.”

With that answer, there were more questions. How could Crown become suitable?

Crown needed to follow a pathway to suitability under the watchful eye of an independent monitor. That monitor must report to the WA Gaming and Wagering Commission.
Crown must overhaul its corporate and governance structure.
Perth Casino must implement new programs for risk management, money laundering, and gambling-related harm.

Pertaining to regulations, the WA Gaming and Wagering Commission was not entirely faultless. It was created in conjunction with the 1985 Casino Agreement Act in WA. However, it has not changed to keep up with the times. The framework needs to be changed on all fronts. This will change the requirements for all licensees, specifically Perth Casino.

With that said, the Gaming and Wagering Commission failed as well. Going forward with a new framework for regulatory responsibilities, it must do several things, in conjunction with the Department of Premier and Cabinet:

The Department must provide adequate support to the Gaming and Wagering Commission.
The Commission needs to identify new strategic objectives, organize itself to pursue those, and garner the resources necessary to do so.

Specific Crown Perth Shortcomings

The number of failures by Crown Resorts and its subsidiaries in Perth resemble many of those listed in previous reports in NSW and Victoria. Specific to the Perth property, they include:

Crown facilitated money laundering through Riverbank accounts.
Its money laundering program was ineffective to ensure that suspicious financial transactions were detected, reversed, and reported to authorities.
Crown permitted junkets to operate in Perth despite their links to criminals and criminal organizations.
It did not attempt to minimize gambling-related harm. Obvious solutions include changing the speed of electronic machine play and studying those effects.
Crown was not open or accountable in its communications with the Gaming and Wagering Commission.
The company did not properly address the 2016 arrests of China-based Crown staff.

Corporate Recommendations

The Perth Casino Royal Commission submitted pages upon pages of recommendations. Some of them are very specific, especially with regard to corporate governance and the business’ framework. We can try to break those down into simple directives.

The corporate structure of Crown and its related Burswood entities must adopt a new corporate structure. Everything must be documented via formal reporting. All lines of management need to connect and be transparent. Two members of a new and enlarged board of directors must be independent of Crown. New board committees will handle risk, audit, and compliance issues.

Casino Recommendations

The Gaming and Wagering Commission will oversee Perth Casino’s new risk management framework to include electronic game limits. Patrons must set weekly loss and time limits with wait times and maximums in place. Those wanting to increase limits must submit documentation to request it. All players must take 15-minute breaks after three hours of EGM gambling. Other limits include no more than 12 hours of gambling in a 24-hour period and no more than 28 hours in one week. And the new maximum bet on all EGMs will be $10.
VIP (Pearl Room) membership will require documentation to prove financial abilities and other identification markers. The Gaming and Wagering Commission will periodically review said documents.

Governmental Recommendations

The Perth Casino Royal Commission went so far as to instruct lawmakers to replace the Casino Control Act 1984 with a new law. If they saw fit to revise the Gaming and Wagering Commission Act as well, they should do so. They even offered instructions as to what lawmakers should include in the new laws.

It must contain an objects clause including the three objectives of casino regulation.
It must contain a duties clause. This must include numerous duties, such as the regulation of “identified extant and emerging risks in the Bergin Inquiry and PCRC,” ongoing monitoring of strategic risks, and ongoing mitigation of gambling-related harm. In addition, it should detail the protocol for handling suspected framework breaches and money laundering tenets.
The law should list the regulator’s powers, including identifying and regulating risks.
It must require the regulator to review casino licenses at least every five years with Parliamentary oversight. All license review processes must be in the new law, including a definition of suitability. The regulator must also submit independent reports to the Minister for all casino license activity.
It must prohibit junkets unless specifically licensed by the regulator.
It will require that responsible gambling measures be considered every time the regulator declares a new game or sets or changes game rules.
Expand directions powers pertaining to all operations at Perth Casino, all regulatory measures, and all license changes, functionality, and organization.
The new law must require the establishment of an Independent Advisory Body to replace the current Problem Gambling Support Services Committee. The gambling industry will pay a levy that will fund the new body. It will research gambling prevalence and harm reduction measures.

There are a few provisions that the Commission wants to remain from the old law. Those are minimal but include the Minister’s powers regarding foreign ownership and licenses. They also want the regulator to maintain its investigative and enforcement powers.

Regulator Recommendations

The Racing and Wagering Commission must change some of its framework and duty delegations.

The regulator must employ a full-time CEO who also acts as the Chief Casino Officer, a CFO, and an assistant to the CEO and CFO knowledgeable in regulatory matters. The regulator’s Chair must be independent, appointed by the Minister, and be assigned for a term of no more than five years. Board members must elect one of their own to be the Deputy Chair.
The regulator must give the Minister guidance as to board member suitability.

In addition, the Gaming and Wagering Commission needs to determine an information sharing structure with AUSTRAC. IT should also work with AML/CTF to improve skills to manage money laundering risks.

Finally, the regulator must order Perth Casino to provide more player data. That should include betting amounts and time periods, player turnover, wins and losses, and the type of gambling products used.

The full report is available for public consumption.

 

 

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Rose Varrelli

Rose Varrelli has always been passionate about online casinos, as she’s been a player at a variety of places for years. Rose turned her personal knowledge and insight into a writing career. She aims to provide readers with the most up to date, informative news in the world of online casinos!

Author: Bob Reynolds