Money laundering and cover-up claims prompt calls to close casinos in Australia

Crown Resorts and Star Entertainment Group have been hit with allegations of misconduct and lack of oversight. PHOTO: REUTERS

SYDNEY - A series of inquiries in Australia has exposed widespread alleged money laundering and organised crime links involving two casino giants, Crown Resorts and Star Entertainment Group, leading to calls for the authorities to shut casinos.

Star chief executive Matt Bekier announced his resignation last week after a New South Wales (NSW) government inquiry heard scathing allegations about practices at the firm's Sydney casino. His announcement came just a year after the resignation of his Crown counterpart, Mr Ken Barton, who also faced damaging revelations.

The inquiry heard that Star's casino in Sydney disguised A$900 million (S$925 million) worth of gambling transactions by Chinese high-rollers as hotel expenses.

One gambler, Mr Phillip Dong Fang Lee, a Chinese-Australian property developer, purchased A$2.72 billion in chips over 15 years but did not always cash them. He lost just A$57 million, prompting inquiries into whether the casino properly checked the source of the money or investigated the possibility of money laundering.

Mr Lee admitted that he once purchased chips worth A$11 million in a single day using his China UnionPay debit card, even though the card was supposed to be used only for non-gambling purposes. Staff at the casino admitted failing to curb his rule-breaking transactions.

The inquiry also heard that Star worked with a junket operator that had links to organised crime. The casino ran a VIP room for gamblers brought in on junkets and allowed them to conduct cash transactions in the room - a practice that a Star manager admitted was "entirely improper" and could enable money laundering.

The inquiry, which is due to release its findings in June, could find that Star should not be allowed to hold a casino licence.

The explosive allegations follow separate inquiries into Crown Resorts that exposed similar practices. Inquiries in NSW, Victoria and Western Australia found that Crown is unsuitable to operate casinos in these states.

In Victoria, Crown was allowed to keep open its Melbourne casino - the state's biggest single-site employer - but was put under supervision. In NSW, its licence to open Sydney's second casino has been suspended.

The run of allegations about misconduct and lack of oversight at Star and Crown has prompted growing calls for Australian states and territories to shutter their casinos.

Last week, a senior NSW minister, Mr Rob Stokes, told Parliament that the inquiry into Crown had exposed a "veritable cesspit of dishonesty, tax evasion, junkets, money laundering".

"Perhaps it is time for our community to rise up against them (casino operators)," he said.

"Now is the best time to ask the question: are the illusory and ephemeral benefits of Sydney's casinos worth the proven harm - the deceit, the crime, the destroyed lives?"

Associate Professor Charles Livingstone, a gambling researcher at Monash University, said the inquiry into Star indicated that misconduct and association with criminals were endemic in the industry.

A recent reader poll by the Australian Financial Review found that 45 per cent of readers believe Star and Crown should lose their gambling licences, 41 per cent believe the boards and management should be sacked, and the remainder think the firms should be heavily fined, face criminal prosecution or other measures.

Columnist Malcolm Knox said the Australian public showed little interest in going to casinos and their associated resorts, forcing them to rely on money laundering, tax evasion and fraud to meet their financial targets.

"Enough families, individuals, MPs, anti-gambling groups, mental health and welfare experts and community leaders are firmly against the casinos retaining their licences," he wrote in The Sydney Morning Herald.

"The community has already risen up. All it waits for is a government with the courage to act."

Australia's casinos

  • First casino opened in Tasmania in 1973
  • All capital cities have casinos, which usually include restaurants, theatres and hotels
  • Crown's Melbourne casino, the largest, opened in 1994 and employs 11,500 people.
  • Star's Sydney casino opened in 1995 and is the second-largest. Star's casinos in Sydney, Brisbane and the Gold Coast employ about 9,000 people.
  • The two companies together made A$600 million (S$617 million) in profits in 2019, but have suffered heavy losses recently following the inquiries and the pandemic

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