Independent report shines light on Victoria’s gambling regulator
An independent report by a prominent QC which investigated allegations that the Victorian Commission for Gambling and Liquor Regulation failed in its role of regulating Crown Melbourne has been released.
The ABC reports that the probe has made a number of recommendations, including asking parliament to bank junkets for overseas high rollers.
Over recent years, Crown has come under scrutiny from authorities and the media over its junket operations with cashed-up Asian gamblers.
These high rollers were flown into Melbourne to play at the casino, but some had links to organised crime and posed serious risks of money laundering.
The junket operations have been central to the Crown Casino royal commission in Victoria, which is deciding whether Crown should keep its licence.
The royal commission however has not been tasked with examining the gambling watchdog, a government decision that has drawn criticism.
QC Ian Freckelton’s investigation found that internal practices for auditing the casino dropped off in 2013 and 2014.
VCGLR faces years of scrutiny before report
Internal systems for conducting compliance were also inadequate, and there was a lack of proper process to share information with police.
The state government and VCGLR have been criticised for years for not scrutinising the casino properly and failing to detect any money laundering risks.
Dr Freckelton’s report criticises the rules for the regulator, saying there was too much onus on Crown to provide probity over high rollers rather than the VCGLR.
He did note that there had been improvements since December 2020.
This corroborates assertions made in a Four Corners television story that included information about junket audits, which were reduced or ceased in 2013-14.
“It found internal control statements had been ‘significantly inadequate’ for junket operators, junket players and premium players in the past and later were found to have ‘inhibited the potential for audit checklist tools used by VCGLR inspectors to accomplish regulatory objectives effectively,” an ABC spokesperson said.
Five whistleblowers told Four Corners their concerns and suspicions about illegal activity at the casino were ignored by their superiors.
It alleged that Crown Casino was in effect running the regulator, but Dr Freckelton could not substantiate those allegations, specifically that an incident in which it was alleged a bag full of cash that was deposited was not properly scrutinised.
“There is no evidence that Crown Casino exercised undue influence and/or control over the activities of the VCGLR inspectors at the casino, such that in effect ‘Crown were running the office’,” Dr Freckelton said.
A dedicated gambling unit within Victoria Police forms part of Freckelton’s recommendations
He also said there was no evidence that the VCGLR instructed inspectors at Crown Casino that it was not their responsibility to act on criminal activity discovered at the casino.
“To a similar effect, there is no evidence that inspectors were actively blocked from looking at money laundering at Crown Casino by VCGLR management,” he said in his report.
Crown has admitted its bank accounts were used for money laundering.
In his report, Dr Freckelton said there needed to be better processes for sharing information with police.
He also recommended that more inspectors be rostered on to scrutinise the casino and said consideration should be given to setting up a dedicated gambling unit in Victoria Police.
One of the whistleblowers, Peter McCormack, who was interviewed by the review, said Dr Freckelton’s report was disappointing.
“We have been betrayed by the inquiry,” he said.
“I think they’ve missed the point.”
Mr McCormack said their complaint was that the VCGLR failed to investigate issues raised. He said he was concerned inspectors’ diaries were not reviewed as part of the inquiry.