Crown Resorts knows that its livelihood and future as they currently stand are on the ropes. As the casino operator faces increased scrutiny over its operational integrity across Australia, it has to know that its fate has likely already been sealed. However, as it looks to stave off any further damage or public relations nightmares, Crown is promising to make a couple of changes that it hopes will keep gaming regulators and government authorities from making any rash decisions. It has announced that it will no longer work with junkets and plans on transitioning all of its casinos to cashless operations.
No Junkets, No Cash, No Worries
Crown Resorts has spent the past couple of years battling issues that include everything from allegations of casino management rigging slot machines to warlords gambling at its properties. It has been able to continue operating, however, and hadn’t faced serious backlash until the pressure became too much. After reports that duffle bags full of money were being laundered through at least one of the company’s properties, regulators decided that enough was enough. New South Wales (NSW) was the first to put Crown under the microscope, ultimately deciding that it wasn’t suitable to hold casino license.
The NSW investigation gave other Australian states the chance to follow suit and they’re still scrutinizing the company. In an apparent effort to show regulators that the company is proactively making improvements, even if they are years behind the times, Crown is ready to terminate its relationships with junkets and will stop taking cash at its casinos. The move, Crown hopes, will also allow it to have its gaming license restored so it can open the gaming floor of its new Sydney resort. That multibillion-dollar property opened this past December but was not able to open its gambling floor because of the NSW investigation.
Changes Mirror New Regulatory Guidelines
The severing of ties with junkets and the introduction of cashless operations at Crown was announced by NSW’s Independent Liquor and Gaming Authority (ILGA) today. They are in line with recommendations presented in the Bergin Report, the results of the state’s investigation into the company’s sordid past. In it, a suggestion was made that the state’s Casino Control Act should be updated to prohibit NSW casinos from collaborating with junkets and that tighter controls over the use of cash be implemented. The Star Entertainment Group, Australia’s second-largest hospitality company behind Crown, has already begun initiatives to cut off junkets and begin cashless operations.
Whether or not Crown’s latest moves will be enough isn’t known yet. The company is now the center of bidding war as three companies battle to take it over, but there is still a lot of work to be done before any decision is made. According to Philip Crawford, chairman of the IGLA, “Any changes to Crown’s ownership structure, including takeover or merger proposals, require the authority to consider a range of issues including … how a merged entity would operate, and the extent to which any existing agreements with Crown would need to be reviewed.”