Melbourne's Crown casino faces fines of up to $100 million for a scheme that allowed the illegal transfer of funds from China, Victoria's new gambling watchdog has said.
The Victorian Gambling and Casino Control Commission (VGCCC) on Tuesday told Crown Melbourne Limited it had launched disciplinary proceedings into what was dubbed the "China Union Pay process".
The process was uncovered at Victoria's royal commission into Crown's licence, which found the casino allowed foreign punters to use a Chinese-based bank card in order to gamble in Melbourne.
Between 2012 and 2016, Chinese nationals could not transfer more than $US50,000 per year out of the country.
The royal commission found that during that time, Crown devised a scheme where it would issue false receipts for hotel services.
The guest would then pay the bill using a China Union Pay bank card, be given a voucher, and immediately exchange that voucher for gambling chips.
The scheme was found to be in breach of the Casino Control Act.
The Royal Commission into the Casino Operator and Licence ran in mid-to-late 2021 after years of allegations of wrongdoing uncovered by the media and whistleblowers.
It heard what commissioner Ray Finkelstein called an "alarming catalogue of wrongdoing", including evidence of links to criminal gangs and repeated breaches of money laundering laws and the casino's contract with the state.
The final report recommended Crown Melbourne should be given a two-year grace period to correct its "disgraceful" conduct or face losing its licence.
The new VGCCC was set up to replace the heavily criticised Victorian Commission for Gambling and Liquor Regulation in the wake of the findings.
The new watchdog has more powers than its predecessor and can issue fines of up to $100 million, compared with the previous $1 million.
It also has powers to vary the casino's licence or direct it to take rectification steps.
Crown 'working cooperatively' with watchdog
This is the first major action launched by the VGCCC since it was set up.
In a statement, VGCCC's chair Fran Thorn said she welcomed the new powers, saying they were "needed to deter Crown from engaging in the conduct that was revealed during the Royal Commission".
"As a first step, we are acting on the royal commission's findings that Crown's China Union Pay process breached important Victorian regulatory obligations, was illegal and constituted serious misconduct," she said.
A Crown spokesperson confirmed the casino had received the notice from the VGCCC.
"Crown has acknowledged the seriousness of its failings in engaging in the China Union Pay practice which we ceased in 2016," they said in a statement.
"Crown is currently reviewing the notice and will be working cooperatively with the VGCCC to close out this and all other outstanding matters stemming from the Report of the Victorian Royal Commission.
"Crown's priority remains delivering on its reform and remediation program to ensure Crown delivers a safe and responsible gaming environment.
In February, Crown Resorts agreed to a $9 billion takeover bid by US private equity firm Blackstone.
Crown is Victoria's biggest single-site employer and represents a significant portion of the state's economy.
