Crown Resorts Dumping VIP Junkets for Licensed Operators
In an attempt to avoid any more drama, Crown Resorts has announced VIP Junket relationships are coming to an end.
After being in hot water for quite some time, Crown Resorts is trying to make smart decisions for its operations. This week, the company announced a huge change, no longer working with VIP junket groups at three of its casinos in Australia. Junket groups bring in big business for the operator but the organizations offering such services are considered controversial.
Cutting Junkets Off
This week, Crown Resorts spoke with investors, stating that the company is no longer working with unlicensed gaming promoting companies. This announcement comes about two months after Crown Resorts announced it was suspending deals with junket groups through next year.
A statement by the company explained the change. According to Crown Resorts, the Board decided that interaction with all junket operators will cease immediately. This is subject to a consultation with gaming regulators in three areas, New South Wales, Victoria, and Western Australia.
The only way that Crown will start working with a junket operator again is if that group has licensing or was approved by gaming regulators in some other way. This announcement comes at a time when changes are taking place inside the company due to a licensing issues in Sydney. Chairwoman Helen Coonan recently took over for John Alexander and Deputy Chairman John Horvath is no longer on the board.
Banned from Opening
The new casino resort in Sydney, valued at $1.6 billion, was expected to open later this year. However, authorities in Australia banned the opening until a full review of the company’s gambling license is completed. This will not be done until February 2021.
The decision was made by the Independent Liquor and Gaming Authority in New South Wales. It came after Crown Resorts admitted that criminals may have used bank accounts for high roller gamblers to launder money.
Chair of the Authority, Philip Crawford, said this week that the regulator was not comfortable with the opening of the casino just yet until the inquiry is completed. Crawford said it was disappointing that the operator had not decided to delay the opening themselves.
For Crown, the company will continue to focus on operating the property but switching from a gaming focus to non-gaming amenities. This includes apartments as well as a luxury hotel. Even with the non-gaming openings, the operator must consult with the Authority.
The delay is a big negative for the operator and showcases the possible severity from the inquiry findings. The Crown could be at risk of losing its license to offer gaming in the region. The inquiry is investing the Crown and if the company took part in money laundering. The investigation is looking at potential gambling law breaches along with junket operators the company was partnered with.
It was big news this week when the legal team for the Crown admitted that two bank accounts used for gambling via VIP players were most likely used to launder funds. For quite some time, the group denied the allegations within the media that money laundering activity was taking place. They even took out advertisements to prove their innocence.
This revelation is considered concerning and allowing the casino to reopen would be an unacceptable risk for the community, according to regulators. The findings of the investigation need to be released first so that the public as well as the regulators have confidence that Crown Resorts is operating a legal and safe gambling environment.
Along with this investigation, the company is facing other probes by regulators. It may be quite some time before the venue in Sydney is allowed to open, if at all, based on the findings of these investigations.