It’s now becoming a ritual: a special inquiry or royal commission uncovers flagrant law-breaking by casino operators, facilitation of money laundering, a lax attitude to problem gambling, links to organised crime, and “regulators” so emasculated and captured that they pose zero threat to the well-connected, politically influential corporation that owns the casino. But the casino is allowed to continue operating, as long as it commits to makes significant changes and improve its practices. The possibility that a casino might actually be shut is never seriously contemplated.
The Bergin review in NSW set the standard: it found, after an extraordinary series of revelations about misconduct and poor corporate governance, that Crown was not a suitable licensee in that state, but given Crown hadn’t opened its Sydney facility — the result of an unsolicited bid to build it from James Packer to the NSW government — the report made recommendations to “render the Licensee and Crown suitable persons”.
Crown now has the blessing of the NSW “regulator” to open within weeks.
The Finkelstein royal commission, which Crown supporter Daniel Andrews was forced into calling in Victoria, found even worse — “misconduct wherever I look” in Crown, Finkelstein concluded, offering adjectives like “illegal, dishonest, unethical and exploitative”. But, again, Crown wasn’t shut — it was given two years to undertake reforms under a new board, while a “special manager” ran it.
Now it’s the turn of a royal commission in Western Australia into Crown’s Perth casino, headed by Neville Owen, Lindy Jenkins and Colin Murphy. They found money laundering, links to organised crime, indifference to problem gambling and massive problems with WA’s purported casino regulator, which was deeply conflicted. Yet again, Crown was found “not a suitable person” to run a casino or hold a licence.
But, you guessed it, Crown will get to continue to operate in Perth on a “pathway to suitability” determined by the commission. That’s three for three.
At $12.50, Crown’s share price is back to where it has been for most of the last seven years, ahead of Blackstone’s acquisition of the company.
An inquiry into Sydney’s Star casino recently commenced, and has already revealed money laundering and links to organised crime. Don’t expect Star to lose its licence though: like Crown, there’ll be board and management turnover, but the casino itself will continue, on the basis that it has been reformed.
Crown’s close financial links with political parties in Victoria and WA are well-known (at least to Crikey readers). Crown has gifted around $1.2 million in contributions to the Victorian Liberal and Labor parties and the WA Liberal, Labor and National parties since 2010. It has employed well-connected former politicians and staffers from both sides.
Star is no slouch on donations, handing $220,000 in donations to federal Labor since 2015, and $270,000 to the NSW Liberal Party.
Like Crown, Star will undergo the ritual of the re-regulatory moment. That’s the pattern, first created by Australia’s biggest banks, where large corporations exploit their political influence and size to break free of proper regulation, then engage in such egregious misconduct that governments are shamed into calling some extraordinary form of inquiry — usually a royal commission — to investigate them.
That process leads to shame, board and management departures, promises of strong regulation and overhauls of regulators and… the companies emerge stronger than ever, with governments eventually finding pretexts to drop many of the promises of tougher regulation made during the political heat of the inquiry.
Like the big banks, Crown and Star are, in effect, too big to be allowed to fail, no matter how appalling their misconduct is. They generate too much revenue for governments and provide too much in donations to be shut. And they engage in the many of the classic behaviours of state capture — donations, lobbying, revolving doors, repurposing of regulatory bodies, public influence campaigns. And that has paid off in their continuing existence despite flagrant breaches of major criminal laws.
Shareholders can be confident that, while management and even boards may come and go, their access to lucrative streams of revenue will never be seriously endangered — and the companies they own can do whatever they like to maximise that.
Casinos provide an essential service to world governments and business by providing convenient and private money-laundering facilities. How else can vast sums of money be secretly transferred between say the drug trade, the slave trade, , the arms trade, spy agencies, bribes to governments, officials and politicians, et al.
In Australia, the State governments appoint Gaming ministers to ensure that surveillance and oversight is left to the operators and that police and other crime prevention activities (say policing) are excluded.
The national government provides expedited visas for casino clients or their agents via the Minister for Home Affairs and security and/or protection can be afforded by the Federal police.
The only downsides are the few gambling addicts who often cause more trouble than they are worth and patrons risking adverse health effects from entering venues that are severely contaminated with bacterial, fungal and viral diseases (sick building syndrome – where adequate cleaning and ventilation is not possible).
exactly right, i’m not sure what the problem is? it was always my impression that the whole point of legalised casinos in Australia so the taxpayers (ie the Government) could get a cut of all the dirty money being laundered through the gambling industry? Not sure why we are spending millions on lawyers talking BS to each other for months to discover the system is working exactly as intended.
Rotten to the core a total criminal business plan.When Andrew Wilkie the ex Australian intelligence service officer now Tassie member in the house of reps called for an inquiry into Crown both the major parties refused to support his bill.
The investigative reporting by Nic McKenzie blew the lid on the whole racket Very interesting fact that the main organizer of the Chinese junkets that were enormous profit makers for Crown was wanted on the Interpol” Red Warning” list to be arrested at any border not only entered Australia but was granted citizenship . A former resident of Wuhan he was arrested in Fiji and deported back to China .
Plenty of work for an ICAC here
All quite accurate, except when you ask ‘how else’ with the implication this is the only way it can be done. The UK government in particular has spent decades building a financial framework that provides every possible facility for dirty money, including a range of different legal entities – registered partnerships, companies and so on, each with different duties regarding accounting and so on – which can be tailored and arranged in impenetrable layers of multiple shells in a choice of jurisdictions including the highly secretive offshore tax havens that the UK government encourages. The few rules about registering ownership and other pertinent details are not scrutinised or enforced because the UK has wisely reduced the staff levels of the tax authorities and Companies House to the point where no investigative or compliance work is possible. Don’t want to dig up anything embarrassing or frighten the horses, do we? (And yet somehow they still find resources for harassing and brutally crushing the relatively minor transgressions of little people.) The smooth running of the system is assured by the clever practice of seconding senior personnel from the big four accountancy companies, who do such great work devising tax-dodging schemes for the mega-wealthy, and placing these highly motivated and knowledgable experts at the top of the UK’s tax authorities to develop
loopholestax policy.It has been standard practice for decades to bring dirty money to the UK through a maze of companies whose sole purpose is concealment from laws and taxes, and process it through transactions such as buying real estate in London, AKA Londongrad, until it is clean again. The amazing price of London housing bears witness to the success of this trade, as do the plethora of fat-cat London lawyers, bankers, accountants and real estate dealers who have grown exceedingly wealthy on it.
Private Eye magazine has been documenting this for a long time. It might be tiresome to track down print copies and wade through several years’ worth to find the relevant articles, but Page 94: The Private Eye Podcast discusses these matters in episodes 8, 10, 16, 31 and, particularly recommended, 38.
Wow. My earlier post, see above, was sent to purgatory by the modbot for three days.
Can anyone discern how it offended?
Beats me.
Thanks for the heads up re the Eye doing podcasts.
It’s the first thing I buy whenever I land at Heathrow but, thanks to covid, haven’t seen it for 3+yrs.
I’ve just d/l the lot so that I’ll have something to do when/if Scummo finally calls an election.
Or declares Martial law.
Maybe Australians are more closer to living under a Communist style regime, than we think? Sadly there are some striking similarities, how the governmental systems work!
Burn all the casino’s to the ground. And toss in all the pub and club pokie machines before the embers die down.
Co-signed, Robert Reynolds Munkey!! I agree with your sentiments 110%!!>
I have now opened the comments section on this article four times. But really I still do not know what to write.
… a special inquiry or royal commission uncovers flagrant law-breaking by casino operators, facilitation of money laundering, a lax attitude to problem gambling, links to organised crime, and “regulators” so emasculated and captured that they pose zero threat to the well-connected, politically influential corporation that owns the casino.
Three state commissions have declared Crown as being unfit to hold a casino licence and Crown continues to hold a licence because it is too big to fail. A current NSW inquiry into Star is likely to make similar findings with zero consequences predicted to follow.
It almost beggars belief; it is certainly beyond my capacity to make some kind of useful comment.
We need radical changes of government and the immediate cessation of donations to political parties. That’s the only possible path to change that I can see.
I agree, but there’s an obvious reason why neither party will ever close them down.
Any company that wants a gambling license is ipso facto not right and proper to hold one.
Any government relying on income from gambling to the extend Australian governments do without any consideration of the devastating effects gambling has on community is not right and proper.
You only have to try and watch a TV program ( Including news) which is now sandwiched between an insane amount of gambling adverts. The quicker these adverts are banned before 8.30 pm the better our society will be.
It was once the norm in the more civilised northern euroland countries that all TV ads had to be between one prog and the next, never interspersed inbetween.
It even applied to films in some.
The effect on water pressure & electricity demand can be imagined.
Wen SBS first began accepting them – ‘only class ads‘ was the solemn promise – that was the model, for about 6months IIRC.
BTW, what’s the deal with those 2-3 second ads on one of the ‘steeming’ services?
A totally new thing to me.
If they work be scared, very scared.
I think Bernard, that you are getting to the crux of the issue when you say,
“Like the big banks, Crown and Star are, in effect, too big to be allowed to fail, no matter how appalling their misconduct is.”
Clearly, we could also include in that sentence real-estate developers, the alcohol and gambling industries, the tobacco industry (just to name a few others).
The blatant examples of corporate malfeasance that you so eloquently describe in your article Bernard are precisely what you must expect in capitalist society (especially one with a neo-liberal flavor). The ‘regulators’ are there purely for show only. Quite frankly, I do not know why they are there at all, apart from being a sop to those who oppose the capitalist ‘free-for-all”. The government can say, “Oh, but the regulator will ensure that there is no impropriety (in this or that industry)”. All the while of course, the government (Liberal or Labor) really takes the attitude, “leave it up to the market to sort things out, it is not the role of governments to interfere with the market mechanism. People should be free to choose what they want to do”. Of course, any half-wit can see through this as a monumental lie and confidence trick, (in fact, it is so obvious, that even I can see through it!!)
I tell you Bernard, that if we are serious about changing the way casinos, banks and other giant corporations behave we need to see major structural reform in our society. Tinkering around the edges will achieve no permanent or meaningful change.