Crown facing Victoria disciplinary proceedings for Union Pay scheme

The Victorian gambling regulator has commenced disciplinary proceedings against Crown Resorts’ Melbourne facility regarding the illegal transfer of funds from China.

Dubbed the ‘China Union Pay process,’ this comes in relation to the findings of the state’s royal commission into the casino and entertainment operator, which found that the group had devised the ploy in a bid to evade Chinese currency restrictions.

The royal commission report described the process as “the use of the Chinese-based bank card, China Union Pay, to allow international patrons to access funds in order to gamble at Crown Melbourne,” which occurred between 2012 and 2016.

This, it is added, was devised due to restrictions imposed on Chinese nationals transferring money out of the country, with the process initially seeing the issuance of a room charge bill to patrons that falsely asserted that the hotel had provided services.

“The patron would pay the bill [using their China Union Pay card] and be given a voucher acknowledging receipt of funds,” the Victorian Gambling and Casino Control Commission confirmed.

“Then the patron, accompanied by a Crown VIP host, took the voucher to the cage and exchanged it for cash or chips.”

Actions available to the VGCC, which adds that it will make a further announcement once in has considered Crown’s response, include imposing a fine of up at A$100m, varying its casino licence, and/or censuring the company and directing it to take rectification steps.

Fran Thorn, VGCCC Chair, explained: “I welcome the legislative amendments which impose stronger regulatory obligations on Crown and provide the VGCCC with greater enforcement powers. These powers are 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.”

In a statement, Crown says that it will “fully cooperate” with the VGCC “on this and any other matters arising from the Victorian royal commission report”.

During 2021, a royal commission was conducted into the company which found that Crown Melbourne is unsuitable to hold its casino licence and contravened several of its obligations.

However, the group retained its Melbourne casino licence, despite the royal commission deeming Crown “unsuitable” on the basis that it engaged in “illegal, dishonest, unethical and exploitative” conduct.

In response, 33 recommendations were issued, including a special manager being appointed to oversee the company’s reform agenda, before suitability will again be assessed after a two-year period.

This followed a ruling along the same lines being made in New South Wales, with a Western Australian royal commission also recently reporting similar findings.