Royal Commission into the Casino Operator and Licence
- Recommendations
- 33
- Established
- Report length
- 652 pages
Official source
Summary
The report's own summary: Overview, pages 22 to 45
Generated summary: written by an AI model from the report text and checked against the cited pages.
Victoria’s Royal Commission into the Casino Operator and Licence examined whether Crown Melbourne was suitable to keep its casino licence and what action should follow.
The Commission found Crown Melbourne unsuitable and identified failures in legal compliance, corporate oversight and dealings with its regulator.
Report, page 23 · Report, page 24 · Report, page 25 · Report, page 26
It recommended a Special Manager oversee the business for two years, followed by a regulatory decision on whether suitability had been restored.
Its 33 numbered recommendations cover regulatory powers, casino governance, money laundering controls and gambling harm, including mandatory limits on gaming-machine play.
Report, page 27 · Report, page 36 · Report, page 38 · Report, page 40 · Report, page 44
In the body's own words
- Finding
When these facts came to light, it was inevitable that Crown Melbourne would be found unsuitable to hold its casino licence.
- Recommendation
It is recommended that the Casino Control Act be amended to prohibit a casino operator from dealing with junket tour operators.
Recommendations 33
A commission's findings and recommendations are not findings of criminal or civil liability.
Recommendation 1
It is recommended that section 122 of the Casino Control Act be amended to include a new sub-paragraph for procedures for the verification of the identity of all persons seeking to enter the Melbourne Casino. The system should include requirements for the retention of customer data.
Recommendation 2
It is recommended that a direction be given to Crown Melbourne pursuant to section 23(1) of the Casino Control Act to the effect that carded play be compulsory at the Melbourne Casino for all gaming.
Recommendation 3
It is recommended that a direction be given to Crown Melbourne pursuant to section 23(1) of the Casino Control Act to the effect that Crown Melbourne phase out the use of cash at the Melbourne Casino, save for gaming transactions of $1,000 or less.
Recommendation 4
It is recommended that a direction be given to Crown Melbourne pursuant to section 23(1) of the Casino Control Act to the effect that it enter into an information-sharing protocol with Victoria Police. The protocol must set out, to the satisfaction of Victoria Police, the information-sharing arrangements between Crown Melbourne and Victoria Police, which against the background of what Victoria Police needs, prescribes what information Crown Melbourne must provide, and the format and timeframes for the provision of that information.
Recommendation 5
It is recommended that the regulator, if it deems appropriate, give a direction to Crown Melbourne pursuant to section 23(1) of the Casino Control Act to the effect that Crown Melbourne enter into a similar arrangement with the Australian Criminal Intelligence Commission and the Australian Federal Police.
Recommendation 6
It is recommended that a direction be given to Crown Melbourne pursuant to section 23(1) of the Casino Control Act to the effect that on and from 30 June 2022, it must keep and maintain a single account as approved by the regulator at an authorised deposit-taking institution in the state for use for all banking transactions by patrons.
Recommendation 7
It is recommended a direction be given to Crown Melbourne pursuant to section 23(1) of the Casino Control Act to the effect that it retain all security and surveillance CCTV footage for a period of 12 months.
Recommendation 8
It is recommended that the Casino Control Act be amended to prohibit a casino operator from dealing with junket tour operators.
Recommendation 9
It is recommended that a direction be given to Crown Melbourne pursuant to section 23(1) of the Casino Control Act that the player card collect, to the extent practicable, data relating to: • player buy-in (time, amount) • player buy-out (time, amount) • play periods (date, start time, end time) • player turnover • player losses and wins • gambling product • such further information as the regulator reasonably requires for anti-money laundering and Responsible Service of Gaming purposes.
Recommendation 10
It is recommended that as soon as possible, the YourPlay system be a full, mandatory, binding, pre-commitment system for Australian residents gambling on EGMs at the Melbourne Casino. The pre-commitment system should operate in the following manner: • Each player must set a daily, weekly or monthly time limit and a daily, weekly or monthly loss limit. • If the pre-set time limit or the pre-set loss limit is reached, the player cannot continue to gamble on an EGM and the limit(s) cannot be altered, for 36 hours. • No player can gamble on an EGM for more than 12 hours in any 24-hour period. • If a player has gambled for 12 hours in any 24-hour period, the player must take a break for 24 hours. • A player cannot gamble continuously on an EGM for more than three hours. • A player must take a break of at least 15 minutes after three hours of continuous gambling. • A player cannot gamble on EGMs for more than 36 hours per week. • There should be a default pre-set loss limit that the player can modify. • The default pre-set loss limit should be set by regulation. It could be calculated by reference to the median income of a wage earner less the standard cost of living. Or it could be calculated by estimating the median losses of a recreational gambler. The pre-set loss limit should be reviewed at least annually. For the effective operation of a full, mandatory, binding YourPlay system, internal control systems are needed to ensure that a customer is unable to acquire more than one card. The systems need to be approved under section 122 of the Casino Control Act.
Recommendation 11
It is recommended that a new Ministerial Direction be made under section 10.6.6 of the Gambling Regulation Act, in respect of a casino operator, which includes the following requirements: • a duty to take all reasonable steps to prevent and minimise harm from gambling, including by monitoring the welfare of players, discouraging intensive and prolonged play and intervening when a person is displaying behaviour that is consistent with gambling harm • a duty to take all reasonable steps to ensure that players on the gambling floor are regularly observed to monitor behaviour that is consistent with gambling harm • a duty to ensure that there is a sufficient number of responsible gambling officers (however called) at the casino. It is recommended that the Ministerial Direction: • set maximum play period limits • prescribe how long a break in play should be • identify the period at which players should be interacted with, and the form of interaction, while gambling. Different rules will be needed for different gambling products. For EGMs, the periods of play should mirror those recommended for YourPlay. For other gambling products, the limits should not be less onerous than those approved by Crown Resorts in May 2021 for domestic customers.
Recommendation 12
It is recommended that to facilitate data collection for research purposes there should be established a Gambling Data Committee made up of three persons, one appointed by the regulator, one appointed by Crown Melbourne and one appointed by the Victorian Responsible Gambling Foundation. The committee should have the following functions: • to identify the data to be included in a repository • to ensure the data is up-to-date and comprehensive. The committee should be required to carry out the following tasks: • oversee the design and structure of the repository and its user interface • identify the data that is to be publicly available and data that will have restricted access • ensure processes and procedures are put in place for the efficient maintenance and updating of the repository • establish protocols to anonymise data to respect the privacy of gamblers • establish a register of recognised researchers • establish a simple process by which a request for data is to be made.
Recommendation 13
It is recommended that the committee have power to direct Crown Melbourne and the monitoring licensee for the YourPlay system to provide data that is reasonably required and in a particular format.
Recommendation 14
It is recommended that the cost of establishment and operation of the committee is paid for by the government, with staff and Secretariat support provided by the Victorian Responsible Gambling Foundation.
Recommendation 15
It is recommended that the following obligations under the Management Agreement be repealed: • the obligation on the State or the regulator to obtain the written consent of Crown Melbourne before action is taken to cancel or vary Crown Melbourne’s casino licence pursuant to section 20(1)(e) of the Casino Control Act • the obligation on the State to pay compensation pursuant to clauses 24A.3 or 24A.4 for action taken by the State or the regulator that is a Trigger Event, if a reason for the cancellation or variation or action (as the case may be) is the conduct of Crown Melbourne.
Recommendation 16
It is recommended that the Taxation Administration Act be amended to cover casino tax payable under the Management Agreement as well as any other taxes payable under the Casino Control Act.
Recommendation 17
It is recommended that the Casino Control Act be amended to add to inspectors’ functions the following: • to ascertain whether money laundering is taking place • to ascertain whether loansharking is taking place • to ascertain whether illicit drugs are being sold • to make an exclusion order when appropriate • on behalf of the casino operator, to withdraw a person’s licence to remain on the casino premises • any other functions as are prescribed by regulation.
Recommendation 18
It is recommended that the Casino Control Act be further amended so that: • inspectors have free and unfettered access to all parts of the casino, all the surveillance equipment used by the casino operator, and all the books and records of the casino wherever they be located • any interference with inspectors’ performance of their functions is to be a strict liability offence the contravention of which should carry a significant penalty.
Recommendation 19
It is recommended that the Casino Control Act be amended: • to oblige a casino operator to cooperate with the regulator in relation to the performance by the regulator of its functions. Cooperation requires the licensee to make full and frank disclosure of all information that relates to the performance by the regulator of a particular function • to oblige the casino operator to notify the regulator of a material breach, or a likely material breach, of the Casino Control Act, the Casino (Management Agreement) Act, the Gambling Regulation Act, its Responsible Gambling Code of Conduct and any agreements made pursuant to sections 15 and 142 of the Casino Control Act. A breach or likely breach will be material having regard to, among other things, the number and frequency of similar previous breaches or likely breaches, the impact of the breach or likely breach and any other matter prescribed by regulation • to prohibit the casino operator from making false or misleading statements or providing false or misleading material to the regulator • to make a contravention of those obligations a strict liability offence that carries a significant penalty.
Recommendation 20
It is recommended that the Casino Control Act be amended to permit the regulator: • to require any person attending for an examination under section 26(1)(c) to answer questions on oath or affirmation • in addition to the powers conferred by section 26, to require a casino operator or an associate to provide it with a written statement (verified on oath or affirmation) containing such information as the regulator reasonably requires to carry out its duties or perform its functions • to make a costs order in respect of any action under section 20 • to require the casino operator to retain at its own cost and pay for a suitably qualified expert: - approved by the regulator - engaged on terms approved by the regulator to inquire into and report to the regulator on any matter the regulator reasonably requires to carry out its duties or perform its functions • to direct the casino operator to provide the expert with all information the expert reasonably requires • to require the casino operator to comply with any recommendation made by the regulator as a result of an investigation under section 25.
Recommendation 21
It is recommended that the Casino Control Act be amended to the following effect: • The regulator has power by an instrument in writing to appoint a Special Manager to oversee the affairs of the casino operator: - if the regulator is directed to do so by the Minister; or - where it appears to the regulator that at least one of the following situations exist: ° there are reasonable grounds to suspect that the casino operator has contravened, in a material respect, a provision of its casino licence, the Casino Control Act, or any agreement entered into under sections 15 or 142 of the Casino Control Act ° the casino operator is or may no longer be a suitable person to hold a casino licence ° it is in the public interest because fraud, misfeasance or other misconduct by a person concerned with the affairs of the casino operator is alleged ° in any case it is in the public interest. • The Special Manager: - may be a body corporate or unincorporate - if a body corporate or unincorporate, the Special Manager must nominate one or more individuals to carry out any of its functions that can only be undertaken by a natural person. • The Special Manager must be qualified for appointment by virtue of their knowledge of, or experience in, industry, commerce, law or public administration. • The instrument appointing the Special Manager must specify: - the period of the appointment - the terms and conditions (if any) to which the appointment is subject - any particular functions the Special Manager is to perform - any other matter the regulator considers appropriate - if appointed at the direction of the Minister, any function specified in the Minister’s direction. • The functions of the Special Manager shall be to: - oversee the affairs of the casino operator including the casino operations - carry out investigations that are specified in the instrument of appointment - report to the regulator on any matter it has investigated - otherwise comply with any direction in the instrument of appointment. • The Special Manager or, if a body corporate or unincorporate, the nominated person(s), should have the following rights, privileges and powers: - the rights and privileges of a director of the casino operator, but not the right to vote - despite not having the right to vote, the power to: ° direct the board of directors of the casino operator to take particular action ° direct the board of directors of the casino operator to refrain from taking particular action if the Special Manager believes that the direction: ° is in the best interests of the casino operator or of the casino operations; or ° is necessary to secure compliance with any law or regulation governing the casino operator or the casino operations. • A failure to comply with a direction should be a strict liability offence carrying a significant penalty. • Without limiting its rights, privileges and powers, the Special Manager may: - investigate the affairs of the casino operator and the casino operations - attend meetings of the board of directors and any subcommittee of the board - attend meetings of the casino operator’s management, including meetings of any audit committee and compliance committee - inspect all the books and records of the casino operator - obtain the advice of, or services from, any third party including experts - require any director, officer, employee or agent of the casino operator to provide such information, including confidential or privileged information, as the Special Manager requires to carry out its duties. • A person who fails to comply with a requirement to provide information will be guilty of a strict liability offence with a significant penalty. The court may direct the person to comply with the requirement. • The Special Manager may carry out its functions, and any director or officer of the casino operator acting under the direction of the Special Manager must observe that direction, despite: - the Corporations Act, except to the extent of any inconsistency - the casino operator’s constitution. • The Special Manager may if special circumstances arise, and if so directed by the regulator must, make interim reports to the regulator and on the termination of its appointment shall report its opinion on, or in relation to: - the conduct of the casino operator and casino operations - the particular affairs of the casino operator or casino operations that the instrument of appointment requires the Special Manager to investigate. • A report may contain confidential or privileged information. • A copy of any interim report and the final report must be forwarded to the Minister. • Neither the Minister nor the regulator is to provide a copy of a report to any person unless it is in the public interest to do so. If the report contains information the subject of legal professional privilege, the privilege does not cease. • The regulator must consider any interim report or the final report and decide what action, including disciplinary action, it should take. • The costs and expenses of the Special Manager and any costs incurred by the regulator in connection with the Special Manager process must be paid by the casino operator. • The Special Manager is to be given an indemnity by the State for properly incurred debts. • If a Special Manager is appointed to Crown Melbourne: - The regulator must within 90 days of receiving the Special Manager’s final report decide whether it is clearly satisfied that: ° Crown Melbourne has become a suitable person to continue to hold its casino licence; and ° it is in the public interest that Crown Melbourne’s casino licence should continue in force. - The regulator must engage a senior counsel to assist in its deliberations. - For the purposes of its decision, the regulator must only have regard to: ° the Bergin Report (and documents/evidence tendered) ° the Report of this Royal Commission (and documents/ evidence tendered) ° the Reports of the Perth Royal Commission (and documents/evidence tendered) ° the report(s) of the Special Manager. - If the regulator is not clearly satisfied that: ° Crown Melbourne has become a suitable person to continue to hold its casino licence; and ° it is in the public interest that Crown Melbourne’s casino licence should continue in force, the casino licence granted to Crown Melbourne on 19 November 1993 under Part 2 of the Casino Control Act should forthwith be cancelled. - If the regulator has not made a decision within 90 days of receiving the Special Manager’s final report, the casino licence should be cancelled forthwith.
Recommendation 22
It is recommended that the Minister direct the regulator to appoint the Special Manager to Crown Melbourne for a period of two years. The direction should specify the matters the Special Manager is required to investigate and report on. Those matters could include the following: • details of each direction the Special Manager has given to members of the board • whether the direction was complied with • whether the casino operator has put in place appropriate policies, processes and structures to meet its obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act • whether those Anti-Money Laundering/Counter-Terrorism Financing policies, processes and structures are being implemented • whether the casino operator has put in place appropriate risk management policies, processes and structures • whether those risk management policies, processes and structures are being implemented • whether the casino operator has revised its Responsible Service of Gambling practices to take account of the concerns highlighted in this Commission’s Report • whether the casino operator has adopted policies, processes and structures that will enable it to comply with its Responsible Gambling Code of Conduct in force • whether the casino operator is complying with its Responsible Gambling Code of Conduct • whether the casino operator is conducting its casino operations in a manner that has regard to the best operating practices in casinos of a similar size and nature to the Melbourne Casino • whether the casino operator has conducted a ‘root cause’ analysis into the failures outlined in the Bergin Report and in the Report of this Commission, and what the findings were • whether there is any evidence of maladministration • whether there is any evidence of illegal or improper conduct • whether the casino operator has engaged in any conduct that may give rise to a material contravention of any law • the conduct of the casino operations generally. Further details of the matters the Special Manager could investigate are set out in Appendix I.
Recommendation 23
It is recommended that, if, following the receipt of the Special Manager’s report, the regulator does not cancel Crown Melbourne’s casino licence, the Casino Control Act be amended so that the next investigation due to be undertaken pursuant to section 25 of the Casino Control Act is deferred for at least three years.
Recommendation 24
It is recommended that the Casino Control Act be amended to include the following provisions relating to the manager: • Upon appointment the manager: - has control of the casino operator’s casino operations and all the property used in those operations - may carry on those operations and manage that property - may dispose of any of the property used in the casino operations and pay the net proceeds of sale to the persons entitled to the proceeds - may perform any function and exercise any power that the casino operator or any of its officers could have exercised in relation to the casino operations - when performing a function or exercising a power as manager of the casino operator, is taken to be acting as the casino operator’s agent. • The regulator is to determine the rate of compensation payable to the manager by the former casino operator and to approve the costs and expenses incurred by the manager. • During the period of management, the former casino operator must: - use its best endeavours to facilitate the operation of the casino within the casino complex - afford the manager all appropriate rights, including rights of access and egress over the casino complex, as are necessary to enable the manager to operate a casino in the casino complex. • The manager is to be given an indemnity by the State for properly incurred debts.
Recommendation 25
It is recommended that the Casino Control Act be amended so that a third party cannot, without the regulator’s permission: • enforce any security interest (as defined in the Corporations Act) over property that the manager retains for use in the casino’s operations • take possession of any property retained by the manager for use in the casino’s operations • levy execution on any judgment obtained against the former casino operator.
Recommendation 26
It is recommended that steps be taken to ensure that the area in which the Melbourne Casino’s casino operations are being conducted and the area that is to be the subject of a sub-lease under the Management Agreement are the same. If the matter cannot be agreed then legislation will be necessary.
Recommendation 27
It is recommended that there be a thorough review of all the penalties imposed by the Casino Control Act. Most should be substantially increased. Special attention should be given to the penalty to be imposed for disciplinary action. Currently the penalty is a fine not exceeding $1 million. It is recommended that the penalty be increased to at least $10 million.
Recommendation 28
It is recommended that the Casino Control Act be amended as follows: • No person shall have or acquire a relevant interest in 5 per cent or more of the issued capital in a casino operator or 5 per cent or more of the issued capital in the holding company or intermediate holding company of which the casino operator is a subsidiary, without the regulator’s approval. • If a person does hold or acquire a relevant interest in 5 per cent or more of the issued capital of a casino operator, or 5 per cent or more of the issued capital in the holding company or intermediate holding company of a casino operator without the regulator’s approval, that holding or acquisition should be deemed to be a breach by the casino operator of its casino licence. • ‘Relevant interest’ should have the same meaning as in sections 608 and 609 of the Corporations Act. • If the regulator requests the casino operator, its holding company or any intermediate holding company of a casino operator to take steps to discover who holds a relevant interest in the casino operator, or its holding company or any intermediate holding company and they fail to do so, that failure should be deemed to be a breach of the casino licence. • The restriction on shareholding should not apply to any existing shareholding in Crown Resorts (at the current holding) and Crown Melbourne, other than CPH’s shareholding in Crown Resorts. It should apply to CPH with effect from September 2024. • If a person contravenes the 5 per cent rule, the regulator may serve that person with a notice requiring the person to dispose of the relevant interest within a specified time. • A failure to comply with the notice should be an offence with a significant penalty. In addition, the Supreme Court should have power to make any order it considers appropriate to secure compliance with the regulator’s notice, including an order directing the person to dispose of any relevant interest.
Recommendation 29
It is recommended that the Casino Control Act be amended to impose an obligation that a casino operator must have a majority of its board as independent directors, including independent of any ultimate or intermediate holding company.
Recommendation 30
For the avoidance of any doubt about the construction of the Casino Agreement, it is recommended that the Casino Control Act be amended so that: • the board of a casino operator is not permitted to delegate any of its functions to any person or body of persons other than a subcommittee of the board or an individual director • the casino operator must appoint a full-time: - chief executive officer (however described) - chief financial officer (however described) - chief operating officer (however described) - heads of Gaming, Surveillance, International and Domestic VIP Business and Compliance (however described) and ensure that those persons do not report to, or take instructions from, any person or group of persons other than the board of the casino operator or an officer of the casino operator • the Minister has power to vary these requirements. The amending legislation should make clear that it does not diminish any of the other obligations imposed by clauses 22 and 28 of the Casino Agreement.
Recommendation 31
It is recommended that legislation be enacted to the effect that: • no action claim or demand whatsoever may be made or allowed against the State of Victoria or any responsible Minister of the State in respect of any damage, loss or injury alleged to have been sustained as a result of the implementation of any recommendation made in this Report • no decision made to implement any recommendation in this Report may be subject to any appeal or any order in the nature of certiorari, prohibition or mandamus or the grant of any declaration or injunction.
Recommendation 32
It is recommended that the Casino Control Act be amended so that ‘associate’ means: • the holding company and each intermediate holding company of the casino operator (holding company to be defined as in the Corporations Act); • any person who has a relevant interest (as defined in the Corporations Act) in at least 5 per cent of the issued capital of the casino operator, or any of its intermediate holding companies or its ultimate holding company; • any director or officer (as defined in the Corporations Act) of the casino operator, any of its intermediate holding companies or its ultimate holding company; and • any individual or company certified by the regulator to be an associate.
Recommendation 33
It is recommended that an associate cannot increase its relevant interest in the issued capital of the casino operator, or any of its intermediate holding companies or its ultimate holding company, without the written approval of the regulator.
About the inquiry
- Established
- In accordance with the Letters Patent dated 22 February 2021 Report, page 6
- Commissioner
- Yours sincerely The Honourable Ray Finkelstein, AO, QC Commissioner Report, page 6
- Final report
Official documents 3
Royal Commission into the Casino Operator and Licence
Document details
- Recommendations
- 33
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- Extracted
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Government response to the Royal Commission into the Casino Operator and Licence Report
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Victorian Government response to the Royal Commission into the Casino Operator and Licence Report
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Notes on this record
- The report lists its recommendations by topic rather than in number order; OPAX keeps the report's numbers.