Crown Resorts Faces Regulatory Action Over Chinese Fund Transfers

   By Mike Cherney

SYDNEY--The casino regulator in Australia's Victoria state said it has commenced disciplinary action against Crown Resorts Ltd.'s Melbourne casino for enabling the illegal transfer of funds from China.

The Victorian Gambling and Casino Control Commission said it could impose a fine of up to 100 million Australian dollars (US$75.4 million), vary the casino license or censure Crown and direct it to rectify the matter.

The regulator said Crown used a China-based bank card, China Union Pay, to allow international patrons to access funds to gamble at the casino. It said Crown would issue a room charge to a person, falsely asserting the hotel provided services, allow the person to pay the bill, and then give the person a voucher that could be exchanged for cash or chips.

The scheme, which allowed Crown customers to evade Chinese restrictions on transferring money out of the country, came to light as part of a royal commission set up by state authorities. The commission found that Crown is unsuitable to hold a casino license but stopped short of recommending shutting down the casino. Instead, the Victorian state government appointed a special manager to supervise casino operations for two years while Crown attempts to reform.

The maximum fine the regulator can impose on Crown was increased to A$100 million from A$1 million following the royal commission findings. The regulator said further disciplinary actions are expected to arise from other matters highlighted by the royal commission.

Crown had in February agreed to a takeover proposal from U.S. investment firm Blackstone Inc., which at the time valued Crown's equity at A$8.9 billion.

Write to Mike Cherney at mike.cherney@wsj.com

(END) Dow Jones Newswires

April 05, 2022 06:05 ET (10:05 GMT)

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