Posted on: July 5, 2022, 07:39h.
Last updated on: July 6, 2022, 08:29h.
Crown Resorts has already paid AU$80 million (US$57.5 million) for breaking the rules in Victoria but may have to pay more. The Victorian Gambling and Casino Control Commission (VGCCC) is launching a new probe that could cost the casino operator as much as AU$100 million (US$68.25 million).
Victoria conducted an inquiry into Crown’s Crown Melbourne casino, finding that it was irresponsible with a number of its business practices. As a result, Crown is now on a two-year probation in the state, during which it has to prove that it has matured and can play by the rules.
Now, according to local media, the VGCCC, which recently took over for the Victorian Commission for Gambling and Liquor Regulator, has launched new disciplinary action. This comes as a response to the operator’s failure to adhere to responsible gambling regulations.
Crown Still Unstable
With the initiation of the new proceedings, Crown faces the possibility of Victoria changing or censuring its casino license. This could also impact The Blackstone Group, which recently completed its acquisition of the company.
Fran Thorn, chair of the VGCCC, said that complying with responsible gambling obligations is the single most important requirement of the Crown. She added that the company did not effectively supervise or interact with “hundreds or possibly thousands of customers” who were notably at risk for problem gambling.
The VGCCC will therefore be unflinching in its resolve to deal with the issues uncovered at the royal commission regarding Crown’s approach to responsible gambling, and to ensure the casino operator acts in line with its legal obligations and the community’s expectations,” said VGCCC Chair Fran Thorn.
The revelations came to light during Victoria’s inquiry into the Crown’s activity. That royal commission uncovered a number of wrongdoings, for which the casino operator will pay a heavy price. It’s still on the hook for potentially millions in unpaid taxes in Victoria, not to mention those of other states.
In Victoria, as in New South Wales and Western Australia, responsible gambling policies are now at the forefront at Crown. The states where it has a presence are all working on remediation projects with the operator, dedicating resources specifically to the company to see if it can turn itself around.
Crown Loses Credit Rating
When Victoria announced its first eight-figure fine against Crown, Fitch Ratings said that it wouldn’t impact the company’s credit rating. However, it also said that the acquisition by Blackstone could have a negative impact.
Standard & Poor’s (S&P) has seconded that opinion. Yesterday, it lowered Crown’s credit rating from BBB/A-2 to BB-/B. This was a direct result of the acquisition, which “materially weakened Crown’s credit profile.”
After providing the update, S&P withdrew its rating completely. It explained that, as a private company, it won’t have access to key information. In addition, unknowns surrounding Blackstone’s “operating strategy and the final capital structure” produce too much uncertainty.