27 Apr

VCGLR Show Cause Notice - Update

Crown Resorts Limited ABN 39 125 709 953 Level 3, Crown Towers, 8 Whiteman Street, Southbank VIC 3006 ASX/MEDIA RELEASE FOR IMMEDIATE RELEASE 27 April 2021 VCGLR SHOW CAUSE NOTICE – UPDATE MELBOURNE: Crown Resorts Limited (ASX: CWN) (Crown) refers to its announcement of 12 October 2020 regarding a Show Cause Notice received by Crown Melbourne Limited (Crown Melbourne) from the Victorian Commission for Gambling and Liquor Regulation (VCGLR) relating to alleged historical non- compliance by Crown Melbourne with its Internal Control Statement for junket operations (ICS). The VCGLR has today issued a letter of censure and imposed a fine of $1 million on Crown Melbourne in relation to this Show Cause Notice. A copy of the media release issued by the VCGLR today is attached. Helen Coonan, Crown’s Executive Chairman, said: “Crown continues to engage with the VCGLR and the Victorian Government in relation to its reform agenda. These reforms and changes to our business are aimed at delivering the highest standards of governance and compliance as we restore public and regulatory confidence in our operations. “As part of this reform agenda, Crown has already ceased dealing with all junket operators.” ENDS This announcement was authorised for release by the Disclosure Committee. Investor and Analyst Enquiries – Matthew Young, Investor Relations, 03 9292 8848. Media Enquiries – Natasha Stipanov, Corporate Affairs, 03 9292 8671. COPIES OF RELEASES Copies of previous media and ASX announcements issued by Crown are available at Crown's website at www.crownresorts.com.au Level 3, 12 Shelley Street, Richmond 3121 GPO Box 1988, Melbourne VIC 3001 1300 182 457 vcglr.vic.gov.au Media release Date: 27 April 2021 Crown issued $1 million fine for junket conduct The Victorian Commission for Gambling and Liquor Regulation has fined Crown Melbourne Ltd ( Crown ) the maximum fine of $1 million for failing to comply with regulatory requirements in relation to junket operations. This follows disciplinary action taken by the Commission under section 20 of the Casino Control Act 1991 . Commission’s findings Havi ng carefully considered all relevant materials and information, including submissions by Crown, the Commission has determined that Crown failed to comply with its regulatory obligations during relevant periods, namely, obligations that required Crown to im plement a robust process to consider the ongoing probity of junket entities. The Commission assessed Crown’s engagement with certain individuals who were junket operators, junket agents and/or junket players at the Melbourne casino. The Commission also car efully considered submissions Crown made about its overall processes in assessing the probity of junket entities. The Commission concluded that in respect of the analysed individuals, the processes implemented by Crown were not robust, as required by inte rnal control statements that had previously been approved by the Commission. Crown also failed: • to gather necessary information to enable it to make an informed decision concerning the probity of relevant junket entities and did not check and verify relevant information directly with the junket entities; • to ensure that decisions relating to probity assessments were made by decision - makers who understood or were in a position to prioritise Crown’s regulatory obligations; and • to maintain appropriate and contemporaneous records relating to junket probity decisions. This failure meant that it was unclea r how certain decisions were reached by Crown and whether such decisions were made with due regard to Crown’s regulatory obligations. Disciplinary action taken As a result, the Commission has determined: • to impose a fine of $1 million (the maximum fi ne available pursuant to section 20 of the Casino Control Act 1991 ); and • to issue a letter of censure to Crown, which: o prohibits Crown from recommencing junket operations at the Melbourne casino until it has satisfied the Commission that its processes and procedures have been improved to the satisfaction of the Commission; and 2 o requires Crown to report regularly to the Com mission on the progress of a reform agenda Crown outlined to the Commission as part of its submissions in this matter. VCGLR Chairman Ross Kennedy said that whilst this is not the first time that the Commission has taken disciplinary action against Crown , it is the first time that Crown has been fined the maximum fine available to the Commission under the Casino Control Act 1991. “That fine reflects the seriousness of this matter, and the fact that Crown’s failure to implement a robust process occurred over an extended period. “Robust processes must be implemented to ensure that Crown’s Melbourne casino remains free from criminal influence and exploitation. These are strict and legislated regulatory requirements, and this is an area where Crown has rep eatedly failed,” said Mr Kennedy. The Commission recognises that this matter may be relevant to the Royal Commission into the Casino Operator and Licence and the Commission will continue to assist that Royal Commission with its inquiries. The Commission also notes that whilst it has provided Crown with detailed reasons for its decision, Crown has asserted that this matter has required consideration of protected information and “could provide those wishing to exploit the [Melbourne] casino’s operations with valuable information in relation to how [Crown’s] controls and procedures operate, particularly those procedures and controls designed to identify, mitigate and manage money laundering risks.” Crown has in those circumstances asked that th e information and documents that it has provided to the Commission during this matter “be regarded with due sensitivity and confidentiality…” Accordingly, the Commission has decided not to publish its detailed reasons for these decisions , and therefore w ill not be commenting on this matter further at this time. Media contact: Email: Nicole.saleh@vcglr.vic.gov.au Phone (03) 9098 5306 or 0427 701 037 vcglrmedia@vcglr.vic.gov.au
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