Unlike New Zealand online casinos, Aussie land based casinos have not fared so well in 2022. Australia’s powerful gambling entertainment companies, Star Entertainment, Crown Resorts, and SkyCity Entertainment Group, got into serious trouble with regulators this year. None of these companies succeeded in using their experiences and resources to avoid this crisis or respond rightly to it.
A series of government investigations, which began in 2021 and continued into 2022, revealed that Crown Resorts was unfit to hold a license to operate its casinos in Melbourne and Sydney. Another public inquiry of 2022 found Crown Resorts' Perth casino guilty of violating gambling regulations.
In May 2022, Crown paid a fine of $80 million for permitting its customers to transfer funds illegally. At the end of the year, the operator paid a record fine of $120 million for failure to comply with responsible gambling laws.
Crown Resorts could have foreseen the crisis. As Fran Thorn, the chair of the Victorian Gambling and Casino Control Commission said in November, the operator has been systematically and extensively violating anti-money laundering and responsible gambling regulations for the past 12 years.
Just recently, Star Entertainment, Crown's rival, was also the subject of several public inquiries, which revealed the company's failure to comply with regulations in its Brisbane and Sydney casinos. These investigations found the Star unfit to hold a casino license.
The company had to pay a fine of $100 million for its inability to stop money laundering activities in its Sydney casino. A couple of months later, Queensland imposed a fine of $100 million on Star's Brisbane casino and a 90-day suspension of its license, which it delayed for 12 months to enable the operator to clean up its operations.
This month, the Australian Securities and Investments Commission (ASIC) initiated civil proceedings against Star's former and current executive officers and board members for allegedly violating anti-money laundering rules.
In addition, AUSTRAC, Australia's financial regulator, prepared to drag Star Entertainment to court for breaking anti-money laundering laws. AUSTRAC has also sued Crown Perth and Crown Melbourne in the federal court.
In December, AUSTRAC took action against SkyCity after investigations revealed the company's failure to comply with Australia's anti-terrorism financing and anti-money laundering laws. SkyCity may have to pay a fine exceeding $2 billion.
AUSTRAC produced documents in court showing that a customer claiming to be a meat packer spent over $85 million at the casino over four years. Another customer, who informed the casino he was a chef, spent over $34 million in the same period.
Casinos have always been at risk of being centres for money laundering activities and organized crime. The results of all these investigations on casino operations are not surprising.
What is surprising is the failure of the operators to recognize crisis risks and make plans to deal with them.
In 2016, Deloitte collected the opinions of non-executive officers worldwide, and 73% of the officers say that reputation is a crisis vulnerability, but only 39% had plans to deal with the crisis.
In 2020, PR News and CS&A International conducted a research study showing that 40% of the companies studied had no crisis management plan, and half of those with such a plan admitted that it was not up to date.
In 2022, the Connected Crisis Study conducted by Edelman DXI across six international markets revealed that 60% of chief marketing and chief communication officers admit that their teams lack the skills to handle a crisis despite crisis management being their responsibility.
A SenateSHJ report of interviews with NZ and Aussie CEOs in 2022 reveals that only 31% of the interviewees were well-prepared for a crisis, 24% knew there was a risk but couldn't deal with it, and 38% did not foresee any crisis risk.
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