After much deliberation during the 4th week of February, the West Australian regulator (aka WA authority) found the evidence sufficient enough to completely ban Crown Perth from holding Junkets within its jurisdiction.
A junket is a VIP travel program organized by a specific casino venue to get high rollers (whales) through their gates. Crown’s bread and butter was to attract these types of clients from overseas, especially from South-East Asia and China.
The decision was reached after reviewing the New South Wales probe that the Australian authorities conducted on Crown, due to allegations of money laundering. The evidence they found there of higher-ups ignoring such things occurring during their regular junkets was sufficient enough to give any such activities the chop.
Ends justifying the means?
The Victorian government is currently discussing whether or not Crown should be completely stripped of its gaming license within their territory. But it’s not an easy decision to make. Most of it is due to Crown being the biggest employer in the region.
A loss of gaming license would mean not only thousands of Australians losing their jobs in an already fragile economic situation in the country but also a major cut-off of tax revenue for Victoria itself.
It’s not over for Crown yet
Purely based on the current political and economic situation, it is highly unlikely for Victoria to vote to revoke the Crown’s license. They simply cannot afford it at the moment. What they can afford is limiting the venue’s income significantly while upholding local law.
It’s not fully clear whether it will be specific nationalities of VIPs that won’t be able to use Crown’s Junkets anymore or if it’s a restriction regardless of nationality. News.com.au reports that this restriction is targeted to certain overseas travelers, which could mean Chinese or South-East Asian clients. This is mostly deduced from the fact that most high rollers (whales) come from these particular countries.
It can be assumed that Crown can still hold Junkets, but they will need to tone it down a bit.
The bottom line
Regardless of what decision the Victorian government or the WA Authority make, Crown’s stock, as well as its revenue for the foreseeable future, is going to take a massive hit. Even though the Victorian government is concerned about jobs being lost in the case of the Crown losing its license, there will still be some career casualties from the restrictions being placed.
As a corporation, Crown will look into cutting costs to retain the current budget plan, and just like any other corporation does, lay-offs will be the first strategy.
Image courtesy of ABC News (Australia)/YouTube Screenshot