Fifth Review of the Casino Operator and Licence Fifth June 2013
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FIFTH REVIEW OF THE June 2013 Casino Operator and Licence Fifth of the Review Casino Operator and Licence June 2013 49 Elizabeth Street, Richmond 3121 GPO Box 1988, Melbourne 3001 1300 182 457 [email protected] vcglr.vic.gov.au Letter to the Minister Mr Edward O’Donohue MLC Minister for Liquor and Gaming Regulation Level 26, 121 Exhibition Street MELBOURNE VIC 3000 Dear Minister We are pleased to submit the report of the Fifth Review of the Casino Operator and Licence, conducted in accordance with section 25 of the Casino Control Act 1991 (Vic). Yours sincerely Bruce Thompson Robert Kerr Acting Chairman Commissioner Contents Glossary 5 Executive Summary 9 Summary of Opinions and Recommendations 17 Part 1 – Introduction 21 1.1 Scope and conduct of investigations ...............................................................................................21 1.2 Regulatory and commercial history .................................................................................................30 Part 2 – Suitability 43 2.1 What is suitability? ........................................................................................................................43 2.2 Corporate structure .......................................................................................................................45 2.3 Probity .........................................................................................................................................49 2.4 Management ability ......................................................................................................................54 2.5 Financial stability...........................................................................................................................69 2.6 VCGLR opinion and recommendations – Suitability ..........................................................................72 Part 3 – Compliance with Obligations 75 3.1 How has Crown Melbourne Limited complied with relevant legislation and agreements? .....................75 3.2 Regulation of the Melbourne Casino ...............................................................................................77 3.3 General compliance with legislative obligations and regulations .......................................................80 3.4 Responsible gambling ...................................................................................................................81 3.5 Exclusion orders ..........................................................................................................................102 3.6 Other regulators of the Melbourne Casino ....................................................................................116 3.7 Law enforcement agencies and the prevention of criminal activity at the Melbourne Casino ...............118 3.8 Responsible service of alcohol ......................................................................................................123 3.9 General compliance with licence and agreements .........................................................................128 3.10 Conditions relating to company structure ....................................................................................132 3.11 VCGLR opinion and recommendations – Compliance with Obligations .........................................138 Part 4 – Melbourne Casino Operations 141 4.1 Is it in the public interest that the casino licence continues in force? .................................................141 4.2 Conduct of gaming and betting ...................................................................................................142 4.3 Management and supervision of gaming and betting .....................................................................143 4.4 Security and surveillance ..............................................................................................................147 4.5 VCGLR opinion and recommendations – Melbourne Casino Operations .........................................150 VCGLR Opinion 153 Appendices 155 1. List of charts, figures and tables ......................................................................................................155 2. Letter from Crown Melbourne Limited .............................................................................................158 3. Final report of the probity advisor to the Fifth Casino Review .............................................................166 4. Transaction Documents .................................................................................................................169 5. Associates of Crown Melbourne Limited ..........................................................................................170 6. Matters resolved since the Fourth Casino Review ..............................................................................172 7. ASX Corporate Governance Council Principles and Recommendations ..............................................174 8. List of stakeholder consultations .....................................................................................................174 9. Selected bibliography ....................................................................................................................178 4 Fifth Review of the Casino Operator and Licence Glossary 5 Glossary AML/CTF Act is the Anti-Money Laundering and Commission based play arrangement means a Counter Terrorism Financing Act 2006 (Cth). premium play arrangement or a junket. ASIC is the Australian Securities and Commission based player means a person Investments Commission. who participates in a commission based play arrangement with a casino. See also VIP player. Aspers means Aspers Holdings (Jersey) Limited which operates three regional casinos in the Consolidated Press Holdings Limited (ACN United Kingdom and is 50 per cent owned by 008 394 509) is the largest shareholder of Crown Limited. Crown Limited, holding 50.01 per cent of Crown Limited’s fully paid ordinary shares as at 20 Aspinall’s Club is a small London casino wholly December 2012. owned by Crown Limited. It is one of five licensed casinos in London’s West End. Corporations Act means the Corporations Act 2001 (Cth). Associate is an individual or company identified as an ‘associate’ within the meaning of section Crown Entertainment Group Holdings Pty Ltd 4 of the Casino Control Act, required to be (ACN 126 028 822) is a non-trading company approved or investigated by the VCGLR under which holds 100 per cent of the shares in Crown section 28 of the Casino Control Act. Melbourne Limited. It is a wholly owned subsidiary of Crown Limited. ASX is the Australian Stock Exchange. Crown Group means, for the purposes of this AUSTRAC is the Australian Transaction Reports report, all of the Australian and overseas entities and Analysis Centre. wholly or partly owned by Crown Limited, and Business associate means a person, body or includes Melco Crown. association that has a business association (an Crown Limited (ACN 125 709 953) is the intended commercial link) to the casino operator ultimate holding company of Crown Melbourne or its Associates. Limited. Crown Limited also owns and operates Casino Agreement means the consolidated Crown Perth and Aspinall’s Club. Casino Agreement between the VCGA (now Crown Melbourne Limited (ACN 006 973 VCGLR) and Crown Casino Limited (now called 262) is the company that operates the Melbourne Crown Melbourne Limited). Casino as part of the Melbourne Casino Complex Casino Control Act means the Casino Control under the Melbourne Casino licence. Previously Act 1991 (Vic). known as Crown Casino Limited and Crown Limited. In this report, it is also referred to as the Casino Management Agreement means the casino operator and licensee. management agreement for the Melbourne Casino between the State of Victoria and Crown Melbourne Crown Perth is the casino operated in Perth Limited (as amended and in force), ratified by the under a licence granted under the Casino Control Casino Management Agreement Act. Act 1984 (WA). Crown Perth is owned by Crown Limited, and was formerly known as the Burswood Casino Management Agreement Act means the Entertainment Complex. Casino (Management Agreement) Act 1993 (Vic). DICJ is the Gaming Inspection and Coordination The casino operator or the licensee means Bureau in Macau Special Administrative Region. Crown Melbourne Limited as the sole licensee under the Casino Control Act. EBIT is earnings before interest and tax. CEO means Chief Executive Officer. EBITDA is earnings before interest, tax, depreciation and amortisation. CFO means Chief Financial Officer. 4 Fifth Review of the Casino Operator and Licence Glossary 5 Exclusion order means a written or oral order Inspector means a gambling and liquor inspector under section 72, or a written order under section appointed under section 40 of the VCGLR Act. 74, of the Casino Control Act, or an interstate exclusion order, prohibiting a person from Internal Control Statement is the documented entering or remaining in the Melbourne Casino or system of internal controls and administrative and Melbourne Casino Complex. accounting procedures for the Melbourne Casino approved by the VCGLR for the purposes of The Fourth Casino Review is the fourth review section 121 of the Casino Control Act. of the casino operator and licence, conducted under section 25 of the Casino Control Act and Interstate exclusion order means an order made completed in June 2008. by an interstate Chief Commissioner,