If governments were looking to orchestrate a seamless increase in economic activity from Asia’s organised crime sector, they would be hard-pressed finding a better solution than promoting a robust casino industry.
Casinos, or “integrated resort developments” as their advocates are wont to label them, are a most expeditious means of laundering those pesky proceeds of crime.
And as demonstrated on Monday evening by the ABC’s Four Corners, Australia is right on track.
The program found James Packer’s Melco Crown Entertainment and its rival Echo Entertainment have links with colourful Macau junket operators (some of which in turn are said to be associated with triad crime gangs). These junkets bring Chinese high-rollers across from the mainland to gamble in Macau, and now, it appears, to Australia as well.
While some of the junkets are not licensed even by regulators in Macau – and although Singapore has declined to license one single junket operator from Macau – they are apparently being embraced, or at least tolerated, by regulators in Victoria, NSW and Queensland.
Melco Crown, according to the ABC, in April warned the US Securities and Exchange Commission that, despite its anti-money laundering policies and its compliance with relevant laundering laws, its casinos might be targeted by organised crime.
The deafening silence from gaming regulators and politicians alike since the allegations were aired three days ago is telling, to say the least.
As evinced by this week’s lavish concessions to Crown Casino in Melbourne, the states have a rich history of toadying to the desires of casino operators and must be dearly wishing this probity kerfuffle just went away. Gaming represents 10 per cent of their tax base.
Although NSW might be handing out casino gigs untendered these days (Barangaroo), Queensland is ahead of the pack when it comes to sheer casino project volumes. There are three on the boil right now and less than three months to get the probity checks done.
It is simply not enough time to do the job properly. Historically, probity checks have taken at least a year. And with three months to deadline in Queensland, external investigators are yet to be appointed.
The key problem is that state governments are more addicted to gaming revenues than they are concerned with probity. Looking the other way is the order of the day.
In defence of regulators, it is difficult to build a case that would withstand scrutiny and repel the inevitable legal challenge from casino operators if they are banned or required to show cause why they should not be banned.
Yet the criminal associations have now reached Australia and insiders say there is already a lot of money-laundering going on. This is evident in the extravagant prices being paid by Chinese for real estate in Sydney and Melbourne. Roughly half that money, interestingly, is going to Melbourne, with only 35 per cent going to Sydney.
The NSW government has not helped matters by approving the unsolicited proposal by Crown Resorts to develop Barangaroo. While Crown is clean, some of its associates are not, as shown by Four Corners. According to industry insiders, the NSW investigators did the best they could, but it was obvious that the government wanted Crown and its associates to be cleared – and they were cleared, in a record three and a half months. Incredibly, the chief of the Independent Liquor and Gaming Authority even bragged about this “efficiency” despite ILGA keeping Singapore operator Genting waiting for more than two years.
The current Queensland situation is even worse, as you have a significant number of shadowy Chinese bidders (who have not been directly involved in the casino industry before) and their associates who are also supposed to be subjected to a quick-fire probity process from scratch.
Given their enormity and the global diversity of their business structure, it will be impossible to satisfy the broad requirements of the Queensland Casino Control Act in that time, particularly the provisions of Section 20.
As revealed here last month, one of the 25 per cent shareholders (Chow Tai Fook Enterprises) in Echo Entertainment’s consortium for the Queens Wharf acquired a 70 per cent stake in Sun City Gaming Promotion, a big junket operator in Macau, in January. The majority owner of this company, Cheng Yu-Tung, also owns 10 per cent of STDM, Stanley Ho’s company, which is the largest casino operator in Asia.
Queensland is relying heavily on NSW ILGA for probity investigations into the Queens Wharf project (albeit for the Crown and Echo components only) and will find it impossible to complete comprehensive investigations into Chinese applicants within the very short time agreed. There is an election slated for March next year and all probity, financial and legal investigations are scheduled for completion by mid-November.
And now, suddenly, a national current affairs show has put to air allegations which bring the NSW and Victorian probity processes – and their ongoing regulation – into serious question. Those allegations remain unchallenged.
In response to questions from Fairfax Media this week as to what steps the government was taking to address the Four Corners allegations, a spokesperson for Troy Grant, the NSW Minister for Hospitality, Gaming and Racing (and the Arts!), said: “The NSW government has confidence in the Independent Liquor and Gaming Authority to identify any matters of concern and take appropriate action to continue to ensure The Star casino and the proposed Crown Restricted Gaming Facility at Barangaroo are free from criminal influence and exploitation.”