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Casino Control Amendment (Inquiries) Bill 2020

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Cate Faehrmann
NSW Greens MP
27 August 2020

On behalf of The Greens, I speak in support of the Casino Control Amendments (Inquiries) Bill 2020, which amends the Casino Control Act 1992 to clarify that inquiries conducted under the Act have the same powers as a royal commission conducted under the Royal Commissions Act 1923. The bill will assist the Independent Liquor & Gaming Authority in its current inquiry into matters relating to various Crown casino entities and Melco Resorts & Entertainment Limited. That inquiry, which is being undertaken by Justice Bergin, has been operating on the basis that section 143A of the Casino Control Act 1992 picked up certain provisions of the Royal Commissions Act, effectively giving the inquiry the same powers and protections as a royal commission. Those powers allow the Bergin inquiry, and any future inquiry, to compel a witness to answer questions or produce documents even if they are subject to claims of privilege.

However, the amendments in the bill render any privileged testimony or documents collected by the inquiry as inadmissible in civil or criminal proceedings. The powers prevail over any inconsistent provisions of any other legislation. In February this year, Melco was successful in its Supreme Court case where it argued that it was not required to hand over documents because the inquiry did not have the same powers as a royal commission and therefore the documents were protected under legal professional privilege. The decision by the Supreme Court was overturned by the Court of Appeal in March. In June the High Court refused special leave to Melco to appeal the decision of the Court of Appeal, noting that there was no reason to doubt that the decision by the court was correct. While this has reaffirmed the powers of an inquiry under the Casino Control Act, it has been a costly and time-consuming process that has unnecessarily slowed down the Bergin casino inquiry.

By amending the Casino Control Act to clarify the powers of an inquiry held under the Act, the bill will avoid the risk of further court action that would delay the important Bergin inquiry further. We must ensure that does not happen, because the inquiry is long overdue. The inquiry was triggered last July by two separate incidents and will determine whether Crown Resorts is fit to retain its licence to operate its Barangaroo Crown casino. The first incident was a series of reports inTheSydney Morning Herald andThe Age by investigative journalists Nick McKenzie, Nick Toscano and Grace Tobin and was a result of one of the biggest corporate data leaks in Australia. Essentially the investigation, based upon the data leaked by whistleblowers, claimed that Crown Resorts was using junkets funded by organised crime syndicates in Asia to attract Chinese high rollers to its casinos. One explosive article published on 28 July 2019 detailed how one high roller, Tom Zhou, was "provided access to private jets, luxury hotel suites, lavish gifts and tickets to concerts by James Packer's then girlfriend, Mariah Carey". It also detailed how Crown Resorts personally appealed to the Federal Government to obtain visas for Zhou and his associates.

By operating his own junkets, Zhou was instrumental in helping Crown circumvent Chinese laws that outlaw the promotion of gambling and tours designed to lure the rich and powerful to gamble overseas. Investigations into the junkets allege that they act as a way to smuggle money out of China or launder criminally obtained funds. High rollers deposit funds with the junket operator, who has access to offshore funds. They then provide high rollers with casino chips and facilitate their gambling in Australia.The Age revealed:

… Zhou is no ordinary Crown partner. He is, in fact, an international criminal fugitive, the subject of an Interpol red notice for financial crime that netted him tens of millions of dollars. He is supposed to be arrested immediately if he crosses a country’s border.

In the first two weeks of 2015, Zhou's junket had delivered $24 million to Crown, and within three months it had reached $1.452 billion. That is just one of many Chinese high roller junket operations that have funnelled billions of dollars into Crown Resorts, yet James Packer and Crown Resorts claim ignorance of the actions of the junket operators in China and their role in money laundering. Leaked documents from whistleblowers reveal that Crown Resorts actively sought out the business of junket operators. One leaked document from 2014 reveals that Zhou's junket was named by Crown as one of eight junkets specially selected because they were large, reputable and deemed creditworthy in large amounts. You really have to wonder whether certain people in high places in the casino world can read between the lines of "creditworthy in large amounts".

One whistleblower leaked CCTV footage to the ABC showing bricks of cash being counted in exchange for poker chips. The ABC also obtained leaked reports from the Victorian Commission for Gambling and Liquor Regulation dating back to 2017, detailing inspectors' concerns about those types of transactions. The whistleblower claimed that foreign high rollers avoid customs inspections and often exchange huge amounts of cash flow without a trace, and that Crown operated as a law unto itself. The inquiry heard from Paul Bromberg from Spectrum Asia, who said that Australia is far behind countries like Singapore and the US gaming States like New Jersey, which require junket operators to be licensed, and Japan, which has banned the practice entirely. Instead Australia leaves the licensing and probity checks of junkets up to the casinos themselves.

I now turn briefly to the second incident, which is the sale of an almost 10 per cent stake in Crown Resorts to Lawrence Ho, director of Lanceford Company Limited. Lanceford is one of 59 companies and people listed as associates of Lawrence Ho's father, Stanley Ho, who are banned from doing business with Crown. Stanley Ho, along with companies and people considered his associates, were banned in 2014 from any association with Crown Resort's Barangaroo licence due to his alleged links with organised crime. That had been a secret condition of Crown's licence until the list was uncovered in August last year. That is another example of the secrecy surrounding the regulation of casinos in this State and in this country. Lawrence Ho was often accused of having close ties with Triad crime gangs. He is responsible for establishing Macau as an international gambling centre and has close ties with the many junket operators working out of the region.

In fact, the Independent Liquor and Gaming Authority [ILGA] has long been concerned about the relationship between Mr Packer and the Hos. Its insistence that Stanley Ho and his associates cannot be involved in the project dates back to 2014. In April 2020 Lanceford sold its 10 per cent stake to the American private equity firm Blackstone, but ILGA will still investigate whether James Packer's sale breached the Crown casino's Barangaroo licence. The bill is needed to ensure that the Bergin inquiry into Crown Resorts is not hindered by further court actions; that the companies and persons involved are not able to hide behind legal privilege; and that those allegations of criminal misconduct can be fully investigated to determine whether the licensee is a suitable person to continue to give effect to the Barangaroo restricted gaming licence.

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Cate Faehrmann
NSW Greens MP
27 August 2020
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