The state’s gaming watchdog swallowed it whole when Crown said its Perth venue was not embroiled in a money laundering scandal.
Crown assured the West Australian regulator its Perth casino was not involved in money laundering after the explosive scandal erupted in a 2019 report.
The watchdog swallowed the assurance, believing it “wouldn’t be misled”.
A 60 Minutes report that year detailed allegations Chinese high-rollers with links to triads had been funnelling vast sums of cash through the gaming giant in Australia via ‘junket tours’.
Last year, a NSW inquiry uncovered evidence it had happened at Crown’s Melbourne and Perth venues over several years, with Commissioner Patricia Bergin concluding it showed the company had “turned a blind eye” to the blatant conduct, sparking two separate royal commissions in WA and Victoria.
The Perth probe on Monday heard that the Gaming and Wagering Commission immediately requested a formal response from Crown to the Nine expose.
“They sought to give assurance that … they contested elements of the story, one might say, and that Crown Perth was not subject to accusations of a similar nature to the ones outlined in the program, which were around people bringing money into Crown Melbourne,” the former director general of WA’s Department of Local Government, Sport and Cultural Industries, Duncan Ord, testified.
“We were aware that the China business had concluded in 2016 and we were given assurances by Crown that the accusations were largely historic, and that they had taken action to correct risks that had arisen from that.
“We believed at that stage … that we wouldn’t be misled on those matters.”
He said the regulator “took a watch and wait and see approach” for follow up by federal financial crimes regulator AUSTRAC regarding any problem in Perth.
He denied WA’s regulators had accepted Crown’s response uncritically.
“We accepted we were being told the truth,” Mr Ord, who was also the chair of the GWC, told the investigation.
However, he eventually agreed with testimony from his successor Lanie Chopping last week that Crown had enjoyed “an excessive level of trust”, and that the GWC and department were “not as suspicious” as they should have been.
“I think it would be a reasonable view to take for a new DG. I would probably do the same if we were in reverse roles,” Mr Ord said.
Counsel assisting pressed further.
“I just asked you whether you agreed with that evidence,” she said.
“And I said yes,” Mr Ord shot back.
The royal commission also heard a compliance review – assessing the regulatory oversight of Crown – took some three years to complete, with Mr Ord saying it stalled due to “work pressures in the department” including meeting “a range of election commitments”.
An estimate of six to eight months was given in August 2017, when Mr Ord took on the top job at the regulator as part of the McGowan government’s sweeping government department amalgamations.
“We always intended to complete the work – there were a series of delays brought about by, as I said, the pressures the department was under in a range of other areas,” Mr Ord said.
“Particularly, we had major inquiries in liquor licensing, significant legislative reform work going on as well. We had to at times prioritise those matters as there were lives at risk.”
Mr Ord said an external auditor was engaged in mid-to-late 2020 to speed up the review.
“I was concerned that we hadn’t completed everything that we needed to do.”
“Three years down the track? Ms Cahill cut in.
“Would you accept that as chair of the GWC you did not do enough during your tenure to ensure the progress and completion of the compliance review?” she then asked.
“In hindsight, I could have tried to prioritise that over other matters,” Mr Ord replied.
“But I still contend that I was of the belief that our current program of audit of the activities of Crown … was appropriate, the risks were being managed and that this work to, if you like, modernise and improve our oversight of risks would be accommodated and done as soon as we could do them.”
Mr Ord stepped down in May, before his slated retirement in August and just after he first testified at the royal commission, admitting he had no experience in casino regulation before taking on the dual GWC and department roles.
In February, GWC chief casino officer Michael Connolly stood down after it emerged he had a longstanding fishing friendship with members of Crown’s legal and compliance team.
At the time, Mr Ord said Mr Connolly had previously declared the relationships and stood aside merely to avoid any “perception of a conflict of interest”.
The royal commission last month heard Mr Connolly and the Crown employees engaged in blokey “banter” in emails arranging the fishing trips on his boat, which he jokingly named “The Good Ship Compliance”.
“The typical theme of these emails was to accuse one or more of the group of being unmanly and henpecked by their wives,” Ms Cahill said at the time.
In one, Mr Connolly wrote he got to “wear pants in his house, and has requested and received permission for a sleepover in Jurien (Bay)”.
“What’s the story with the rest of you? Can I send a note home in your school bag if you like?” Ms Cahill read from the email.
“Has everyone got their permission slips in order or are we postponing until gender reassignment is complete?”
Originally published as ‘We wouldn’t be misled’: Crown assured regulator Perth casino was not embroiled in money laundering scandal
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