Victorian royal commission focuses on Crown’s problem gambling strategies

The Victorian royal commission into Crown Resorts will have a focus on harm reduction strategies the operator implements at its Melbourne casino.

The Guardian reports that after opening the inquiry on March 24, royal commissioner Ray Finkelstein said there was “no practical utility” in going over the same territory dealt with by the NSW inquiry, which reported to state parliament last February.

Instead, he said he planned to use the limited time he has available, he is supposed to provide his final report by August, to look into four other areas: whether money laundering is still taking place at the Melbourne casino, whether Crown is in breach of any laws or regulations, whether it has broken its contract with the state to run the casino and “most importantly, the manner in which it deals with gambling addiction”.

This means Finkelstein’s inquiry will descend from the upstairs suites where, in pre-COVID and pre-scandal times, high rollers smoked at baccarat tables and junket operators plied their trade on the main gaming floor, an area as big as a football field crammed with poker machines and gaming tables.

While high rollers can be lucrative, blowing millions of dollars in a few days, the business is also highly volatile due to the narrow house margin on the game favoured by Asian gamblers, baccarat.

It is the steady flow of more ordinary folk through the building that provides the casino with a predictable flow of cash.

In the casino trade, it’s called “grind”.

And in Australia, a country that loves a punt, there’s plenty of it.

“Crown is very much a harm-production factory,” said one of the casino’s most consistent critics, gambling researcher Charles Livingstone.

“This is because it’s open 24 hours per day almost every day of the year, because it’s centrally located and because it has a very large and busy main floor along with high roller rooms, including those for people who use electronic gaming machines.

“We know that large venues attract higher expenditure and higher rates of harm.”

Former Crown employee sheds light on problem gambling

Livingstone, as an associate professor at Monash University, said that based on data in Crown’s annual report, in a normal, non-COVID year, its 2600 poker machines are the most lucrative in the state.

“Pokies at Crown make about $185,000 each per annum, well above the revenue of clubs and pubs,” he said.

Club electronic gaming machines average $73,250 per machine and hotels $129,000.

It’s on the main floor that most of the social damage wrought by Crown is done, one former employee asid.

Generally speaking, high rollers can afford to squander the vast sums they push across the baccarat table.

Some high rollers are so unconcerned by their losses that they call the chips used for denominations of up to $5000 “smash” and hand them out as tips to staff, preferring to deal only in the plaques by which casinos mark higher values.

“But on the main floor, a wage earner spending $500 to $600 is compromising their lifestyle.”

“The harm is not to whales, it’s to people living month-to-month.”

Crown goes to a lot of effort to keep people coming back to their pokies cave.

The freebies it showers on its high rollers, hotel suites, meals, flights on its corporate jets, are replicated at a smaller scale among common folk.

The casino runs a rewards scheme for frequent gamblers that ranges from bronze through gold and platinum to black.

At the top end, freebies include hotel rooms, but at a lower level, incentives can be as simple as a birthday card.

The former Crown employee said people who lose more than they can afford also become prey for loan sharks who charge as much as 2.5 per cent interest a week.

To pay off the debts, they can be drawn into sex work, money laundering or acting as a drug mule, the employee said.

Crown has always maintained that it has policies and procedures in place to deal with problem gambling and the presence of organised crime.

In its last review of the casino license in 2018, the Victorian Commission for Gambling and Liquor Regulation, questioned how well Crown was tackling problem gambling.

“Despite a policy in which staff are required to intervene when observable signs of problem gambling are detected, statistics provided to the VCGLR for the review indicate a relatively low level of activity and very little by way of referral from floor staff, who are the eyes and ears of the casino,” the authority said in its review.