One-eyed bandits

It is not right to say Crown operates without laws. It is truer to say that laws are made for Crown.

Under the terms of its licensing agreement in Victoria, the state will pay compensation to the casino should any measure to combat problem gambling affect profits. For the next 33 years, the state is liable for payments up to $200 million to Crown for losses related to lowered betting limits, precommitment technology, restricted access to cash machines, or any other recommended policy to treat the addiction of gambling.

Under the same deal, which locks in Crown’s licence until 2050, the casino managed to reduce its tax obligations. It pays no “super tax” on international and interstate VIP gaming.

Crown also got an extra 128 poker machine licences, 40 more tables on the casino floor and 50 additional automated game terminals.

In a statement to the stock exchange when the deal was done in 2014, Crown Resorts chairman James Packer said it corrected “a major competitive disadvantage on the issue of taxation”.

In Sydney, Packer’s harbour casino defies planning laws. The state’s “unsolicited bid” provisions allowed for it to be conceived without independent evaluation. Special legislation was still needed, and The Casino Control (Amendment) Bill was passed. In effect, as Anne Davies wrote in The Saturday Paper, “… James Packer was awarded a restricted gaming licence for a VIP casino on publicly owned land without tender”.

This week, Andrew Wilkie tabled tapes in parliament alleging Crown had serially conspired to increase its profits from poker machines. Moreover, Wilkie alleged, the Victorian regulator knew of tampering but did not take action. It simply directed that rigged machines be repaired.

Whistleblowers working with Wilkie claimed they had been directed to reset machines so as to reduce returns to players, taking down the mandated proportion of winnings. They said buttons on machines had been disabled to force higher bets and that other machines had their buttons shaved down so gamblers could jam them and cause the machine to play continuously, again increasing Crown’s takings.

The whistleblowers allege a conspiracy to avoid anti-fraud and money laundering regulations. They say the casino papered over domestic violence and allowed gamblers to play until they soiled themselves, offering new clothes so they could keep going.

For what it’s worth, Crown denies these stories. It “rejects the allegations made today under parliamentary privilege … concerning the improper manipulation of poker machines and other illegal or improper conduct at Crown Casino in Melbourne”. It “calls on Mr Wilkie to immediately provide to the relevant authorities all information relating to the matters alleged”.

An inquiry will now begin. On trial will be extraordinary corporate greed. Even without Wilkie’s allegations, Crown is a business running in a kind of moral vacuum, supported by subservient governments.

In a just world, the inquiry would not be limited simply to machine tampering and rapacious conduct. It would extend to the special relationship between governments and casinos.

These relationships are not only personal – although there is that, too, with a payroll that has included Tony Abbott’s chief of staff, Peta Credlin; Labor national secretary Karl Bitar; senator Mark Arbib; Howard government minister Helen Coonan.

It is not just money, either – although there are millions of dollars in state revenue and hundreds of thousands of dollars in political donations

The relationship is about a curious orthodoxy regarding casinos. Politics behaves as if it needs them. It has no appetite for regulation. It has refused decades of advocacy for reform.

That is why licences are given with extraordinary concessions, why planning laws are modified or public lands leased for dollar coins. It is why you can smoke in gaming rooms.

Casinos have always been there and always will be, this logic goes. They are a necessary evil.

Wilkie’s revelations bring this odd relationship into focus. Irrespective of what is found regarding Crown, they should ask a fundamental question: Why do governments do so much for casinos, and get so little in return?

This article was first published in the print edition of The Saturday Paper on Oct 20, 2017 as "One-eyed bandits".

During the final week of the election campaign we are unlocking all of our journalism. A free press is one you pay for. Now is the time to subscribe.

Sharing credit ×

Share this article, without restrictions.

You’ve shared all of your credits for this month. They will refresh on June 1. If you would like to share more, you can buy a gift subscription for a friend.