One of the stranger comments in the otherwise hardline response to the Sydney Star casino report by the head of the NSW Independent Casino Commission was that Star threw its “moral compass out the window”.
The observation by Philip Crawford (to the journalist who did so much to expose the misconduct at Star and Crown, Nick McKenzie) is based on a risible assumption that Star had any moral compass to begin with.
Star and Crown have been slowly but surely exposed as two of the most malignant corporate actors in Australian history — exploitation of gamblers, links with organised crime, money laundering on an industrial scale, contempt for regulations and regulators, tax avoidance. They’ve been exposed because of the outstanding work of McKenzie and other journalists — not via regulators or governments.
Star and Crown paid good money for being able to act so outrageously for so long with so little regulatory response: they’ve paid $2.73 million in donations to the Labor, Liberal and National parties since 2007, according to Electoral Commission data — mostly to state branches of those parties where a few hundred thousand dollars goes a long, long way.
One of the issues to be taken into account by the commission in its response to the Bell report will be the impact on “innocent victims” of the scandal — the staff employed by Star at its casino in Sydney (the same issue will apply in Brisbane, where an inquiry is revealing similar misconduct by Star there). That might, possibly, be an issue in the middle of a catastrophic recession. But we’re at full employment and crying out for workers — the idea that jobs is an excuse to thwart the summary execution of Star as a functioning entity is absurd.
But despite their large size, Star and Crown are relative bit-players when it comes to the influence wielded by the malignant gambling industry. The club industry across Australia has handed over $3.1 million to governments across Australia in the past 15 years, again mainly to state governments.
And the clubs in turn pale in comparison with hotel peak bodies. They’ve given nearly $8.7 million to the major parties since 2007.
That nearly $12 million in donations isn’t the only glue that cements the hospitality industry to major parties. The tens of billions of dollars they suck out of the community via poker machines generates many hundreds of millions of dollars a year in revenue.
Much of that money comes from low-income earners. Poker machine tax revenue acts as a voluntary tax for state governments — the best kind. But it’s also clear much of it comes from that staple of the business model of Crown and Star, money laundering.
With the lax regulation of poker machines, it’s clear that state governments — less so in Western Australia where poker machines are confined to Crown Perth — have been silent partners to organised crime and its need for money laundering.
The only effective regulator in all of this has been AUSTRAC, the federal government’s financial intelligence group, which has found significant problems at Crown and Star, fined Tabcorp for breaching money-laundering regulations in 2017 and which is investigating other casinos in Adelaide, Brisbane (owned by Star) and Cairns.
AUSTRAC has been playing catch-up with the media on Star and Crown — until this week when it announced it was investigating British company Entain, one of the world’s biggest gambling businesses, which operates online betting here. Entain was recently fined the equivalent of $20 million in the UK for — you guessed it — breaches of anti-money-laundering laws.
The wagering licences in Victoria, currently held by Tabcorp, become available next year and Entain was a frontrunner for that. In WA, the state Labor government is looking to sell its TAB licence — another race in which Entain was one of the frontrunners.
Even for those of us who regard gambling as entirely a matter for people foolish enough to waste their money that way, the conduct of Star and Crown, and the clubs and pubs lobby, makes the industry a cancer embedded deep in Australia’s social life and political institutions.
It is an industry that bends states to its will, in the name of profits, leaving a steady trail of victims. It sinks its claws deep into state governments of all kinds — in NSW, Victoria, Queensland, Tasmania — and targets anyone who threatens or exposes it.
Excising the cancer will take a lot more than extra regulation and talk of moral compasses.
Should all casinos be closed? Or should those so inclined be allowed to keep on throwing away their money? Let us know your thoughts by writing to letters@crikey.com.au. Please include your full name to be considered for publication. We reserve the right to edit for length and clarity.
Tighter regulation – with dire penalties – is vital.
And banning political donations. The Greens survive without the dirty money donations, so can major parties if they dare to wean themselves off.
This morning’s New Daily has a good article on the way the gambling industry has enmeshed itself into almost every political party in the country (the Greens excepted). There are other issues apart from the casual coercion of governments, money laundering and organized crime opportunities. Five years back it was estimated that 40% of profits come from problem gamblers, and the industry has bent over backwards to ensure that no effective measures are in place to stop this. We jail anyone who sells heroin or crystal meth, but we allow this ruin of lives to continue almost unopposed.
Yes Frank, one has to ask if the reason Bikie Gangs are illegal is because they do not make large enough donations to Political Parties. I see the same business modus operandi in both cases.
Same for cigarettes and alcohol – but the State gets a massive kickback, so it’s all ok it gets it’s profit. I’ve always thought if you can’t control it tax it. A fifty pack of cigarettes cost close to $100 – a great encouragement to give up (or try cheaper heroin meth?).
Anyone involved in gambling has no moral compass full stop. That includes the various racing industries. It also includes political parties. Please note that the publicly declared donations are most likely only the tip of the iceberg. More significant will be the benefits awarded to individuals in government who make the decisions that bring laws into being and dont monitor the offenders. Wish we could get a handle on the secret corruption money going to these individuals.
It seems as though gambling royalties paid to state governments (along with political party donations) legitimises gambling in a way that bikie gangs and the Mafia could only dream of. Not to worry, casino operations work a treat for laundering money anyway.
Sorry Peter, just came accross your response seems we were thinking along the same lines.
When the ALP in Tasmania took a policy of getting rid or poker machines in pubs to an election not long ago the mobilisation against this policy from gambling companies and pubs was extraordinary – both local and interstate. The party lost that election and then dropped the policy. Not one person of my acquaintance was against that policy, and I believe a fairly large minority supported it. But it will be a very long time before any party goes to an election with the policy IMHO.
great observation