Crown Resorts Sues Insurer Over A$72.5M Casino Scandal Settlement

Australian casino giant Crown Resorts is suing an insurer it claims should help cover an A$72.5 million shareholder class-action settlement linked to its money laundering and governance scandals. Crown agreed to pay A$72.5 million to settle shareholder claims without admitting liability. More than a year later, a battle is brewing over how much of that tab its insurers should pick up. (Image: Shutterstock) Crown filed the lawsuit against RiverStone International in the Supreme Court of Victoria, accusing the insurer of refusing to pay under excess insurance policies that Crown says cover the settlement. The settlement resolved a shareholder class action filed in 2020 after Crown’s share price tanked because of revelations about anti-money laundering (AML) failures. The lawsuit alleged Crown made misleading statements about its compliance with AML regulations and failed to properly disclose problems involving its VIP international business and junket program. Crown agreed to the A$72.5 million (US$51 million) settlement last year without admitting liability. Told to Act ‘Uninsured’ Crown held multiple layers of directors and officers insurance designed to protect the company and its executives against legal claims. Its primary insurer, AIG, paid A$7.5 million ($5.3 million) before that layer of coverage was exhausted, according to the Sydney Morning Herald. RiverStone held 50% of the risk on Crown’s fourth- and fifth-layer excess policies but has declined to pay, prompting Crown’s lawsuit. Crown claims RiverStone and other insurers instructed the casino operator to act as though it were “uninsured” while negotiating the shareholder settlement. The reason for that is unclear. RiverStone has yet to file its defense, and the insurer declined to comment to the newspaper. Crown is seeking payment under the policies, plus interest, although it’s unclear from court documents how much Crown believes RiverStone owes. Crown is still facing a substantial portion of the class action bill. Under the settlement approved by the Supreme Court of Victoria, Crown agreed to pay the A$72.5 million in three installments. It paid A$20 million in 2025 and another A$25 million by May 11 this year. A final A$27.5 million payment is due by May 10, 2027. Crown Scandals Hit Shares The class action followed years of scrutiny of Crown’s operations, including allegations surrounding its relationships with Asian VIP junket operators and money laundering at its casinos. Australia’s financial crimes regulator, AUSTRAC, announced an enforcement investigation into Crown Melbourne in October 2020, triggering a sharp fall in the company’s share price. The shareholder lawsuit was filed that December. The scandals led regulators in three Australian states to find Crown unsuitable to operate casinos, although it was permitted to continue operating in Melbourne and Perth under stringent oversight, while its new Sydney casino was initially prevented from opening for gaming. Crown subsequently underwent sweeping regulatory investigations and reforms. The company is no longer publicly traded after US private equity giant Blackstone acquired Crown Resorts for A$8.9 billion (US$6.2 billion) in 2022. The post Crown Resorts Sues Insurer Over A$72.5M Casino Scandal Settlement appeared first on Casino.org.