CROWN Resorts (ASX: CWN) has suffered a major share slide after it was alleged Melbourne's Crown Casino deliberately tampered with poker machines and turned a blind eye to drug use and violence.
In damning evidence tabled before Federal Parliament, whistleblowers have accused the James Packer-owned casino of "shaving down" the buttons on poker machines to allow for illegal continuous play.
This means that people can wedge paper into the 'play' button so the machine keeps turning over without additional presses.
It was also alleged punters were given guitar picks by staff to keep machines spinning and that when inspectors from Victoria's gambling watchdog saw the buttons were disabled, they ordered them to be fixed but did not take further action.
Video evidence tabled by Independent MP Andrew Wilkie includes allegations from three former Crown Melbourne staff that they were told to remove betting options from pokies and to regularly reset machines' memory to lower returns.
"Moreover, there's software manipulation to increase gambler losses even further - in particular on weekends when the number of naive first-time and casual users is obviously much greater,' Wilkie told Parliament.
It's also alleged staff were instructed to use different player ID cards when processing transactions over $10,000 to avoid reporting to the anti-money laundering agency, Austrac, and that some punters were given clean clothes by the casino as they had soiled themselves while gambling and this allowed them to continue.
The testimony was presented as part of "Pokie-leaks", a campaign launched by Wilkie and fellow MP Nick Xenophon to expose illicit practices in the industry. It's the first time that video evidence has been presented in Parliament.
The former workers also said staff were instructed to ignore illegal drug use and cover up incidents of family violence and not alert police.
Outside Parliament, Wilkie called for an inquiry into the allegations.
"The challenge is now for the law enforcement and the regulatory agencies to conduct their own inquiries," Wilkie says.
In a statement to the ASX on Wednesday, Crown rejected the allegations and called on Wilkie to immediately provide to the relevant authorities all information relating to the matters alleged.
The allegations were made as the Victorian government conducts its five-yearly review of Crown Casino's licence.
Last month, it was announced that James Packer's Crown Resorts and Aristocrat Leisure were the subject of a landmark legal case which promises to highlight the "deceptive and misleading behaviour" of pokies manufacturers and venues.
Maurice Blackburn Lawyers is representing lead applicant Shonica Guy against Crown Melbourne Limited, which has the machines within its casino, and Aristocrat Technologies Australia, who manufacture the Dolphin Treasure machine.
Ms Guy played poker machines for 14 years and claims she suffered significant losses, after she first started playing at the age of 17.
If successful, the litigation would have ramifications for the design of all pokie machines in the industry.
The case centres on allegations that the Dolphin Treasure machine misrepresents the true chances of winning due to deliberate design features in the machine's reels and symbols.
As at around midday, CWN shares were down by 7 per cent to $10.90.
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