Gatto was regularly photographed chomping on a fat cigar, his fleshy face shrouded in a cloud of smoke. A doyen of Melbourne’s inner-city suburb of Carlton, Gatto was an old-school Italian mafioso-style character who favoured designer suits and owned a luxury Mercedes. Gatto had a longstanding friendship with Graham ‘The Munster’ Kinniburgh, described as a ‘classic old-style crook – a grandfather, gentleman, gastronome and gangster’, who himself was taken out by a hitman in the war.4

  As different as they were, the careers of Gatto and Williams showed that Crown Casino had become a favoured hangout for some of Melbourne’s most infamous characters. This was confirmed two months after Williams and Gatto were banned, when Assistant Commissioner Simon Overland proposed casino bans on a further 80 suspected organised crime figures. His announcement suggested that organised crime was out of control in Melbourne.

  Police were not only dealing with a war in which blood was being spilled on the streets of Melbourne, but with underworld figures who had become media celebrities. In fact, according to Lachlan McCulloch, a one-time undercover drug squad detective, Melbourne’s gangsters deliberately cultivated their celebrity status by learning the lines and emulating the behaviour of ‘bad-guy’ characters from movies like Scarface and The Godfather.5 It was a chilling example of life imitating art.

  Melbourne’s gangland wars have been immortalised in several bestselling books and in the hit TV series Underbelly, but they also form part of the bigger story of Crown’s first decade, which witnessed the growth of a toxic culture of corporate greed, money laundering and gangs. As The Age’s Gary Hughes wrote on the tenth anniversary of Crown’s 1994 opening, allegations were widespread that the casino had become ‘little more than a glittering laundromat for the dirty cash generated by Melbourne’s underworld’.6

  Underworld figures such as Williams, as well as those alleged to be of the same world, were attracted by Crown’s bright lights, by the chance to rub shoulders with fellow hoods and by the opportunity to feed their egos by winning admission to the Mahogany Room. Flaunting their wealth and success was part of their schtick, and they liked to use Crown as a place to network. Given that there were security cameras everywhere, there was almost no chance there that they’d become a casualty of the war, at least inside the venue.7 While Crown obviously had no hand in creating the gangland wars, it did play a role in fostering this culture.

  Clearly, this development put the general public at risk. But police also believed that cashed-up drug dealers were laundering their ill-gotten gains through the casino. Crown was turning a blind eye to another lucrative source of company profits, too: gambling addicts who stole large amounts from their employers to feed their addiction. These were ordinary citizens caught in a web of glamour and glitz as they were feted by Crown. Both areas raise fundamental questions about the company’s culture and the failure of the regulatory system to keep it responsible and to prevent harm to the community.

  How did Crown immerse itself in the dark side of the casino industry? Greed is the short but predictable answer. Crown’s culture was centred on the maximisation of profits. As Gary Hughes put it in the early 2000s, ‘Money is the great equaliser at Crown Casino. No questions asked.’8 And successive Victorian governments, more concerned about gambling revenues and tourism jobs than about combating criminal behaviour, were willing accomplices.

  ‘Light touch’ regulation

  Around the world, there are two broad approaches to the regulation of casinos: some regimes are strict and some are what we might call ‘light touch’. Singapore is an example of the former and, as we have already seen, Crown was clearly an example of the latter. It proved a disastrous mistake for both the company and for Victorian society more broadly.

  Singaporean casino regulations, updated in 2024, involve a $114 admission charge for locals (to discourage them from gambling); a ban on ATMs at venues; a minimum age of entry of 21; assessing patrons for financial vulnerability; penalties for providing false information to the gambling authority; and a government-appointed authority that ensures licensees are fit and proper people to offer gambling services. In other words, the regulatory system is designed to minimise harm.

  The same aims were supposed to guide the regulation of Crown’s Southbank operations when it was established. But Crown’s ‘light touch’ approach ensured that they did not.

  Crown was also subject to legislation governing the proceeds of crime: it was an offence to accept ownership of, or responsibility for, property or money after a crime has been committed. Knowingly accepting drug money in a casino, for example, potentially falls under the Act. Crown was also legally required to report transactions of $10 000 and above to the anti-money-laundering agency AUSTRAC, which was supposed to assess suspicious cases and hand them over to the National Crime Authority, and/or the state or federal police. Wide-ranging anti-money-laundering regulations under the federal Criminal Code Act 1995 also applied to Crown’s operations.

  Lastly, the business activities of the casino came under federal corporations law, which, broadly speaking, mandates that the boards and senior management of companies must exercise due care and diligence in their operations.

  Within several years of opening its doors, Crown arguably was breeching its own Code of Conduct regularly, as well as the proceeds of crime legislation and corporations law.

  Money laundering and the drug trade

  As journalist Ben Hills observed in 1997, one of the most important factors in Crown’s success was its aggressive grab for the international high rollers’ market – mostly Asian businessmen prepared to wager millions in a single session. ‘Nothing is too good for them,’ Hills noted. ‘When [Crown’s] two Gulfstream jets could not cope with a rush of Hong Kong businessmen seeking a multi-million-dollar flutter over the Chinese New Year, Crown chartered a Boeing 767 at a cost of $500 000 to fly 250 gamblers and their families to Melbourne for the week.’9

  Such aggressive marketing put Crown’s reputation at severe risk: some of the high rollers attracted to casinos were multi-millionaire Asian and Australian drug dealers and gang members. Many wanted to launder money through Crown while also indulging their gambling habits. But some high rollers were simply, and tragically, problem gamblers who were betting beyond their means. And under Crown’s light-touch regulation, the casino did its own vetting of these high rollers. A lot could go wrong.

  In 1997 the public got an early insight into the link between ‘kingpin’ drug dealers and casinos when New South Wales police commissioner Peter Ryan announced that Van Duong – also known as Duong Van La – was banned from Star City Casino. The decision was based on intelligence gathered by the state’s drugs task force. Documents showed that Van Doung, in the previous six months, had turned over $94 million at the casino.10

  A subsequent investigation by two Sydney Morning Herald journalists found that Van Duong was a major distributor of heroin in the Western Sydney suburb of Cabramatta.11 In the previous five years the suburb had been flooded with heroin, to the point that more than 400 people a year were being treated by the ambulance service for overdoses. According to Tony Hoang, a former participant in Cabramatta’s Vietnamese 1990s drug culture, heroin had transformed the area into an underground network of gangs, guns and machetes.12

  Van Duong’s family had escaped Vietnam in the 1970s and settled in Australia. In the late 1980s, along with a group of countrymen, he began dealing drugs, and eventually was financing his own importation, 10 to 20 kilograms at a time, turning a $200 000 investment into a street value of between $1 million and $2 million a kilo.

  The big money he was earning fed Van Duong’s growing ego. According to a Federal Police officer, he loved the high life and being the centre of attention: ‘When he went to the casino he would park his car right out in front. He would go nuts if he wasn’t allowed to park where he wanted to. He gets whatever he wants.’ By the time he was issued a ban by Star City’s management, Van Doung and his family owned several large new houses. He lived in one with his wife, while in another he installed his mistress, a Vietnamese nightclub singer.

  This story of a sleazy drug dealer turned millionaire was not unique, but it has a deeper significance. What happened to Van Duong after he was banned from Star City revealed Crown’s ruthless disregard of their clients’ criminality.

  Because after he was banned by Star City, Crown management pounced on Van Duong. A former Star City director later explained that Van Duong was inundated with offers from Crown and other casinos. There was nothing subtle about it: ‘they were all over him like a rash. It was like a feeding frenzy to see who could get him first.’ They further explained that Crown’s management justified to themselves that they didn’t know where Van Duong’s money came from. ‘But everybody knew, we just didn’t talk about it.’13

  Van Duong subsequently lavished other casinos with his ill-gotten cash, but his gambling came to an abrupt end in 1998 when he was arrested over the supply of $75 000 worth of heroin outside a Cabramatta school.14 It is not known whether Van Duong was engaged in money laundering or just blowing his stash at casinos. Either way, Crown was unconcerned. Crucially, his case showed that Crown was prepared to profit from drug money so long as it could pretend it didn’t know where the cash came from.

  At much the same time, an even bigger embarrassment awaited Crown’s management in Melbourne. When founder Lloyd Williams was relieved of his position as CEO by Kerry Packer in 1997, he’d been kept on to develop Crown’s Asian high roller market. And he remained the most powerful figure in the company, aside from the Packers themselves. Under Williams’ influence, Crown opened offices throughout South-East Asia to recruit lucrative patrons. But, like Star City, Crown had not established a risk-management policy to avoid criminal types. It’s not clear whether Williams was unaware of the potential threat from criminal Asian gangs or whether Crown, at the time, had a policy of simply: ‘Don’t ask.’

  It was under these circumstances that, in 1997, Crown lured Ko Kon Tong to Melbourne. Crown’s interest in Tong was his high personal net worth and his propensity to gamble.15 He was simply fodder for Crown’s bottom line during his two-year stay at the casino. He was known to Crown’s Hong Kong office, whose staff were encouraged to recruit known high rollers. Tong’s lawyer later explained that the reason his client visited Australia in the first place was Crown’s generous offer for him to come and gamble.

  In fact, Tong was offered not just the usual red-carpet treatment of free accommodation, meals and flights, but also piles of ‘lucky money’ – free cash to keep him at Crown. In all, Crown paid Tong $2.5 million during his stay there. Management was simply mesmerised by his willingness to splash truckloads of money at the venue’s tables. In all, Tong burned in excess of $420 million at Crown.

  Inevitably, Tong was revealed to be not just a cashed-up high roller. He was, in fact, the leader of a violent Hong Kong triad gang involved in drug trafficking. He was well known to the Hong Kong police, who described the gang’s modus operandi: ‘If they have a dispute they will quite readily go and chop or shoot the opposition, rather than talk about it.’

  Tong had had a long career in the heroin trade before Crown lured him to their premises. And he had an equally long criminal record for offences including drug trafficking, assault, criminal damage and illegal gambling. If Crown had done any due diligence – as required under corporations law – Tong’s nefarious record would have quickly come to light. It didn’t, because Crown was deeply invested in its high roller program, underpinned by its ‘ask no questions’ approach.

  And so Tong arrived with his wife, Jenny Tsui, a former beauty queen who was also a gambler and drug dealer. Together they projected movie star–like appeal in the secluded Mahogony Room. Tsui’s natural attractiveness complemented Tong’s garish penchant for bright yellow or purple jackets and diamond-encrusted watches. The couple was feted by Crown during their stay.

  Behind the glittering aura generated by the couple, Tong had another purpose in coming to Australia, as prosecutors later explained at his trial: ‘The real mission of Ko Kon Tong was as the promotor and facilitator of the supply of large quantities of high-grade heroin into Melbourne.’ Police intelligence established that triad bosses in Hong Kong and China had become increasingly frustrated by having to pay off so many people before their heroin hit Melbourne’s streets, so they decided to set up their own Australia-based syndicate; Tong was to be its boss.

  In between his gambling escapades, Tong stayed in the apartment Crown management had given him free of charge, and he used it to execute heroin deals. He stored heroin shipments in a Southbank car park that he could see from his window. Tong wouldn’t risk being personally exposed in the deals. One of his trusty deputies ferried the drugs in a Toyota Corolla to a safe location, where it was distributed to buyers who had paid in advance. Much of the money he earned was laundered and transferred out of Australia.

  Tong’s career ended abruptly in August 1999, when the National Crime Authority (NCA) raided his suite and arrested him. Crown had been complying with its money-laundering responsibilities and sending off reports of transactions to AUSTRAC, including those executed by Tong. The agency told the NCA about Tong’s high-living and high-rolling gambling habits, prompting it to investigate him. After being informed of the NCA’s investigations, Crown cooperated, allowing the installation of listening devices in Tong’s apartment, and it was by this means that the necessary evidence to arrest and convict him was obtained.

  After Tong’s arrest became public knowledge, Crown went on a public relations offensive. A company spokesperson crowed to the press about its role in Tong’s arrest: ‘It was a sting operation in the sense that we were very active in helping the NCA to compile evidence against a target of theirs.’ Tong’s business was not the sort Crown wanted, he added. But the company’s attempt at PR was entirely self-serving. Crown had been perfectly happy to fawn over Tong and his wife until the NCA came knocking.

  Countering money laundering became more urgent after the 11 September 2001 terrorist demolition of New York’s Twin Towers, because of the potential for illegally obtained funds to be directed at such diabolical activities. Nonetheless, cases still occurred at Crown.16

  There was more than a whiff of arrogance and greed about Crown’s culture in their belief that they could simply get away with risky and unethical behaviour. And why wouldn’t they? The power network surrounding Crown linked Lloyd Williams, Jeff Kennett and the Packers. As the Australian Financial Review’s senior national correspondent commented at the time, Crown symbolised ‘the tribal world of business and friendship’.17 Most people didn’t understand that this was the way politics increasingly worked.

  But threats to Crown’s ability to attract Asian higher rollers were looming by the early 2000s. As China’s economy began to produce multimillionaires, increased competition started to come from Asian countries. Macau, the former Portuguese colony on mainland China and the country’s only legalised gambling hub, issued new casino licences. Taiwan flagged more licences too, and Las Vegas casino mogul Sheldon Adelson announced he’d be spending nearly US$2 billion on a 500-room complex, complete with a replica Venetian street and Grand Canal.18

  The pressure was on. So the Packers refurbished the 36th floor of Crown’s Yarra River venue to give high rollers more of what they wanted: privacy. But how was this global competition for high rollers to be paid for? More high rollers. The casino’s business model was a financial and political quagmire.

  The rise of the amphetamine trade

  From the late 1990s, amphetamines replaced heroin as the most lucrative drug for traffickers. In part, this resulted from a so-called heroin drought, when supply of the drug from Afghanistan dried up while the Taliban were in power. Along with ecstasy and the more potent crystal methamphetamine, known as ice, Australians had an insatiable desire for supercharged stimulants. And they were prepared to pay among the highest prices in the world for them.

  Within a decade of the widespread availability of amphetamines, Australia recorded the highest levels of dependency on the drug, which was associated with psychotic behaviour.19 Amphetamine use was widespread in the community; its euphoric effects attracting sex workers, students and long-haul truck drivers, along with recreational users such as nightclubbers.20 According to the National Drug and Alcohol Research Centre, 500 000 Australians used amphetamines in 2005.21

  Quantities of the drug were imported from Asia, while local manufacturers got in on the act as well. The local market was dominated by three syndicates, run by Carl Williams, Tony Mokbel and the Moran family.

  Mark and Jason Moran were the sons of Lewis, the patriarch of a family that ‘lived and died by the sword in Melbourne’s gangland war’.22 A violent man, Lewis Moran was associated with the notorious Painters and Dockers Union in the late 1960s, which was at the centre of a bloody battle for control of Melbourne’s criminal underworld. Although trafficking commercial quantities of hashish, amphetamines and ecstasy, the Morans lived a middle-class lifestyle. The Moran boys eventually took the reins of their father’s drug trade, and throughout the 1990s they became key suppliers of amphetamines.23

  Working for them was a young Carl Williams, a high school dropout and small-time house burglar who aspired to notoriety. When he began his own manufacture of the drug – and, worse, undercut the Morans on price – Williams found himself at the mercy of the brothers. One night in October 1999, Jason pulled a gun and shot Carl in the stomach in a public park. He’d baulked at the urgings of his brother to unleash a fatal bullet on Williams. Nevertheless, this was the shot that started the gangland war. Each murder set the scene for the next. In the midst of the carnage, Williams held press conferences in which he referred to himself as ‘the Premier’ because ‘I run the state’.24