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Victoria's gambling regulator and the State Government are under increasing pressure over its handling of Crown Casino after the gaming giant admitted money laundering was likely to have occurred at its Melbourne and Perth casinos.

The admission to a NSW inquiry has prompted that state's regulator to delay the opening of Crown's new multi-billion-dollar casino in Sydney.

The NSW inquiry is assessing Crown Resorts' suitability to hold a casino licence.

The revelations in Sydney about Crown's Melbourne operations have raised fresh questions over the effectiveness of the Victoria Commission for Gaming and Liquor Regulation (VCGLR) which has been approached with multiple complaints about Crown in recent years.

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and The Age have exposed allegations of money laundering, links to criminal groups and overseas junket operators.

The VCGLR has issued a show cause notice to Crown over its junket operations — in which cashed-up overseas gamblers are lured to Crown. The nation's anti-money laundering body AUSTRAC is also investigating issues at the casino.

As previously reported by the ABC, there are concerns from within the VCGLR that issues at Crown are not being taken seriously by the watchdog.

Gambling reform advocate says political donations helped Crown avoid scrutiny

Tim Costello, the chief advocate for the Alliance for Gambling Reform, said Crown's 'bombshell' admission that money laundering was likely occurring in Melbourne and Perth was 'simply extraordinary' and should be of concern to all Australians.

'It says it [Crown] has been a criminal enterprise,' he said.

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'There has been wholesale money laundering going on and Crown admitted it [on Wednesday] after effectively hiding it for most of the inquiry.

'This is quite an astonishing finding that every Australian should be shaking in their boots that this has gone on for so long.'

Mr Costello said the revelations should put the spotlight back on the VCGLR and the national corporate regulator ASIC.

He has also criticised Crown's influence over Victorian politicians on both sides of the aisle.

He said the gaming giant's ties to Spring Street accounted for why allegations of criminal activity in Melbourne's casinos had gone without consequence for so long.

'Crown has captured politics [and] the politicians are silent because it gives great donations to both sides of politics,' Mr Costello said.

'That is why it has taken a New South Wales inquiry to really expose massive laundering and criminal activity here in Melbourne.'

In 2017-18, Crown donated $35,000 to Victorian Labor and $30,000 to Victorian Liberals.

Mr Costello said he expected far-reaching organisational change at Crown with an 'embarrassed' board facing fallout from the inquiry.

'They've got to turn over most of their board. They have been utterly exposed and they have effectively just been puppets of James Packer,' he said.

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'James Packer is almost certainly going to have to sell out and hand over to someone who can pass the probity test in holding a licence.'

Crown won't have licence suspended in Melbourne

Premier Daniel Andrews said the casino would not have its licence suspended in the wake of the money laundering admission but said the regulator would make further inquiries.

He also said the Government would closely examine the final report from NSW, due early next year.

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'There is a sacred trust when it comes to these licences, and they need to be complied with,' Mr Andrews said.

The Opposition and the Greens have been critical of the VCGLR for not acting quick enough on Crown Casino.

Liberal leader Michael O'Brien said the commission was 'asleep at the wheel', while Greens MP Ellen Sandell said the Government must terminate Crown's licence.

Mr Andrews, who is former Gaming Minister, defended the work of the regulator.

'It is simply wrong in my judgement to say that they are waiting for others to do their job for them, nothing can be further from the truth.'