Crown Casino could be stripped of its licence by the Victorian gambling watchdog over allegations it tampered with poker machines.

Three former staff accused the James Packer-owned casino of “blanking buttons” to restrict gaming options, among a host of other allegations tabled in Federal Parliament last year by independent MP Andrew Wilkie.

The Victorian Commission for Gambling and Liquor Regulation on Monday confirmed it had “commenced disciplinary proceedings” against Crown over the alleged breach of the gambling act.

“The commission is currently considering information provided by Crown as part of these proceedings and will assess this in determining whether there are grounds for disciplinary action,” it said.

Disciplinary action could include cancellation, suspension or variation of its casino licence, a fine or letter of censure.

Crown denied it had breached regulation in a statement to the stock market on Monday.

It confirmed “blanking buttons” occurred on 17 of its 2627 machines at the Southbank, Melbourne casino, and said it was for a trial conducted over three weeks in March and April 2017.

“The commission’s view is that the trial involved varying a gaming machine type and certain games in a manner that required the commission’s prior approval,” Crown said.

“Crown Melbourne’s position is that the trial did not require prior approval, and therefore there has been no contravention of the GRA [Gaming Regulation Act].”

Mr Wilkie welcomed the development in a statement on Monday.

“Clearly the commission’s concern makes a mockery of Crown’s outright rejection of these allegations when I raised them in October,” Mr Wilkie said.

“The casino obviously has a case to answer about the blanking of buttons and I’m sure that the truth will come out when the commission finalises its enquiries.”

The investigation was already underway prior to the claims being tabled in Parliament, the commission’s spokesperson said.

Other allegations were “thoroughly investigated” but there were no grounds to take further action, according to the commission.

The three whistleblowers also alleged Crown ignored illicit drug use, domestic violence and money laundering.

The casino was also accused of forcing staff to “shave down” buttons on gaming machines so punters had space to wedge something in and hold the button in place to allow continuous play.

The practice of allowing a machine to spin without a punter pressing the button for each spin is banned under Victorian regulations.

-With ABC