Crown to keep hold of Melbourne licence despite ‘dishonest’ conduct

Crown

Crown Resorts is to retain its Melbourne casino licence, despite a royal commission deeming the group to be “unsuitable” on the basis that it engaged in “illegal, dishonest, unethical and exploitative” conduct.

Raymond Finkelstein, the commissioner who led the investigation, addressed “disgraceful” conduct dating back many years, adding that it is “difficult to grade the seriousness of the misconduct” as well as that “the catalogue of wrongdoing is alarming”.

However, despite this, one of a slew of recommendations includes not striping the casino operator of its licence as “immediate cancellation of the licence is not in the interests of the Victorian community”.

This, the report says, would cause a risk of “significant harm” to the region’s economy, with the Commission also believing that Crown Melbourne “has the will and the capacity to reform itself so that it again becomes a suitable person to hold a casino licence”.

It has instead suggested, in one of 33 recommendations, that a special manager be appointed to oversee the company’s reform agenda, with the individual in question to operate the post for a two year period.

Following the time frame, the onus “will be on Crown to clearly demonstrate through its operations and the progress on its reforms why its licence should not be cancelled,” with cancellation to ensue unless that regulator is satisfied of the firm’s suitability.

Furthermore the report also finds that Crown “facilitated money laundering” through a subsidiary’s bank account, as well as failing “to investigate warnings about potential money laundering through that account over many years”.

Finkelstein adds that evidence of unpaid tax was also found, stating that “more is likely due” than the A$61.5m in back taxes and interest already paid, with executives also doing “nothing” despite being warned of a crackdown of the illegal promotion of gambling in Australia to Chinese residents.

“Despite knowing that staff who worked in Indonesia, Malaysia, Taiwan and Singapore were also likely contravening their local laws, Crown let them carry out promotional activities as the chance of them being charged was not significant,” the report stated. “To have done so after the China arrests is nothing short of appalling.”

The operation of junkets, which Crown has already ceased, is recommended to be banned, with the state government to also increase the maximum possible penalty under the Casino Control Act 1991 from A$1m to A$100m. The royal commission had indicated that an increase should be made to “at least” A$10m.

Further Finkelstein findings include “consistent patterns of noncooperation with the regulator,” including bullying, providing it with false or misleading information, delaying the investigatory process and frustrating the regulator’s investigations.

A limit of shareholding to enable no person to have or acquire a relevant interest of five per cent of more is also suggested, with James Packer, through CPH Holding’s 37 per cent Crown stake, being “responsible for much” of the enterprise and retaining “significant control over Crown affairs, even after his resignation as chair of the board and as a director”.

Serious, systemic breaches of responsible gambling obligation were also discovered, an issue which Finkelstein called “perhaps the most damning discovery by the Commission”.

This includes the way in which the company is said to have dealt “with the many vulnerable people who experience gambling harm”.

The Victoria state government says that it supports the recommendations “in principle,” subject to further detailed analysis and consultation being undertaken. 

Crown commented that it is currently undertaking its own review of the report and the Victorian government’s response, but “will work cooperatively and constructively” in relation to the findings and recommendations.

The launch of a royal commission came after a scathing report in New South Wales, commissioned by the ILGA and led by former supreme Court judge Patricia Bergin, found that the company isn’t fit to operate the $2.2bn Crown Sydney Hotel Resort.

The almost 800-page critique of Crown’s suitability, which itself followed allegations raised by Australia’s Nine Network, the Sydney Morning Herald, The Age and other media outlets, alleged that Crown, or its agents, affiliates or subsidiaries, engaged in money-laundering; breached gambling laws; and partnered with junket operators with links to drug traffickers, money launderers, human traffickers, and organised crime groups. 

A short time after Victoria initiated its investigation, Western Australia upgraded its own inquiry to a royal commission, which it said will also look at the state’s regulatory framework, including any actual or perceived conflicts of interest by officers involved in casino regulation, and any matters that might enhance the Gaming and Wagering Commission’s future capability and effectiveness.