An independent inquiry has suggested that Crown Resorts isn’t fit to operate the $2.2bn Crown Sydney Hotel Resort, however, a number of recommendations, both regarding the region’s casino ecosystem and the company more specifically, could offer some potential for future progress.
Commissioned by the Independent Liquor and Gaming Authority, which is to meet to consider the report’s finding, the inquiry was led by Patricia Bergin, a former Supreme Court Judge.
The almost 800-page critique of Crown’s suitability follows allegations raised by Australia’s Nine Network, the Sydney Morning Herald, The Age and other media outlets, 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.
Highlighting “very serious problems” that have been exposed in Crown’s operations in other jurisdictions, with the group boasting casinos in Melbourne and Perth, the inquiry cites poor corporate governance, deficient risk-management structures and processes, and a poor corporate culture.
An overhaul of the company’s board is recommended, with doubts raised on three directors criticised in the report, those being Ken Barton, Michael Johnston and Andrew Demetriou.
Assessing the eligibility of the company for the Barangaroo Casino, Bergin explained: “The very serious problems of the infiltration of Crown’s subsidiaries’ accounts by organised criminals should send a shiver down the spine not only of any casino regulator but also the community generally.
“The fact that it went on for so many years in the operations of an otherwise commercially respected publicly listed company whilst it was engaging with the peak body responsible for AML/CTF enforcement demonstrates beyond any doubt the need for the establishment of a well-resourced and very powerful casino regulator in New South Wales.”
Adding: “Any applicant for a casino license with the attributes of Crown’s stark realities of facilitating money laundering, exposing staff to the risk of detention in a foreign jurisdiction and pursuing commercial relationships with individuals with connections to triads and organised crime groups would not be confident of a positive outcome.
“It is obvious that such attributes would render an applicant quite unsuitable to hold a casino license in New South Wales.”
It is recommended that Casino Control Act be amended to prohibit casino operators in New South Wales from dealing with Junket operators
Backing is also given to the establishment of an Independent Casino Commission, an independent, dedicated, stand-alone, specialist casino regulator with the necessary framework to meet the extant and emerging risks for gaming and casinos.
Furthermore, among the numerous recommendations detailed in the report is that a person may not acquire, hold or transfer an interest of 10 per cent or more in a licensee of a casino in New South Wales or any holding company of a licensee without the prior approval of the ICC. This could force major shareholder James Packer to reduce his 36 per cent stake.
Crown, which halted ASX trading prior to the publication of the report, says that it “will work with the New South Wales Independent Liquor and Gaming Authority in relation to the findings and recommendations of the inquiry report as contemplated by the regulatory agreements between Crown, ILGA and the state of New South Wales.”