Crown stresses Packer influence removal, board purge as redemption ‘landmarks’

The pointy end of Crown’s WA royal commission has kicked off, hearing the removal of James Packer’s influence was a ‘landmark’.

There was a “trend of gradual relaxation” regulating Crown’s Perth casino, the West Australian royal commission has heard, while the gaming giant says the removal of James Packer’s influence and board purge were “landmark events”.

The probe and a separate royal commission in Victoria were sparked by damning findings from last year’s NSW inquiry, which uncovered evidence Crown had turned a blind eye to various forms of money laundering by high-roller Asian “junket” tours at its Perth and Melbourne venues.

Gambling is restricted in WA, with Crown the only casino, pokie machines prohibited elsewhere and cruise ships only allowed to operate on-board gaming when they are more than 12 nautical miles off the coast.

But on Monday, counsel assisting Patricia Cahill said in her opening submissions that from 2010 and perhaps earlier, there had been a “gradual but significant relaxation” of the WA Gaming and Wagering Commission’s regulation and oversight of junkets, which were “notorious” for their vulnerability to exploitation by criminal syndicates.

That included the need for the regulator to approve junket participants and came “oddly, at a time when concerns were rising rather than abating … about the risks associated with international junket operations”.

James Packer had a ‘disastrous’ influence over Crown, the NSW inquiry heard.

The second phase of the investigation, which moves onto questioning executives, with WAGWC officials quizzed during the first, will examine whether Crown advocated for this regulatory relaxation and, if so, to what extent and why?

Ms Cahill touched on “regulatory capture” whereby the relationship between the company that should be being held accountable and the regulator was inverted.

“A regulator is influenced or becomes dominated by the industry or interests it regulates,” she said.

Causes included familiarity with the operations and its employees, and there should be appropriate distance between the two entities, she said.

WAGWC’s former chief casino officer Michael Connolly stood down in February after it emerged he’d had regular fishing trips with senior Crown staff.

The department’s director general Duncan Ord has previously said Mr Connolly had declared the long-term friendships and that he stood aside merely to avoid any “perception of a conflict of interest”.

Interim findings from the first phase of the probe are expected to be tabled in parliament in August.

Crown at Burswood in Perth, where evidence of money laundering was uncovered.

The royal commission will also look at Crown Perth’s marketing response to the arrest of staff in China in 2016 that came after aggressive marketing on the mainland, where gambling is illegal.

It will also examine the adequacy of the company’s problem gambler harm minimisation system; specifically, whether it had devolved responsibility to the patron.

Crown lawyer Kananga Dharmananda said the company had been responding appropriately to sustained scrutiny.

“There has been great change and works are continuing,” Mr Dharmananda said.

“The ways of old have been set aside … Crown is committed to transforming its operations.”

He said reform would take time but was well under way.

“Cultural reform is a first order priority,” Mr Dharmananda said.

“There is a clear sense of urgency to deliver change as quickly and as reasonably as possible.”

Crown does not have a gaming licence for its new $2.2bn casino at Barangaroo, Sydney as a result of the NSW inquiry. Picture: Lisa Maree Williams/Getty Images

Mr Dharmananda said major board changes and the removal of Mr Packer’s influence over Crown – which the NSW probe heard had far exceeded the usual sway of a company’s biggest shareholder – had been “landmark events”.

The NSW inquiry found Mr Packer’s influence had been “disastrous”, as he was behind the push to secure more junkets.

“The people and the tone from the top has changed,” Mr Dharmananda said.

“Crown has proceeded to hire leaders with excellent credentials.

“There are fresh eyes on the task.”

Peter Ward, acting for former Crown director John Poynton, said there was no evidence at the NSW probe that his client – who had been a nominee on Crown’s board for Mr Packer’s Consolidated Press Holdings and reluctantly resigned in March due to “a perceived lack of independence” – had been “beholden” to the reclusive billionaire.

Shocking evidence has emerged of money laundering at Crown Melbourne. Picture: Michael Dodge/AAP

While he had a consultancy arrangement with CPH, that was to make it clear he was not an independent director, Mr Ward said.

“Nonetheless, in his conduct he acted independently,” Mr Ward said.

The lawyer also said there was “absolutely no truth” to a recent media report suggesting Mr Poynton – one of Perth’s most prominent businessman – was putting together a possible takeover bid for Crown Perth in the event the company had to sell it as a result of the royal commission.

Meanwhile, the state government has granted a lengthy extension to the probe after the commissioners cited the complexity of evidence so far, saying it needed to consider the outcome of the Victorian investigation and noting there was “uncertainty about the structure and operations of Crown group in the future”.

The final report was due by November 14 but has been pushed back to March 4, with closing statements expected by mid-December and responsive closing statements following roughly a month later.

Originally published as Crown stresses Packer influence removal, board purge as redemption ‘landmarks’