I let Crown keep its casino licence. Let me explain why

The story of Crown casino is one of profit, power and privilege. It is also a tale of extraordinary abuse of privilege.

The millions of people who entered the doors of the Melbourne casino since it opened in 1994 had every right to expect an environment in which gambling was safe, criminal influence was not allowed to flourish and gamblers were not exploited rapaciously.

Victorian Gambling and Casino Control Commission chair Fran Thorn announces that Crown will keep its licence.Credit: AAP

To expect that the conditions of its licence would be met and the conditions of its social licence to operate would be honoured. To expect that Crown would behave in a way that met the suitability test of its licence.

It did not.

Crown breached its legal, social and moral obligations, resulting in illegal activities, tax avoidance, money laundering, criminal associations and significant harm to vulnerable community members.

This led to the royal commission finding Crown was unsuitable to hold a casino licence, the appointment of a special manager to oversee its remediation, and ultimately a decision by the Victorian Gambling and Casino Control Commission (VGCCC) on whether Crown Melbourne is suitable to continue to hold a casino licence.

The royal commission report outlined Crown’s failures. At their heart was broken governance, the absence of appropriate standards of risk management and regulatory compliance, and a culture that prioritised profit over the wellbeing of customers.

Despite the enormity of its findings, the royal commission recommended Crown be permitted to continue operating under stringent independent oversight, finding immediate cancellation of the licence was not in the interests of the Victorian community and the state’s economy, and determining Crown had the will and capacity to transform itself to again become suitable for the licence – which would be to Victoria’s benefit.

For the past two years, Crown Melbourne has probably been the most closely scrutinised casino in the world.

The government appointed a special manager with unprecedented powers of control over Crown’s board and organisation, with a mandate to report on the remediation of the failures unearthed by the royal commission.

A new regulator, the VGCCC, was focused solely on the gambling industry, with enhanced powers regarding the Melbourne casino. The maximum penalty it could impose on Crown was increased from $1 million to $100 million, finally ensuring punishment could be appropriately fitted to the level of wrongdoing.

Ahead of the suitability decision, the commission began redressing the wrongdoings unearthed by the royal commission. This resulted in five different disciplinary actions, with fines totalling $250 million, and directions to Crown to institute significant harm-minimisation initiatives and improve their approach to money laundering, financial crime, and illegal practices.

We built a casino division and regulatory oversight regime that enabled confidence that the casino would be held appropriately and stringently to account in the longer term.

Importantly, we also undertook what became known as the “Plan B project”, preparing for the potential loss of licence to operate. Crown Melbourne had never been required to put in place a workable transition-out plan that ensured the business would continue in the event of a loss of licence.

The commission worked with government to ensure legislative amendments to the Casino Control Act to improve the statutory manager regime, requiring Crown to continue to provide any shared services to the casino under manager control and vesting all casino assets in the manager if Crown were to go into administration or liquidation.

We are determined to ensure that Crown is not and will never be “too big to fail”. These arrangements are enduring and can be activated now or in the future if any casino operator fails to deliver on its obligations.

Ultimately, the commission considered the issues identified by the royal commission have been comprehensively addressed, and is satisfied that the systemic failings of Crown Melbourne are a thing of the past.

The commission made its own, independent determination based on three key considerations. The first being the special manager’s findings that Crown Melbourne has addressed the systemic failings identified by the royal commission.

Secondly, our own work with Crown Melbourne, substantiating that suitability requirements have been met. During our investigations, we observed a different Crown emerging with a clear understanding of the privilege and obligations of holding the licence.

And lastly, Crown’s recognition that it needed a comprehensive transformation plan, against which it would be held accountable.

The royal commission indicated that it expected Crown Melbourne to fully transform from the sorry corporate object it had become to a world-standard example of excellent practice in the delivery of casino services.

The recognition by Crown that its transformation is not yet complete is a real signal of a new Crown Melbourne and its likelihood of continuing to deserve the privilege of holding a casino licence.

Victorians are entitled to have confidence that the Crown Melbourne casino is being run honestly and free from criminal influence and exploitation. In return for the privilege of an exclusive licence, Victorians have a right to expect that Crown Melbourne will never again prioritise profit ahead of the safety and wellbeing of its patrons and staff.

The community may be assured that the Commission will not hesitate to act if the privilege of holding the casino licence is again abused.

Fran Thorn is chair of the Victorian Gambling and Casino Control Commission.

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