Crown facing public inquiry led by former Supreme Court judge Patricia Bergin

‘Character, honesty and integrity’ of James Packer’s casino empire under the microscope in public inquiry.

Melco’s Lawrence Ho and major Crown shareholder James Packer. Picture: Bloomberg.

The James Packer-backed casino group Crown Resorts will be forced to face a public probity test as its credentials as being “suitable” to hold a casino licence are questioned.

The NSW Independent Liquor and Gaming Authority has published its terms of reference for an inquiry into the licence it granted Crown Resorts in 2014 for its Barangaroo casino in Sydney.

The regulator announced earlier this month that following a series of media reports linking Crown Resorts to criminal activity, it would hold a public inquiry with royal commission powers into the casino company and “its close associates”.

The inquiry, to be led by former NSW Supreme Court judge Patricia Bergin, SC, will focus on three areas, including a review of Crown’s suitability to hold the casino licence on the back of allegations of links to Asian crime gangs and money laundering.

Crown Resorts has denied the allegations and said it was considering the terms of reference and would co-operate with the inquiry.

The ILGA said in its terms of reference that the primary objective of the state’s Casino Control Act was to ensure that the management and operation of a casino remained free from criminal influence or exploitation.

The regulator said the inquiry would examine a deal between Mr Packer’s private investment vehicle, Consolidated Press Holdings, to sell a 19.9 per cent stake in Crown to Macau-based Melco Entertainment and Resorts.

Melco was planning to spend about $1.76 billion buying the 19.9 per cent stake, which would leave Mr Packer with a 26 per cent interest in Crown.

The deal was to be done in two tranches, with the second tranche sold to Melco by September 30. But Melco announced on Wednesday night that with the advent of the NSW probe it would not pursue the second tranche within that time frame, and would wait until 2020, when it expected the inquiry to be complete.

The terms of reference noted that the regulator had the authority to inquire into the suitability of persons becoming close associates of Crown. It can also examine whether such persons had any business association with “any person, body or association who is not of good repute, having regard to character, honesty, and integrity”.

Questions have been raised about Melco chairman Lawrence Ho’s father Stanley Ho and whether the two had any business connections.

Crown’s licence for its Sydney casino banned any material deals between Crown and Stanley Ho or his associates. Stanley Ho has faced allegations of links to organised crime. He has denied those allegations.

The inquiry will also examine if the share deal with Melco constituted a breach of the Barangaroo restricted gaming licence or any other regulatory agreement.

The regulatory framework and settings that determines the ILGA’s ability to respond to the growing complexity of risks for gaming and casinos would also form part of the inquiry.

The terms of reference state Ms Bergin will be required to identify recommendations in order to enhance the authority’s future capability, having regard to the changing operating environment.

The ILGA said a timetable for public submissions and hearings was being considered by the inquiry.