Crown ‘needs remediation plan’ before Barangaroo casino opening, NSW Inquiry told

Crown should not hold a NSW casino licence before an external review and remediation plan is completed, Commissioner Bergin has heard.

Crown Resorts is still planning to open its casino at Barangaroo on December 14. Picture: NCA NewsWire / Steven Saphore

A detailed independent report is needed into Crown Resorts before it can be considered as a suitable party to hold a casino licence in NSW, counsel assisting the inquiry into the casino has argued.

In closing submissions to the inquiry, counsel assisting Naomi Sharp SC said on Monday that there was evidence before the inquiry to show that Crown had a culture that was “dysfunctional”, showed an “arrogant indifference to regulatory and compliance risk” and had “prioritised the pursuit of profit above all else”.

She said the company had also shown it had a “culture of denial and unwillingness to address past failings”.

Counsel assisting the inquiry are arguing that Crown is not suitable to hold a casino licence in NSW.

It comes as the company is still planning to open its casino at Barangaroo on December 14 despite the fact that the inquiry is not due to complete its report until February 1.

In her closing submission, Ms Sharp said the inquiry had shown that Crown had “fundamental problems” in terms of risk management, governance and culture that shaped the way the company set about achieving its objectives.

She said Crown had not conducted any “comprehensive review or root cause analysis” to ascertain the reasons for the failures that had been identified by the inquiry.

“Without that, we submit there can be no confidence that the causes of the failures that have been identified have been addressed,” she said.

Ms Sharp said problems had included the events that led to the arrest of staff in China, ongoing suspicious transactions that could amount to money laundering, its relationship with junket operators that were run by people of questionable repute, and the sale of a shareholding in the company to Macau casino operator Melco that gave rise to a breach of Crown’s casino regulatory agreement in NSW. She said Crown’s management of its relationship with its controlling shareholder, James Packer, had had a ­“deleterious effect on Crown ­Resorts’ corporate governance structures”.

She said the Crown board had failed to show “active stewardship” and to challenge management where necessary.

Ms Sharp said measures proposed by Crown to the inquiry to improve its practices and corporate governance “remained inadequate” as its problems were a result of fundamental problems of its risk management, governance and culture.

She said an independent inquiry by an external expert ­approved by the Independent ­Liquor and Gaming Authority of NSW was needed that covered areas of governance and risk management, the independence of directors, the management of its relationship with its major shareholder (Mr Packer), reporting lines within the company, its due diligence in dealing with third parties and other issues of culture, values and financial incentives and bonuses. She said the independent inquiry should also review the issue of Crown’s future engagement with the casino regulator in NSW and other law enforcement agencies.

The review should include a “detailed retrospective into the circumstances that gave rise to the arrest of employees in China (in 2016), the role of particular individuals and how reporting lines within Crown became so significantly compromised”.

Crown needed to develop a plan in conjunction with the independent expert to remediate its internal problems with specific outcomes and milestone dates for their achievement as well as plans for the reporting of any future shortcomings in compliance to regulators.

Ms Sharp said Crown Resorts would not be able to be considered suitable to hold a casino ­licence in NSW until the review had occurred, its board had ­accepted its findings and implemented a detailed remediation plan.

“Until such review and remediation have demonstrably occurred to the satisfaction of the authority it will not be possible to find that either the licensee or Crown Resorts are suitable in the sense required by the NSW ­Casino Control Act,” Ms Sharp said.