Crown Resorts could face VCGLR legal action over slow document production

Crown Resorts could potentially be held in contempt of court for withholding crucial documents requested by the Victorian regulator under law.

Commissioner Ray Finkelstein, left, at an early hearing of the inquiry into Melbourne’s Crown casino. Picture: AAP

Crown Resorts could potentially be held in contempt of court for withholding crucial documents, requested by the Victorian regulator under law, in relation to an investigation into the arrest of staff in China while senior employees of the company may have lied about their knowledge of the situation, a royal commission has heard.

Appearing as the first witness into the commission into the suitability of Crown Resorts to operate its Melbourne casino on Monday, Victorian Commission for Gambling and Liquor Regulation employee Timothy Bryant said Crown’s “unsatisfactory” compliance with document requests dragged out an investigation into the 2016 arrests for years.

“It seemed every time we were close to completing reports in relation to the investigation, subsequent material would be provided,” Mr Bryant said.

The regulator launched the review into the arrest of 19 Crown staff in China for allegedly illegally promoting gambling to Chinese citizens in 2017, the same year a class action was launched against the James Packer backed company over the issue.

Mr Bryant said the completion of the review – only now released by the commission – was pushed until this year back by new documents periodically released by Crown, as well as evidence provided to the NSW Bergin Inquiry last year that ultimately deemed the company not currently suitable to operate its Sydney Casino.

The VCGLR began the review process in October of 2017 by informally requesting documents but when this produced little response from Crown, Mr Bryant began issuing formal notices under Section 26 of the state’s Casino Control Act.

However, the document presentation was still “piecemeal,” he said, with Crown presenting new information and claiming it was only discovered in preparation for the class action.

Mr Bryant subsequently prepared a memo in April 2018 for the regulator’s “legal services area”, stating that Crown had committed a breach.

But when asked if the regulator pursued the potential breach via the Supreme Court, Mr Bryant said he was not aware of the VCGLR launching such action.

He acknowledged that such an action could result in a finding of contempt against Crown.

“I did not want to get drawn into a cul-de-sac focusing on that when the main issue was to keep progressing with the investigation,” Mr Bryant said, before adding the regulator may now be considering legal action now the investigation is complete.

“I think now, where the stage the investigation is at, it is something that the commission would be considering as part of our final report and final outcomes,” Mr Bryant said.

Another factor constraining the release of the review was the growing discrepancies between what executives at Crown told Mr Bryant their knowledge of a Chinese crackdown on foreign gambling companies was and what they appeared to have actually known, according to slow trickle of documents obtained from Crown and the evidence unearthed at the Bergin inquiry.

Mr Bryant initially classified the information gleaned from these interviews as “not particularly fulsome” but admitted he could have been lied to when pressed by Commissioner Raymond Finkelstein.

“I suppose I was giving Crown, when conducting interviews, the benefit of the doubt at the time to give their position,” Mr Bryant said.

“In hindsight though, I’d certainly consider that at times they lied to me in interviews with what they were aware of and what they weren’t aware of.”

Mr Bryant said former Crown legal officer Joshua Preston gave a presentation to the regulator about the arrests in November of 2017, and conveyed it had received professional advice from risk management firm Mintz about a Chinese crackdown on gamblers, not casino companies.

He also said former Australian Resorts CEO Barry Felstead told the regulator that a Crown employee questioned by Chinese police in 2015 was probed about a customer of Crown.

But documents Mr Bryant subsequently received from Crown showed that Mintz advised the company about a crackdown on foreign gambling companies as far back as 2015 while Mr Felstead knew the questioning of the employee “related to allegations the employee was organising gambling tours, not about a customer.”

Additionally, former International VIP Gaming chief Jason O’Connor told the regulator in 2018 that he understood the crackdown was related to corruption, Mr Bryant said, despite receiving an email from former international marketing head Michael Chen containing a news article on the push against foreign casinos as far back as 2015.

Despite showing Crown draft reports that indicated the China arrests occurred due to a breakdown in the company’s risk management framework – the same conclusion reached by the Bergin inquiry – Mr Bryant said Crown maintained an “aggressive” position that their approach to risk management was “robust” until 2019.

Adrian Finanzio SC at the Royal Commission into the Casino Operator and Licence in Melbourne.

The Victorian royal commission comes as a WA royal commission examining Crown’s Perth casino licence continues to hear evidence from employees of the state’s gaming and wagering commission.

Both commissions have made clear they expect co-operation from Crown’s lawyers, but earlier on Monday Victorian Counsel Assisting Adrian Finanzio SC said Crown had dropped thousands of documents on his lap just days before the hearing.

“Disconcertingly, last Friday night approximately 13,000 documents were produced by Crown in response to some notices issued as long ago as March,” he said.

Mr Finanzio also said that information sought on many reform efforts made by Crown Resorts in the wake of the NSW Bergin Inquiry – like an agreement preventing Mr Packer from exercising his shareholder power – had not been provided.

“These are matters about which we have read in the newspapers but we have sought details of the arrangements,” he said.

The Victorian commission will resume on Tuesday to hear evidence from VCGLR employee Jason Cremona.

Additional reporting: Jared Lynch