Crown Resorts says it made ‘honest mistakes’ and ‘we’ve changed’

Crown Resorts says ‘honest mistakes’ landed the company in hot water but have no bearing on its suitability to operate Sydney’s Barangaroo Casino.

Crown Sydney casino and hotel at Barangaroo. Picture: NCA NewsWire / Steven Saphore

Crown Resorts is a changed company, suitable to operate the Sydney Barangaroo Casino because its board has taken action to address “shortcomings and failures” caused by “honest mistakes by management”, the James Packer-backed casino giant has told the public inquiry into the company.

In the first day of his submissions to the NSW Independent Liquor and Gaming Authority’s inquiry into Crown’s suitability to retain its Sydney casino licence, Neil Young QC claimed the assertions made by counsels assisting the inquiry had not properly addressed the terms of reference and instead had tailored arguments to address allegations raised by the media.

He claimed this held Crown to “an exceptional and unprecedented standard not applicable to any other casino operator in Australia or overseas”.

A special meeting of ILGA on Wednesday will consider whether the Sydney casino should be allowed to open as scheduled on December 14.

Mr Young claimed historical failures such as the arrest of 19 Crown staff in China in 2016 for illegally promoting gambling did not occur due to dishonest behaviour.

“There is no basis in the evidence to find that Crown Resorts or any of its officers acted dishonestly or with a lack of integrity,” Mr Young said.

But he did concede that the arrest of staff in China was largely attributable to a small group of senior management who effectively determined the company’s Chinese risk operations, which should have been the responsibility of the board.

Neil Young QC. Picture: Getty Images

“Risk management structures and processes were not utilised or engaged. That means that important developments in the operating environment in China were not escalated to any risk management committee,” he said.

“The failure to escalate those developments meant that a small group of individuals in senior management made the decisions on how to respond to developments on the ground in China.”

He also acknowledged the creation of a “VIP Working Group” with representatives from Mr Packer’s private company Consolidated Press Holdings, including Crown director Michael Johnston, did have an “indirect impact” on the way in which then Australian Resorts chief Barry Felstead reported certain matters about Crown’s China operations.

But Mr Young claimed it was not a “fully fledged” reporting line, that Mr Felstead still reported to then Crown CEO Rowen Craigie and that the role of Mr Johnston in the group had been overstated.

Mr Young said Mr Craigie, Mr Felstead and former Crown VIP boss Jason O’Connor, who was one of the 19 Crown staff jailed, were operating honestly, based on a “Western perspective” of Chinese law and legal advice that was ultimately inadequate.

“All those matters do not go to suitability in any relevant sense — they do not go to current suitability. The events in China occurred more than four years ago,” Mr Young said.

The inquiry previously heard that Crown management established a covert office in a residential area and examined the possibility of obtaining foreign work visas for their staff based on external legal advice obtained from Crown’s former president of international marketing, Michael Chen.

But this legal advice was never disseminated to Crown’s internal legal team or to the Crown board — a structural failure that has since been rectified, Mr Young said.

He said all external legal advice for jurisdictions outside Australia was now retained and managed by Crown’s internal legal team and that Crown had improved its internal systems for the retention of external legal advice.

Inquiry commissioner Patricia Bergin mentioned an email Mr Chen sent to Australian resorts boss Barry Felstead in 2015 where Mr Chen said Crown’s staff in China “lived in fear” of being “tapped on the shoulder”.

But Mr Young said these comments were made in the context of Crown “engaging in lawful activities in the sensitive area of associating with gambling”.

“China is the place it is. There is always the risk of a proverbial knock on the door,” he said.

Mr Young will conclude his submissions later this week by outlining further changes being made by Crown.

Crown shares closed 17c higher at $9.55.