Crown Resorts starts on wrong foot in Victoria’s Finkelstein royal commission
Victoria’s gaming royal commission won’t cover the same ground as NSW but Crown has begun it on the wrong foot, earning an early warning.
Victoria’s $10m Royal Commission into Crown Resorts will become a test on the “veracity” of the troubled casino group’s commitment to reform, with commissioner Ray Finkelstein declaring he will not double up on Patricia Bergin’s explosive inquiry into the company.
After Ms Bergin found Crown was not suitable to hold a licence for its $2.2bn casino in Barangaroo after it facilitated organised crime and money laundering, Mr Finkelstein said it was “not in the public interest” for him to cover the same ground as the NSW inquiry.
Instead, the former federal court judge said he was more concerned with Crown’s current efforts to reform itself and how it deals with problem gamblers, rather than its controversial past, to gauge whether it was suitable to continue to hold a licence for its flagship casino in Melbourne.
While Crown’s executive chairman Helen Coonan was able to convince Ms Bergin and the chairman of the NSW casino regulator, Philip Crawford, that she could turn the casino group around, the company has not got off to the best start with Mr Finkelstein.
He has written two letters to the company, receiving only one reply to the first one he sent, and said delays in providing documentation to the committee “would not be tolerated”.
“I am concerned that unless the seriousness of the conduct is recognised, any steps taken to remedy the position will only be half-hearted,” he said.
At stake is Crown’s sprawling Melbourne casino complex, which stretches from near Docklands to deep into the city along the Yarra River, making it Victoria’s biggest single-site employer.
Meanwhile, as the state’s only casino, it contributes a significant proportion to gambling taxation, which accounts for about 12 per cent of Victoria’s total revenue.
The start of the Royal Commission came as US private equity group Blackstone lobbed an “opportunistic bid” of $8bn cash or $11.85 a share for Crown, underlying the severity of the regulatory risks the company faces.
The company is also fighting to hold on to its licence for the Burswood casino in Perth, with Western Australia also holding a Royal Commission into the company.
Mr Finkelstein said he wrote his first letter to Crown soon after his appointment, asking it whether it accepted the NSW inquiry findings. He also asked whether it accepted that “on the material before Commissioner Bergin, it was open for her to find Crown Resorts is not a suitable person to be an associate of Crown Sydney”.
“Crown’s response was a little equivocal,” Mr Finkelstein said.
“The Crown companies do not accept in terms the findings made by commissioner Bergin which I’ve already read out.
“The disagreement however may not be material, the aspect of the findings to which objections seem to be taken go to the deliberateness or wilfulness of the conduct concerned.
“On the other hand, the Crown companies do accept it was open for Commissioner Bergin to conclude that Crown Resorts is not a suitable person to be an associate of Crown Sydney.”
But Crown stressed to Mr Finkelstein that it believed it remained suitable to hold a licence in Victoria, regardless of past events, due to a “substantial reform program” now under way.
And Mr Finkelstein’s findings will hinge on the progress of that reform: “The outcome of this inquiry may well depend on the effectiveness of that program.”
To this end, Mr Finkelstein said he also wrote a letter to seek assurance that Crown was willing to undergo remediation efforts recommended by the Bergin inquiry.
“I was interested to know whether the current boards of the Crown companies were ready to accept the seriousness of the conduct which Commissioner Bergin found occurred, and, against that backdrop, take appropriate action to ensure there is no repetition of that conduct,” he said.
Mr Finkelstein said he had four other central concerns that the Royal Commission would examine.
“First, whether money laundering is still taking place at Melbourne Casino. Second, whether Crown Melbourne is in breach of other legislation or regulation which governs the conduct of its casino operations
“Third, whether Crown Melbourne is in breach of any contractual obligations under the various agreements with the states. And fourth, most importantly, the manner in which it deals with gambling addiction.”
Mr Finkelstein is due to report to the Victorian government on August 1, giving the inquiry just a few months to conduct the necessary hearings.
He asked all individuals who had received a notice to give evidence to respond within a week.
No further hearings are scheduled for this week.
Shares in Crown Resorts closed at $11.84 on Wednesday, down 0.8 per cent.
Additional reporting: Remy Varga
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