Crown Resorts ‘unnecessarily belligerent’ to Victorian regulator’s probe

Crown shifted from ‘purported overt attempts at helpfulness’ to ‘belligerence’ during the Victorian regulator’s probe into the arrests of 19 staff in China.

Victorian gaming regulator finished its report into the Crown arrests this year. Picture: AAP

Crown Resorts became “unnecessarily belligerent” and “failed to have due regard to its position of privilege” in Victoria during an investigation from the state’s gaming regulator into the arrests of the casino giant’s staff in China.

Crown — which is now the subject of two royal commissions in Victoria and Western Australia after NSW’s Bergin inquiry found it unsuitable to hold a licence at Barangaroo — also gave “contradictory” evidence “protracting” the investigation.

The Victorian Commission for Gambling and Liquor Regulation (VCGLR) completed its report this year into the arrests of 19 Crown staff in China, which happened in 2016.

The report – which previously had not been released – was tabled as part of the Raymond Finkelstein Victorian royal commission into Crown which resumed on Monday.

The report was completed after Bergin inquiry and two years after the VCGLR recommended to the Victorian government that Crown retain its position as the state’s sole casino operator.

VCGLR, which received $38.5m in government funding last year, recommended that Crown keep its licence despite not finishing its report into the China arrests, which painted a damning picture of the casino group.

The report stated that Crown “failed to have due regard to its position of privilege” as Victoria’s sole casino licence holder and its “accepted failings do not go far enough”.

“It is only by reason of the existence of the casino licence that Crown can derive a commercial benefit from gambling operations in the state of Victoria,” the report said.

“In the Commission’s opinion, Crown’s response to the Commission’s investigation of this matter has failed to have due regard to its position of privilege.

“In particular, the Commission is concerned that, rather than adopting a collaborative approach whereby Crown might have actively assisted the Commission to understand the matters that are the subject of this report, Crown’s approach has been both changeable and, at times, unnecessarily belligerent.”

A view of Crown Sydney is seen at Barangaroo. Picture: Getty Images

VCGLR said its investigation into the China arrests was split into two phases, with Crown shifting from “purported overt attempts at helpfulness” to “belligerence”.

“One example of that belligerence was the way the Commission was left to rely upon its compulsory evidence-gathering powers to gather documentary evidence with a view to obtaining a proper understanding of what had occurred in China.

“Another consequence of this belligerence was that the Commission was forced to seek information from third parties including other casino operators, casino regulators and government agencies, such as the Commonwealth Department of Foreign Affairs and Trade, with a view to understanding the events that had occurred in China.”

And when Crown responded to the VCGLR’s compulsory powers “there were several instances when the Commission was inundated with an enormous volume of documents and left to sift through those documents with little or no guidance or assistance” from the casino group.

“There is little doubt that if Crown had co-operated fully with the Commission in this investigation in a manner that is appropriate for the sole holder of a casino licence in the state of Victoria, this investigation might have been significantly expedited.”

The report found that Crown’s accepted failings “do not go far enough”, particularly after it was revealed that its then president of international marketing Michael Chen was the “person to whom issues of risk management were almost exclusively left in China”, while he “never saw” Crown Resorts’ risk management policy during the time he was employed by Crown.

“Crown’s risk management procedures were deficient to the extent that they provided for no specific consideration of Crown‘s business operations in China.

“Matters relevant to the operating environment in China were never considered as part of Crown’s risk management structures or by the boards of either Crown Melbourne or Crown Resorts, before Crown’s staff were arrested in October 2016.”

Both Labor and Liberal governments have overseen Crown’s operations in Melbourne, which is Victoria’s biggest single site employee, almost taking up the entire southern flank of the city grid.

Despite VCGLR criticising the casino group in its report into the China arrests, it raised no red flags during its report to government in June 2018, which recommended the company keep its licence in Victoria. This was two years before the NSW inquiry found the James Packer-backed company facilitated money laundering at its flagship Melbourne casino.

“No matters have emerged which would reflect negatively on Crown Melbourne or its associates having regard to honesty, integrity or financial matters,” VCGLR said in its 2018 review.

“The overall conclusion is that Crown Melbourne remains a suitable person to hold a casino licence.”