NSW gaming inquiry: James Packer prepared to wind back Crown control

James Packer has signalled he is prepared to wind back ties to Crown Resorts in the wake of the devastating evidence at the public inquiry into the company.

James Packer over his three days of evidence at the NSW gaming inquiry into Crown Resorts.

James Packer has signalled he is prepared to wind back his ties to Crown Resorts in the wake of the devastating evidence presented before a public inquiry into the company, ruling out serving on the board again and acknowledging that caps may be put on his shareholding.

In an extraordinary acknowledgment at the conclusion of three days of giving evidence via video link from his $200m superyacht, Mr Packer also admitted he would be prepared to scrap a special deal that has given him access to Crown’s confidential information since he resigned as director in 2018.

“This has been a terribly painful and terribly shocking experience for the board as it has been for me. I won’t be going on the board again,” Mr Packer said. “I think the board will be more independent than it was in the past.”

The inquiry’s commissioner, Patricia Bergin, has expressed concern about the degree of control exercised by Mr Packer over Crown given that his private company, Consolidated Press Holdings, holds a shareholding of only 36 per cent following last year’s sale of shares to Melco Resorts, which were subsequently sold to private equity giant Blackstone.

A string of emails presented to the inquiry on Wednesday and on Thursday morning revealed the extent of the information being provided to Mr Packer by Crown executives and directors over the past 2½ years.

Ms Bergin said: “Having a structure like this may create dangers, at least as far as perceptions are concerned.”

Mr Packer finished giving evidence on Thursday after three days of questioning. The NSW ­casino inquiry continues on Friday with directors Harold Mitchell and Andrew Demetriou scheduled to appear.

On Thursday, emails presented to the inquiry also detailed how much Mr Packer had been kept informed by his so-called personal assistant Ishan Ratnam about the company’s dealings with controversial junket operators in the years he was on the board and then when he was off it.

He admitted he was one of the key driving forces in bringing Macau junket operators to Australia, but said he did “not and have never had intimate relationships” with them.

“And I had nothing to do with the management and running of those relationships,’’ he said, claiming he had been “assured they were junkets of good repute”.

Mr Packer also denied he had any knowledge of the alleged ­organised crime links of some of the operators Crown dealt with — notably the controversial Suncity junket — but admitted he had been on notice of the allegations for many years.

He also agreed that when he was executive chairman of Crown until mid-2016 the board set no guidance with respect to its risk appetite for junkets and admitted he had not turned his mind to the threat of money-laundering risks of junkets.

Confronted with a 2020 paper presented to the Crown board stating that its international VIP team had run on an aggressive sales culture with a higher risk appetite than the rest of the business, Mr Packer said he accepted “some” responsibility for the culture.

He agreed with Ms Bergin that the proper licensing of junket operators, as takes place in Queensland, would help the ­nation’s casino operators keep organised crime out of their ­facilities.

“I don’t see how it could hurt. Casino operators and the government, regulators, Austrac all need to be working more closely together. So it is not the casino operator having to make the probity decision with only having half the information,’’ Mr Packer said.

Asked to explain his interest in expanding Crown’s dependence on VIP high-rollers at its new Sydney casino given the company’s previous issues with junkets, he noted the international VIP business was budgeted to be just 33 per cent of the earnings from the complex.

“It is highly doubtful that we are going to go anywhere hitting our original budgets for that segment of the business,” he said.

Earlier, Mr Packer supported the comments of Crown directors and executives who have ­appeared before the inquiry that parts of a bombshell advertisement released to the ASX last year responding to sensational media allegations against the company were incorrect.

But asked if the advertisement reflected poorly on the judgment of the directors who signed it, Mr Packer replied: “Not at the time, if the directors had been given incorrect information,” he said, before acknowledging: “With the benefit of hindsight I accept it reflects poorly.”

The inquiry will report back to the Independent Liquor and Gaming Authority by February 1 on whether Crown is a “suitable person” to hold the licence for its Barangaroo casino in Sydney.

If it finds Crown is unsuitable, Ms Bergin will report on what changes would be required to make it suitable.

However, under the terms of the licence Crown signed in 2014, it is entitled to claim compensation worth 10½ times the estimated negative financial impact from any government action that has a material negative ­impact on its “assets, liabilities, properties … operating results, operations, reputation or prospects”.

The government also cannot amend the licence without the agreement of Crown.

“When it comes to tax rates and levies to the government, I agree that is the way the contract is written. I am aware about some disputes about some proposals. I think at the end of the day they will be resolved commercially,’’ said Mr Packer when asked about the terms of the agreement.

“It is designed because historically when times get tough, one of the first things governments do is raise tax rates on ­casinos. The casino business is very different to the pubs and clubs (because of their big capital investments). If you don’t have surety about your income streams, that makes it difficult to make long-term investments.”

But Crown is not entitled to compensation if ILGA terminates its casino licence outright on “disciplinary” grounds, which can include finding that Crown is unsuitable or that it or a company representative breached the casino act or its casino ­licence.

Mr Packer admitted on Thursday that he gave no thought to the NSW gambling regulator’s ban on Crown dealing with any companies related to the late Hong Kong casino magnate Stanley Ho before he agreed to sell a 19.9 per cent shareholding in Crown in May last year to Ho’s son Lawrence Ho’s Melco Resorts group.

British Virgin Islands company Great Respect, with links to Stanley Ho, is on the secret “banned” list contained in the ­licence agreement for Crown’s Sydney casino.

Great Respect is Melco International’s largest shareholder, which in turn holds a 20 per cent interest in Melco Resorts, which bought the Crown shares.