NSW to examine evidence and extension of Victorian royal commission into Crown

NSW regulators will consider new evidence and the reasons behind Victoria’s extension of its royal commission into Crown.

The Crown casino and hotel complex towers over Sydney. Picture: Nikki Short

New evidence heard by the Victorian royal commission into Crown Resorts and its extension by the state government could damage the casino group’s plan to open its Sydney casino by the end of the year.

The board of the NSW Independent Liquor and Gaming Authority will meet next week and examine the reasons behind a two-month extension of the timeline of the Victorian royal commission into Crown Resorts, announced on Friday.

The determinations of the meeting will have serious implications for the James Packer-backed company’s hopes of receiving regulator approval to open the gaming floor at its $2.2bn Sydney casino resort by October, while the extension of the Victorian commission’s timeline has also cast a shadow over its future operation of Crown Melbourne.

Crown is also facing a royal commission in Western Australia, threatening the licence of its Perth casino.

On Friday, the Victorian government announced it would extend the reporting date and the budget of its commission from August 1 to October 15 following a request from commissioner Ray Finkelstein.

Commissioner Ray Finkelstein wants longer to examine the evidence about Crown’s casino in Melbourne.

In a statement Minister for Consumer Affairs, Gaming and Liquor Regulation Melissa Horne said it was due to the gravity of the evidence presented since the probe kicked off last month.

“The evidence we have seen coming out of the royal commission to date is significant – we’ll provide the commissioner with the resources and time required to complete this important work as requested,” she said.

Among the evidence presented were indications Crown may have underpaid the state gaming tax by hundreds of millions over years, that it allowed patrons heavily indebted to the casino to continue gambling, and that it at times failed to adhere to state gaming law or its own responsible gaming code of conduct.

Acting Victorian Premier James Merlino said the evidence would be able to be properly considered within the new timeline.

“We established this royal commission to get the answers we need about Crown – and this extension will ensure the scope of evidence provided so far is able to be thoroughly considered,” he said.

The news hit Crown’s share price on Friday, which closed at $12.22, down 1.45 per cent.

It means the company’s share price has declined more than 7 per cent since the Victorian commission commenced witness hearings.

Shareholders have been split on whether the Crown board should fight through its regulatory issues or begin seriously considering takeover offers.

Crown chair Helen Coonan has overseen cultural changes at the casino operator, as it strives for approval to open its Sydney gaming floor. Picture: Adam Yip

Crown executive chairman Helen Coonan has indicated she prefers the former, taking two months to reject a $8.4bn takeover bid from US private equity player Blackstone, with the board only formally engaging on a few occasions.

A $12bn merger proposal from rival casino operator Star Entertainment Group is still being considered, as is an offer from Oaktree Capital management to fund a buyout of Mr Packer’s stake.

The Australian understands that Star is still keen to push the deal despite financial crimes regulator Austrac earlier this week announcing a crackdown on both casino groups.

But it is also understood that things are happening slowly, with Star receiving little engagement from Crown’s board.

Crown was deemed not suitable to operate its Sydney Barangaroo Casino by a NSW inquiry earlier this year due to the company’s exposure to money laundering, organised criminal activity and a profits-first corporate culture.

But a culling of the company’s old guard and a promise from major shareholder James Packer to not interfere with the company’s operations, as well as an overhaul of its anti-money laundering regime spearheaded by Ms Coonan, led the NSW regulator to declare in May that Barangaroo could open “well in advance of the end of October.”

However, The Australian understands the board of the NSW Independent Liquor and Gaming Authority will next week meet to consider the new revelations of the Victorian probe in depth and consider the impact it will have on its own approval process, having thus far concentrated primarily on its own audit work with Crown.

In a statement released on Friday, Ms Coonan said Crown was just as committed to overcoming shortcomings revealed in the Victorian commission as it was to overcoming the shortcomings revealed in the Bergin inquiry.

“As executive chairman, I have made clear that any shortcomings identified by the royal commissions will be addressed,” she said.

“The board and I are committed to making Crown a stronger, more transparent and

respected company.

“We have initiated a sweeping program of significant reforms, enhancements and personnel changes. We cannot change the past, but we can be absolutely steadfast in the approach we take to driving the culture and transparency of the company into the future.”