Crown ‘unfit to operate casino’, say Victorian royal commission lawyers
Counsel assisting Victoria’s royal commission has recommended that Crown Resorts be found unfit to operate its Melbourne casino.
Crown Resorts is not a suitable company to operate its flagship Melbourne casino and its licence could be cancelled, counsel assisting the Victorian royal commission into the James Packer-backed group has said.
Although the final recommendation on Crown’s suitability will be made by commissioner Raymond Finkelstein, the recommendation by counsel assisting is a hefty blow for the casino group, which was found to be unsuitable to operate its Sydney casino at Barangaroo in February by the NSW Bergin Inquiry.
Addressing Mr Finkelstein in Melbourne on Tuesday, counsel assisting Adrian Finanzio SC formally submitted that Crown be found unsuitable to run Crown Melbourne.
“We submit as follows: as at 1 February 2021, when the Bergin report was published, Crown Melbourne was not a suitable licensee,” he said.
“After all of the evidence presented in these hearings, it remains clear that Crown Melbourne is not presently suitable to hold the casino licence.”
Mr Finanzio said the recommendation was based on evidence given before the commission since it began in March which revealed “serious misconduct, illegal conduct and highly inappropriate conduct” that was facilitated “by a culture which has consistently put profit above all other considerations”.
He said it was open for Mr Finkelstein to recommend Crown’s casino licence be terminated, despite the consequences it would have on the state’s economy. With about 11,500 staff, Crown Melbourne is one of Victoria’s largest private employers.
“It is counsel assisting’s submission that it would be open for the commission to recommend that the licence be cancelled,” Mr Finanzio said, adding: “That is not a submission made lightly. It is made cognisant of the consequences that such a finding would in all likelihood be highly disruptive to many people.”
At a press conference on Tuesday, Victorian Premier Daniel Andrews said he would reserve judgment on the company until Mr Finkelstein handed his final report to the government.
“He’ll make findings, he’ll make recommendations to us and then we won’t hesitate to act on that,” Mr Andrews said.
“But it is clear that what has gone on there should not have gone on, otherwise I wouldn’t have called the royal commission that I’ve called.”
The recommendation is also a significant blow for Mr Packer, who owns approximately 37 per cent of the company. The value of his stake in Crown has plunged more than 20 per cent from its yearly high in April – wiping more than $500m from his net worth.
Mr Packer reportedly wants to offload his shares. But even if he chooses to remain invested in the company, he faces barriers. Mr Finanzio also submitted that shareholdings in Crown Melbourne, both direct and indirect, be restricted to a 5 per cent cap without regulatory approval.
The statement comes after the NSW Bergin Inquiry recommended a 10 per cent cap on shareholding without regulatory approval, after it was heard Mr Packer had a “deleterious” influence on the company.
Mr Finanzio said although Mr Packer “at present … is not exercising influence” due to restrictions placed on his ability to do so by the NSW regulator, it was important no future shareholder be allowed to exercise the same influence he once did.
The recommendation of unsuitability comes despite a corporate and cultural overhaul of the company spearheaded by former Liberal senator and Crown executive chair Helen Coonan, a director of 10 years who was elevated to the top job after the Bergin Inquiry resulted in an exodus of Crown’s senior management.
Another royal commission to investigate conduct at Crown’s Perth casino begins on July 26.
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