Western Australia plans new Crown Resorts inquiry with royal commission powers

Any move by James Packer to sell down his holding in Crown is set be further delayed, as WA launched its own casino probe.

James Packer on his second day of testifying before the NSW Crown casino inquiry in October. Picture: Supplied.

Any move by billionaire James Packer to sell down his holding in Crown Resorts is set be further delayed, as the Western Australian government failed to rule out parts of a fresh four month-long inquiry into the gaming giant being held in public.

Crown is now facing fresh inquiries on two fronts in WA and Victoria, which looks set to stretch its internal resources at the same time as new executive chairman Helen Coonan works to drive a sweeping cultural change agenda through the company.

While Mr Packer already looked set to delay any thoughts of a sale until Crown Sydney was allowed to retain its gaming licence and Crown Melbourne was again operating at full capacity following the COVID-19 pandemic, fresh news of a WA inquiry is sure to prevent him extracting a full premium for his 37 per cent shareholding in any sale.

The Australian understands the chairman of the NSW Gaming Regular Philip Crawford would prefer Mr Packer to exit the Crown share register in the wake of the damning findings of the Bergin Inquiry.

But Mr Crawford said on Monday that he wanted to work with Mr Packer’s private company, Consolidated Press Holdings, to find an amicable solution to reduce CPH’s voting rights in Crown to a cap suggested by the Bergin report of 10 per cent while retaining a passive shareholding.

Crown shares fell less than 1 per cent on Wednesday despite news of the WA inquiry, highlighting the fact that regulatory action against the company at its Perth casino had been expected.

“Obviously these state regulators need to have a look,” said Investment Director and founder of Investors Mutual Anton Tagliaferro, who owns just over 2 per cent of Crown.

“It’s not unexpected. These problems have to be resolved and they will be resolved.”

Mr Tagliaferro said it didn’t matter if the WA inquiry made it harder for James Packer to sell down his stake in the company as he didn’t believe the billionaire would end up having to sell.

“If you look at what they were talking about during the inquiry, they were talking about putting a structure in place where Packer can’t vote on some of his shares,” he said.

“There’s no hurry for James to sell those shares unless he gets a very good offer from an overseas bidder.”

Ms Coonan will present Crown’s interim results on Thursday, after the company’s board met on Wednesday for the first time since a string of resignations over the past week triggered by the bombshell Bergin report.

The meeting was attended by departing chief executive Ken Barton and embattled Crown director Harold Mitchell, who continues to maintain he will not make a decision on his future until the company’s annual general meeting later this year.

It was revealed last year that as head of Crown’s remuneration committee, Mr Mitchell had been working with search firm Korn Ferry to find new Crown directors. Two are currently believed to be in talks with the company.

The NSW Independent Liquor and Gaming Authority also held its regular monthly board meeting on Wednesday, where it discussed the Bergin report.

Burswood probe

Earlier in the day WA racing and gaming Minister Paul Papalia said the new WA inquiry, which is set to have all the powers of a royal commission, would be headed by two individuals due to its complexity and expected months-long time-frame.

“We’ve been recommended by the state solicitor that two individuals undertake the inquiry because of the complexity of the task and also because it will be about four months in length,” Mr Papalia told Perth radio, adding that potential candidates are already being discussed.

“There’s been recommendations by the state solicitor,” he said.

“I can’t reveal who they are because they haven’t yet seen the terms of reference and accepted the task.

“Nevertheless, you are talking about people of the calibre of a retired supreme court judge, a retired very senior experienced public service, both of whom have impeccable credentials for the task.”

WA Premier Mark McGowan also reiterated the inquiry’s time frame.

“We expect that would take four months to complete and certainly we would support that,” Mr McGowan told reporters at a press conference.

“This is important that we get to the bottom of all of these issues and whether there are any Western Australia-specific issues, and what should be done in terms of making sure there’s no illegality and no unlawfulness at our casino.”

Mr Papalia said “some” parts of the inquiry may be public.

“It may be part of the hearings are public, there may be some that understandably that would potentially be confidential. We will leave that to the independent inquirers to determine, with advice from the State Solicitor,” he said.

A WA inquiry into Crown was recommended by the state’s Gaming and Wagering Commission on Tuesday night as the WA State Solicitor’s Office recommended the commission could not rely on the Bergin ­Inquiry alone to make findings over Crown and its Perth licence.

“The State Solicitor provided advice that indicated under our act we cannot take action based on the findings of another jurisdiction’s inquiry,” Mr Papalia explained on Wednesday.

“It is necessary legally but beyond that, a lot of the information on which they based their determinations and observations about Perth and Western Australia were not made public, so we don’t even have in our possession the information.”

On Monday it was revealed WA’s casino regulator Michael Connolly regularly went on fishing trips with lawyers and compliance officers from Crown, prompting him to step aside from his role.

The Gaming and Wagering Commission will also investigate itself as well as Crown to evaluate any perceived conflicts of interests as well as its own effectiveness as a regulator.

The commission also said on Tuesday it would ban gambling promoters – or junkets – from operating out of Crown Perth by next week after the Bergin report highlighted the links between prominent junkets and organised crime groups.

But Mr McGowan said there was no such urgency to revoke Crown’s licence in WA.

“Crown will continue to operate because if we take the licence away, 5,500 people lose their jobs overnight,” he told reporters on Wednesday afternoon.

“It will continue to operate, but we will have the inquiry as recommended.

“We will leave no stone unturned to make sure that there is no unlawfulness and no illegality at the casino.”

Perth’s Burswood Casino . Pic THEO FAKOS