‘What choice do they have?’: Crown Resorts reform plans doubted

The head of the Victorian royal commission into Crown Resorts has questioned the genuineness of its corporate makeover.

The Crown casino complex in Melbourne. Picture: David Crosling

The head of the Victorian royal commission into Crown Resorts has expressed doubt about the genuineness of the corporate and cultural reform efforts the company has mounted to try to keep its casino licences across Australia.

The comments were made at a hearing of the commission on Thursday during an appearance of Crown’s chief compliance and financial crimes officer, Steven Blackburn, who was appointed earlier this year after the company temporarily lost its NSW casino licence in the aftermath of the Bergin inquiry.

Mr Blackburn, who joined Crown from NAB, told the commission he had seen little evidence of the cavalier approach to money laundering risks that led to the Bergin inquiry.

“I would say that the culture that I have come into is not reflected into the culture I have seen evidenced through past activity,” he said.

But Commissioner Raymond Finkelstein – the man tasked with the responsibility of finding Crown suitable or unsuitable to run its Melbourne casino – expressed doubt over the reforms.

“If you look at the real world, which every now and again we are required to do, this is an organisation that has got three governments, probably half a dozen regulators, breathing down their neck – what do you expect them to do?” he said.

Commissioner Raymond Finkelstein has expressed doubt over the company’s reforms (Picture: AAP)

“This is not voluntary behaviour where a bunch of people woke up in the morning and said: ‘Oh, we’ve been doing really bad stuff, and we’ll fix it’.”

“They are being hounded by governments and regulators and they are fighting for their lives. What choice do they have?”

Mr Blackburn also told the commission he could not be confident that the amount of money transacted through an illegal process for funding gaming activity at Crown Melbourne popular with Chinese high rollers was not higher than originally thought.

In early June, Crown Resorts admitted that between 2012 and 2016 it allowed patrons to purchase $160m of casino chips through a terminal at the Crown Towers hotel reception in Melbourne, with the amount charged to an existing or fake hotel room bill miscellaneously.

Crown’s legal teams knew this policy likely violated state law preventing chips being purchased via debit or credit cards, while the commission viewed an internal note that stated the policy was “clearly designed” to get around Chinese currency controls.

Mr Blackburn said he could not be confident in the accuracy of the $160m figure as he is yet to conduct due diligence into the matter.

“We engaged external counsel for the purpose of conducting this review. I am not leading the initiative, as I mentioned earlier, so there are others leading this initiative, and we would continue to rely on external counsel for advice in that regard.”

The commission heard that external counsel determined the process might have resulted in Crown dealing with proceeds of crime, with an external review of money laundering at Crown by Deloitte expanded to examine the issue.

Mr Finkelstein said the issue was indicative of a cultural problem at Crown that encompassed all levels of staff.

“The whole thing was a fraudulent scam from the outset, and everybody involved would have known that,” he said.

“If a hotel issues a fake invoice, even the desk clerk will say ‘there’s something going on’.

Mr Finkelstein told Mr Blackburn the “real question” was “are the people that we are dealing with going to go back to their old ways when everybody stops looking?”

“Not while I’m on watch,” Mr Blackburn replied.

“One person in an organisation of 15,000 is not enough,” Mr Finkelstein said.

“One person, plus 110 I am bringing in,” Mr Blackburn shot back.

“Yeah, OK,” Mr Finkelstein concluded.

The commission also scrutinised Mr Blackburn over his lack of responsible service of gaming experience, despite being appointed the head of the division in March.

Counsel assisting suggested this part of his remit was a consequence of gambling harm being announced as a topic of the commission at that time.

Mr Blackburn said he had an experienced team under him while responsible gaming folded into his other duties.

“To be clear, I am not an expert in responsible gaming. However, I am a senior executive responsible for integrity functions, and have been for many years,” he said.

“What I took was an opportunity to lean into a new area that was very similar to the other areas that I work in, in that it goes to our social license to operate.”