Inquiry into Crown casino’s links to crime gangs

A royal commission will investigate Crown Resorts’ flagship casino’s links to organised crime and money laundering.

Crown Casino in Southbank, Melbourne. Picture: Penny Stephens

A royal commission will investigate Crown Resorts’ flagship casino’s links to organised crime and money laundering after the Victorian government bowed to political pressure and launched the probe following the damning findings of a NSW inquiry.

In a further blow to Crown’s major shareholder, billionaire James Packer, who was forced to cut ties with the casino giant’s board and management following the NSW inquiry findings, former Federal Court judge Raymond Finkelstein QC has been appointed to run the Victorian royal commission, which will hand down its recommendations as soon as August 1.

The announcement of the royal commission, which will cost $5m, follows years of allegations of money laundering and other improper conduct at Crown’s Melbourne casino and criticism of the Victorian gaming regulator for its alleged light-touch regulation of the company started by rich-lister and champion horse trainer Lloyd Williams.

Victoria was forced to launch the wide-ranging probe of Crown’s suitability to retain its Melbourne licence after the West Australian government last week announced an inquiry into the operations of Crown Perth, which it said would have the powers of a royal commission.

Victorian Premier Daniel Andrews said in a statement on Monday: “This is about making sure that those who hold a casino licence in Victoria uphold the highest standards of probity and integrity and that they’re accountable for their actions.”

Harold Mitchell. Picture: Stefan Postles

Minutes after the announcement on Monday afternoon, former advertising magnate Harold Mitchell revealed he was resigning from the Crown board with immediate effect.

He became the fourth director to step down in the wake of the bombshell findings of the NSW inquiry led by former Supreme Court judge Patricia Bergin.

Her inquiry found money laundering had taken place at Crown’s Melbourne and Perth casinos and revealed links between Crown and organised crime figures, while it also detailed significant governance and risk-management failings at the company.

As a result Ms Bergin recommended Crown be found unsuitable to retain the gaming licence for its new Barangaroo casino in Sydney. She also suggested Mr Packer’s voting rights in the company could be reduced to 10 per cent from their current 37 per cent.

Helen Coonan, a former Liberal minister who took over as Crown’s executive chairman last week, said the company welcomed the announcement from the Victorian government “as it provides an opportunity to detail the reforms and changes to our business to deliver the highest standards of governance and compliance, and an organisational culture that meets community expectations”.

NSW Independent Liquor and Gaming Authority chairman Philip Crawford said it would be concerned if anything new came out of the reviews in Victoria and Western Australia that was adverse to Crown but not already revealed in the Bergin report.

The ILGA is working with Ms Coonan on a range of reforms to Crown’s governance, risk management and anti-money-laundering practices to ensure it can retain its Sydney casino licence.

The Andrews government had in December brought forward the Victorian Commission for Gambling and Liquor Regulation’s ¬licence review for Crown, previously scheduled for 2023.

That review will now occur in parallel with the royal commission, and assess requirements for regulation of money laundering and junket operations.

“This royal commission responds to the serious findings of the NSW Independent Liquor and Gaming Authority inquiry,” the Andrews government said in a statement.

James Packer during his appearance at the NSW casino inquiry

“Since receiving the ILGA report, the government has taken advice about the most appropriate way to proceed in Victoria.

“Establishing a royal commission will ensure the most appropriate access to information regarding Crown Melbourne’s suitability to hold the casino licence given the Commission’s powers to compel witnesses and documentation.”

Consumer Affairs, Gaming and Liquor Regulation Minister Melissa Horne said the Bergin ¬inquiry’s findings were “incredibly concerning”. “The royal commission will establish the facts and the government and the VCGLR will take any necessary action at the conclusion of the investigation,” Ms Horne said. “We will not tolerate illegal behaviour in our gaming industry.”

She said the government would legislate later this year to enable the regulator to give effect to any findings of the royal commission. The government has also commenced work to establish an independent casino regulator and Ms Horne has commissioned a review to advise on the necessary structural and governance arrangements.

Mr Finkelstein has served for more than 40 years at the Victorian Bar and has been a queen’s counsel since 1986. He served as a Federal Court judge between 1997 and 2011, chaired the Gillard government’s inquiry into the media in 2012, and has since returned to private practice as a barrister. He provided legal advice to the then Andrews opposition ahead of the 2014 state election that informed the now Premier’s promise to rip up the contract for the East West Link road project, costing Victorian taxpayers $1bn.

Mr Mitchell tendered his resignation to Ms Coonan amid growing pressure from institutional shareholders and his fellow directors for him to step down. He was head of Crown’s remuneration committee. His departure follows the resignations in the past fortnight of Andrew Demetriou, Guy Jalland and Michael Johnston from the board.

Another director, the late Kerry Packer’s doctor John Horvath, has also announced plans to leave the Crown board.

ADDITIONAL REPORTING: GLENDA KORPORAAL