‘Illegal’: Crown keeps licence but put on two-year probation
The royal commissioner has described Crown Resorts’ conduct as ‘illegal, dishonest, unethical and exploitative’, but he stopped short of recommending its licence be scrapped.
Royal commissioner Raymond Finkelstein has described Crown Resorts’ conduct as “illegal, dishonest, unethical and exploitative”, but found the public interest would be best served by granting the gaming giant two years’ probation, rather than stripping it of Victoria’s only casino licence.
The Andrews government’s response to Mr Finkelstein’s findings will force James Packer to sell down a $2.4bn stake in Crown Resorts, and Crown will be permitted to continue operating only under the supervision of inaugural IBAC commissioner Stephen O’Bryan QC as special manager.
In a scathing 652-page final report released on Tuesday, Mr Finkelstein declared Crown “unsuitable” to hold Victoria’s only casino licence,
“Within a very short time, the commission discovered that for many years Crown Melbourne had engaged in conduct that is, in a word, disgraceful,” the former Federal Court judge wrote.
“This is a convenient shorthand for describing conduct that was variously illegal, dishonest, unethical and exploitative.”
But in the clearest demonstration yet of how Victoria’s fortunes have become inextricably intertwined with those of the Packer-backed behemoth since it opened on the banks of the Yarra in May 1997, Mr Finkelstein stopped short of recommending the Victorian government scrap Crown’s licence outright, noting the move would threaten the jobs of more than 11,500 employees and pose a “real risk of harm” to the state’s fragile post-Covid economy.
Instead, Crown will have to attempt to reform itself under the supervision of Mr O’Bryan, who Mr Finkelstein declared should be “the ultimate decision maker” at Crown for two years, before reporting to Victoria’s gaming regulator on the group’s suitability.
Premier Daniel Andrews declared Crown was “more than on notice”, saying its licence “has been cancelled” when asked whether Victoria’s economy was so dependent on Crown that stripping the casino of its licence had not been an option.
“The licence ends in two years if Crown cannot demonstrate again and again and again by the special manager they are fit to hold that licence,” he said.
Monday will mark seven years since Crown founder Lloyd Williams was caught on camera placing his hand on the then opposition leader’s shoulder and assuring Mr Andrews ahead of the imminent state election: “You should probably know I am on the executive of the Packer estate, and James is going to kick every goal he can for you.”
On Tuesday, Mr Andrews faced questions over his government’s initial reluctance to hold a royal commission into Crown.
A damning Auditor-General’s report found in February 2017 that the Victorian Commission for Gambling and Liquor Regulation had not properly scrutinised money laundering by high rollers at Crown.
In mid-2019, 60 Minutes and Nine Newspapers aired evidence of the criminal infiltration of Crown’s Melbourne and Perth casinos, sparking the Bergin inquiry in NSW. But it was not until the Bergin inquiry ultimately found Crown unsuitable to hold a licence for its $2.2bn Barangaroo development in Sydney in February this year that the Andrews government finally agreed to set up a royal commission into Crown Melbourne.
Ask why it took his government so long to instigate a proper examination of the allegations against Crown, Mr Andrews said: “We would have preferred to have perhaps been privy to this much earlier, and we would have acted on it much earlier.”
Opposition gaming spokeswoman Steph Ryan called for a wider investigation into Crown’s dealings with the Andrews government, saying the royal commission’s narrow terms of reference had protected the Labor government from scrutiny.
“Daniel Andrews was the gaming minister in 2006,” Ms Ryan said. “The Premier himself has quite a degree of accountability here. He knew exactly what he was saying when he said, in July 2019, that the regulator was up to the job … If the regulator was doing its job, why are they so reluctant to have any investigation into these issues?”
Mr Finkelstein’s recommendations will forever change the casino’s business, with a ban on the use of cash for bets over $1000 and the requirement that patrons be made to carry a card that tracks their play time and spend among his 33 recommendations, along with spending limits for poker machines.
However, the findings of the commission will come as relief to Crown, which expected the worst after the probe’s eight-week stint of hearings revealed it underpaid millions in state gaming taxes, “bullied” state casino regulators, and accepted illegal credit card payments for gaming chips from Chinese high rollers.
Shares in Crown Resorts immediately jumped 9.5 per cent on news of Mr Finkelstein’s findings, finishing up 8.7 per cent.
Crown is also fighting to reclaim the licence for its Sydney casino after the Bergin Inquiry revoked it earlier this year, and is facing another royal commission into its Perth casino in WA.
Crown Resorts chief executive Steve McCann said it would work with the Victorian government, which has promised to implement all of Mr Finkelstein’s 33 recommendations. “Today’s announcement by the Victorian government provides a way forward for the business, our people, customers, partners and shareholders,” Mr McCann said.
“We are embracing the challenges ahead of us as we work to restore our reputation and we are determined to get this right.”
But there was little relief for Crown’s major shareholder James Packer, with Mr Finkelstein recommending his private company Consolidated Press Holdings be made to sell his 37 per cent stake to below 5 per cent by September 2024, when restrictions on his holding imposed by NSW’s gaming regulator expire.
He will appear as a witness at WA’s commission this Friday.
Victorian Greens leader Samantha Ratnam said the leniency given to Crown was indicative of the “parasitic relationship between Crown and successive state governments”.
“This is a story of how the gambling billionaires win,” she said.
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