Crown has been lashed as ‘illegal, dishonest, unethical and exploitative’ but will cling on to its Victorian gaming licence – for now.
The Victorian royal commission investigating explosive evidence Crown facilitated money laundering at its flagship Melbourne casino has recommended against stripping the company of its gaming licence in the state for now but deemed its conduct “disgraceful”.
The probe was instigated after last year’s NSW Independent Liquor and Gaming Authority found the venue and also Crown’s Perth casino had been infiltrated by underworld figures through Chinese high-roller ‘junket’ tours, with vast sums of ill-gotten cash washing through its bank accounts.
The outcome of the Victorian investigation was released publicly on Tuesday, tabled in parliament.
Commissioner Raymond Finkelstein had flagged the very real possibility Crown could be stripped of its Victorian licence, describing suspicious card transactions that went through the hotel with fake invoices issued for rooms that did not exist as “a fraudulent scam from the outset”.
But he has instead recommended against such a dramatic move, even though he found it was “inevitable” Crown would be found not suitable to continue to hold its 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 report read.
“This is a convenient shorthand for describing conduct that was variously illegal, dishonest, unethical and exploitative.
“Although Crown Melbourne rightly deserves criticism for its past misconduct, and no one connected with the organisation is entitled to much sympathy, what tipped the balance against the cancellation of its licence was that Crown Melbourne has, at great financial cost, embarked on a significant reform program led by people of goodwill and skill.
“The program is likely to succeed. If it does, that will be to the benefit of Victoria.”
Commissioner Finkelstein recommended creating the position of a special manager to oversee and control Crown Melbourne’s affairs for two years.
“At the end of that period, the regulator should determine whether it is clearly satisfied that Crown Melbourne has become a suitable person to hold its casino licence and that it is in the public interest for it to do so.”
Gaming Minister Melissa Horne announced that the founding commissioner of the Independent Broad‑based Anti‑Corruption Commission, Steve O’Brien, would take on that role.
“This is a role unprecedented in Australian corporate history that provides a level of oversight that has previously been unknown.”
She described Crown as being “on probation”, saying legislation to implement nine of the 33 recommendations had been introduced and the other 24 would be considered but had been accepted in principle.
“We have gone further … what we’re doing is taking the recommendation and saying, at the end of those two years, the government will automatically assume that Crown’s licence has been cancelled, unless they demonstrate otherwise,” she told reporters.
“This puts the onus well and truly on Crown to reform itself.”
Commissioner Finkelstein recommended lifting the penalty for breaching the Casino Control Act from a fine of up to $1m currently to at least $10m, but the Victorian government is upping it to $100m.
The Victorian government is also banning junkets.
The commissioner also recommended former chairman and largest shareholder James Packer reduce his shareholding in Crown Resorts from 37 per cent to less than 5 per cent.
The NSW inquiry found Mr Packer’s influence as Crown’s biggest shareholder and former chairman had been “disastrous” as he was the driving force to secure more of the Chinese high-roller junket market at the centre of the scandal.
Commissioner Finkelstein, a former Federal Court judge, said the evidence at the Victorian royal commission confirmed those views.
The company has been deemed unfit to hold a gaming licence for its new $2.2bn Sydney venue at Barangaroo and its Perth licence is being reviewed at a separate royal commission still underway, with Mr Packer due to face the investigation on Friday.
The findings of the West Australian investigation are due in March, with the commissioners saying they will take into account the conclusions of the Victorian probe.