gambling

Australia’s Crown Resorts ‘unfit’ for Sydney gambling license

Reuters
Australia’s Crown Resorts ‘unfit’ for Sydney gambling license

Image from Crown Sydney website

The findings of an inquiry deal a blow to Crown Resorts' hopes that it might soon open the casino in its $1.70-billion Sydney waterfront tower

Australian casino giant Crown Resorts Ltd is unsuitable to hold a gambling license for its flagship new Sydney resort unless it makes sweeping changes to its board and culture, according to a highly critical report by an industry regulator.

The report, published on Tuesday, February 9, followed a yearlong inquiry commissioned by the New South Wales state gambling watchdog that aired allegations of widespread money laundering and governance failures at Crown.

The findings deal a blow to Crown’s hopes that it might soon open the casino in the A$2.2-billion ($1.70-billion) Sydney waterfront tower it has spent almost a decade building, while putting pressure on other state regulators to scrutinize its operational gambling facilities elsewhere in the country.

“Any applicant for a casino license with the attributes of Crown’s stark realities of facilitating money laundering, exposing staff to the risk of detention in a foreign jurisdiction, and pursuing commercial relationships with individuals with connections to Triads and organized crime groups would not be confident of a positive outcome,” inquiry head Patricia Bergin wrote in the report.

Bergin, a retired judge, recommended a 10% limit on any casino shareholdings in the state without specific approval, a limit that would effectively force Crown’s major shareholder James Packer to divest some of his 35.9% share.

She also singled out chief executive Ken Barton as “no match for what is needed” but acknowledged the company may ultimately make the necessary changes to be allowed to run a casino.

Regulator the Independent Liquor and Gaming Authority (ILGA) said it will meet this month to consider Bergin’s report before making a decision on the license. The regulators of Victoria and Western Australia states, where Crown has its other casinos, had no immediate comment.

“It raises the equally important question about what happens with the Crown licenses in Melbourne and in Perth?” said Andrew Wilkie, an independent member of parliament who has campaigned against gambling.

“If they are, as has been found, unfit to hold a license in Sydney, surely they are just as unfit to hold a license in other jurisdictions,” said Wilkie.

Crown said it was considering the report, and would work with ILGA in relation to its findings and recommendations. The company put its shares in a trading halt until Thursday, February 11.

Crown pegged its future growth to the 75-floor tower complex in Sydney after curtailing its offshore expansion plans, including exiting the Asian gambling hub of Macau following the arrest of several staff in China for violating the country’s anti-gambling laws.

The company pressed ahead with the December grand opening of the tower, the city’s tallest, which houses a hotel, retail shops, restaurants, bars, and residential accommodation along with the planned casino.

Money laundering

Crown was granted a gambling license for the tower several years ago, but the ILGA suspended it last year pending an inquiry prompted by media reports that alleged company dealings with organized crime groups at its Melbourne casino.

The company initially denied the reports in full-page newspaper advertisements, but its executives testifying at the ILGA inquiry acknowledged the possibility of money laundering taking place on its premises.

Crown had an “unjustified belief in itself and…unwillingness to entertain the prospect that there was any force in any of the media allegations,” Bergin wrote in the report. The company chairman rejected the description of corporate “arrogance…however it is an apt description,” she added.

The fact that Crown only began a third-party investigation into its anti-money laundering processes last October “should cause deep concern” to the regulator, Bergin said.

In hearings through 2020, the inquiry also heard about a management structure where Packer requested frequent trading updates despite holding no board or management position, while attempting to take the company private – without disclosing the arrangement to other shareholders.

“It is imperative that this remote maneuvering must cease for the health of the corporation,” Bergin wrote. – Rappler.com