Yahoo News Crown Resorts allowed to keep Melbourne casino licence despite ‘illegal, dishonest’ conduct
Crown Resorts will be allowed to keep its licence to run the lucrative Melbourne casino, under strict new conditions, despite a royal commission finding the company had engaged in “illegal, dishonest, unethical and exploitative” conduct.
In his report, tabled in Victorian parliament on Tuesday, the commissioner, Ray Finkelstein, said there were “a litany of failings” in the way Crown dealt with anti-money laundering rules and that it had “facilitated money laundering” through a bank account held by a subsidiary.
But rather than strip the company of its licence, it recommended a special manager be appointed to oversee the operation of the casino for the next two years.
Related: Ziggy Switkowski named as new chair of Crown resorts amid inquiry fallout
The Victorian government accepted the recommendation which sets out that the licence will be cancelled unless Crown can convince the casino regulator it has reformed itself in the meantime.
The state government has also accepted Finkelstein’s recommendations to dramatically increase maximum penalties for breaches of casino rules from the current $1m. The commissioner recommended $10m, but the government said it would increase the figure to $100m.
Rules forcing the state to pay compensation to Crown if it changes casino regulation in a way unfavourable to the company will be removed.
Finkelstein, a former federal court judge, also found attempts by the Victorian Commission for Gambling and Liquor Regulation – which is to lose its responsibility for casino oversight under changes already announced by the state government – to investigate Crown were hampered by “a deliberate lack of cooperation and candour on the part of Crown Melbourne and its senior executives”.
He also found Crown underpaid state gambling tax.
“Many senior executives involved in the misconduct were indifferent to their ethical, moral and sometimes legal obligations” and lawyers who knew Crown wanted to engage in conduct that contravened some laws “failed to counsel Crown Melbourne not to go ahead”, he said.
In July, the counsel assisting the commission, Adrian Finanzio, recommended that Crown lose the licence.
But Finkelstein said that, “somewhat reluctantly”, he had reached the conclusion that despite Crown’s misconduct, there was a “real risk of significant harm to the Victorian economy and to innocent third parties if Crown Melbourne’s licence were immediately cancelled”.
He said he also believed “that Crown Melbourne has the will and the capacity to reform itself so that it again becomes a suitable person to hold a casino licence and can remove the stain on its reputation”.
Related: ‘Shameful experience’: gambler lost $300,000 at Crown casino in two months
Among 30 other recommendations, Finkelstein said that James Packer’s investment company, Consolidated Press Holdings, should be forced to reduce its 37% shareholding in Crown to less than 5% by September 2024 after it “abused its position as a dominant shareholder, which included retaining significant control over the affairs of the company, even after he resigned as chairman in 2018”.
He also recommended significant reforms to how the casino runs and is regulated – many of which move the system back towards how it was originally supposed to operate when it was set up in the early 1990s.
He said junkets, which bring in profitable high-rollers from overseas, should be permanently banned. Crown stopped junkets in May and has said it has no plans to resume them.
Finkelstein also said that to combat problem gambling all play should be on cards and strict time limits should be introduced.
The government said it supported these recommendations “in-principle subject to further detailed analysis and consultation being undertaken”.
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In a statement to the stock exchange, Crown said it was “currently reviewing the report and the Victorian government’s response”.
“Crown will work cooperatively and constructively with the Victorian government in relation to the findings and recommendations of the report and their response.”
The premier, Daniel Andrews, set up Finkelstein’s inquiry after a New South Wales inquiry, run by the former judge Patricia Bergin, found that Crown had facilitated money laundering at its Melbourne and Perth casinos and that some junket operators were linked to organised crime.
The Bergin inquiry followed the publication of the “Crown Unmasked” series, which made a series of serious allegations about the casino company, by Nine Entertainment’s current affairs TV show 60 Minutes and its newspapers.
