Crown Casino To Keep License Despite A Royal Commission Finding It Is Unfit To Open
Crown has two years to reform its behaviour.
Crown Resorts has been found unfit to run its infamous Crown Casino in Melbourne, following an eight-month royal commission into legal and ethical issues within the company. Despite this, the company will be allowed to keep its license.
The final report by Commissioner Ray Finkelstein, which was released publicly on Tuesday morning, gave 33 recommendations and ultimately found the casino to be “unsuitable to hold the license”.
“The Commission discovered that for many years Crown Melbourne had engaged in conduct that is, in a word, disgraceful,” reads Finkelstein’s report.
“It is difficult to grade the seriousness of the misconduct. Some was so callous that it is hard to imagine it could be engaged in by such a well-known corporation whose Melbourne Casino Complex is visited by millions annually.”
“When these facts came to light, it was inevitable that Crown Melbourne would be found unsuitable to hold its casino licence. No other finding was open.”
What Was The Royal Commission All About?
For those unfamiliar, the Victorian Government launched a Royal Commission into Crown’s suitability to hold its Victorian casino license in February of this year. The Royal Commission followed a New South Wales decision to block Crown from operating a casino in Sydney.
The Bergin Report, which led to the blocking of the Sydney casino, made two key findings that served as a precursor for the Victorian Royal Commission:
- Crown Melbourne facilitated millions of dollars to be laundered through a bank account of its subsidiary.
- Crown Melbourne allowed operators with links to organised crime to arrange for junket players to gamble at the casino.
“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,” Victorian Premier Daniel Andrews said at the time.
The Royal Commission focused on the gambling regulator’s monitoring of the casino, the investigation into the arrests of 19 staff members back in 2016, and junket operations.
Specifically, allegations that Crown junket operators facilitated trips for high-rolling Chinese gamblers with clear links to organised crime — fuelling concerns of money laundering.
What Did The Royal Commission Find?
The Royal Commission’s findings concluded that “Crown acted in an illegal way, a dishonest way, in an unethical way, and an exploitative way” but has not recommended its license be stripped.
“The catalogue of wrongdoing is alarming, all the more so because it was engaged in by a regulated entity whose privilege to hold a casino licence is dependent upon it being, at all times, a person of good character, honesty and integrity,” Finkelstein’s findings state.
“It is difficult to grade the seriousness of the misconduct. Some was so callous that it is hard to imagine it could be engaged in by such a well-known corporation whose Melbourne Casino Complex is visited by millions annually.”
The lengthy report noted underpayment of casino tax, of which $61.5 million in tax and interest has already been repaid, breach of local laws and assisting international patrons to breach Chinese currency laws, and a lack of duty of care for gambling addicts.
“Perhaps the most damning discovery by the Commission is the manner in which Crown Melbourne deals with the many vulnerable people who have a gambling problem. The cost to the community of problem gambling is enormous. It is not only the gambler who suffers. It also affects many other people, and institutions,” Finkelstein found.
What Is The Victorian Government Doing About It?
In a press conference on Tuesday morning, the Victorian Minister for Consumer Affairs, Gaming and Liquor Regulation Melissa Horne confirmed the government will accept — in principle — all 33 recommendations, with legislation being introduced to immediately address nine of the recommendations.
“The Royal Commission’s findings include grave systemic breaches of the law. Tax breaches. Bullying. Misleading and delaying the regulator, and systemic breaches of responsible gaming obligations, which put vulnerable Victorians at risk,” Horne said in a press conference on Tuesday.
“In making these findings, the Royal Commission identified that Crown failed to carry out its responsibilities under the law, to the regulator, to its staff and, ultimately, the Victorian people.”
As a result, the Victorian Government will be “putting in place the most stringent conditions that have ever been put in place in Australian corporate history”.
Effectively, Crown Casino has been put on a two-year good behaviour bond, with Horne promising that its license will be revoked if the regulator is not “clearly satisfied” with the company’s conduct at the conclusion of that period.
“Firstly, 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. This puts the onus well and truly on Crown to reform itself,” said Horne.
“Secondly: What we are doing is increasing the maximum penalty from $1 million to $100 million.”
Perhaps the most significant chance is the implementation of a Special Manager, who will oversee Crown’s behaviour for the next two years. It will be up to the Special Manager — and the regulator — to determine if Crown has successfully reformed enough to keep its license.
This Special Manager has been announced as Steve O’Brien, the founding commissioner of Victoria’s Independent Broad-Based Anti-Corruption Commission (IBAC). O’Brien will have a slew of powers that will give him a high level of control and authority over how the casino will run for the next two years.
“It will be having the object to investigate the affairs and the operations of the casino. It will be able to attend all meetings of the board. To be able to inspect all records, books, and documents. And most importantly, be able to direct the board and have the power of veto over board decisions,” explained Horne.
The Victorian Government will also introduce legislation to ban junkets — the gambling tour operators that have long been rumoured to have links to organised crime and money laundering.
Why Isn’t Crown’s License Being Revoked?
Finkelstein clearly found that “it was inevitable that Crown Melbourne would be found unsuitable to hold its casino license.” However, the bigger question for the Royal Commission was what to actually do about this.
The report notes that the cancellation of Crown’s license could cause “considerable harm to the Victorian economy and innocent third parties”, while also noting that Crown could reform itself to be suitable to hold such a license in a short period of time.
“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 good will and skill,” Finkelstein found.
“The program is likely to succeed. If it does, that will be to the benefit of Victoria.”
TL;DR: Crown Resorts has been given a two-year lifeline to clean up its act if it wants to continue running the Melbourne casino, which brings in $1.58 billion for the company annually.
Crown Casino is yet to publicly comment on the findings.
Gambling addiction can ruins lives. It’s not too late to get help. You can call the National Gambling Helpline on 1800 858 858 or visit www.gamblinghelponline.org.au.