The New South Wales Independent Liquor & Gaming Authority (ILGA) granted a licence to Crown Resorts on June 22 to operate its casino in Barangaroo in Sydney.
This comes less than 18 months after the ILGA deemed Crown “unfit” to hold a gambling licence in February last year. Other inquiries have also found Crown unfit to hold a licence in Victoria and Western Australia.
The entire Barangaroo project and casino is a story of corruption and secrecy, motivated by profit, with widespread opposition from community groups.
Labor and Coalition state governments aided the project from the beginning.
Labor Premier Bob Carr deemed Barangaroo a “state significant site” in 2006, which meant the project was no longer subject to more rigorous local planning laws.
When billionaire casino mogul James Packer announced plans to build a casino in the middle of Barangaroo, on land that was meant for a public park, the government paved the way for him to do so.
After a private lunch between Packer and then-Premier Barry O’Farrell, hosted by Alan Jones, the government announced Crown had been approached via an unsolicited proposal. This process, shrouded in secrecy, allows private interests to make deals with the government to build major projects without a tender process.
Urban geography academics Dallas Rogers and Chris Gibson described these types of public-private infrastructure proposals as “concerning”.
“The public does not know the exact nature of the relationships involved, nor the financial details,” they wrote in the Conversation last year.
As part of the unsolicited proposals deal, Crown paid the government “an upfront licence fee” of $100 million and guaranteed to pay $1 billion worth of gambling taxes within the first 15 years of operation.
Barry O’Farrell's Liberal government amended the Casino Control Act in 2013 to allow for a second casino licence in Sydney — previously held only by the Star casino in Pyrmont.
The revolving door between the government and Crown also helped smooth the process. Liberal Senator Helen Coonan quit in 2011 and, just days later, joined Crown’s board of directors.
Crown hired former NSW Labor MPs Karl Bitar and Mark Arbib as lobbyists to help ensure Labor, in opposition, did not put up any resistance to the proposal.
The Barangaroo Development Authority — set up by the government to manage the project — handed over the proposed Crown site to developer Lendlease on a 99-year lease in 2010.
The agency deleted most of the financial information of the lease contract before making public what remained of it.
Lendlease continued modifying the Barangaroo plans to increase the size of commercial and residential buildings, while reducing the public domain.
Originally, the plan included public open space along the entire Western foreshore of Barangaroo. Now, the Crown building sits in the middle of that space.
Lendlease reduced the proposed public areas from 11 hectares of the 22 hectare site to just six, claiming it was necessary for the project to be economically viable.
Michael Pascoe, writing in the Sydney Morning Herald in 2016, said: “As for the claim that the entire project would be at risk if the podium proposal [base of the Crown building] was trimmed back to improve public access to the foreshore, a government with spine would have called the bluff … but there’s no record of any Australian state government being prepared to stand up to the Packer machine.”
Architect and former Sydney City Councillor Philip Thalis referred to the resulting Barangaroo development as “Lendlease-town”.
“On what was once public land, we’ve ended up with ... an exclusive outdoor shopping mall, an enclave of privilege and high prices,” Thalis said in 2015.
The inquiry report, released in February last year, said that Crown knowingly breached gambling laws in China — where any form of gambling is illegal, including travelling overseas to gamble — by promoting its Australian casinos. Chinese police arrested 19 Crown employees in 2016 and 16 were fined and jailed.
The report said Crown partnered with junket operators — companies used to attract rich tourists to gamble at casinos — linked to organised crime groups.
A Victorian royal commission into Crown Melbourne in October revealed Crown’s criminality. Crown’s executives admitted they knowingly committed tax fraud since 2012 — estimated to be $480 million.
Videos leaked in 2019 showed hundreds of thousands of dollars in cash being exchanged for gambling chips in Crown Melbourne. The report said there is “no doubt” that money laundering was taking place at Crown Melbourne.
It said Crown’s “prioritisation of profit over all other considerations” was one of the main reasons it actively broke China’s gambling laws, committed tax fraud and allowed money laundering.
“It has not obeyed the law. It has not acted honestly. It has exploited vulnerable individuals. It has not cooperated with the regulator or with government.”
Lack of regulation
Despite several credible claims of criminal activity, the Victorian Commission for Gambling and Liquor Regulation — responsible for reviewing Crown Melbourne’s casino licence — deemed it a “suitable” operator for years.
Alliance for Gambling Reform advocate Tim Costello pointed to “a culture of Crown’s political dominance and dominance of the regulator” allowing this to happen. “The regulator has shown almost deferential, submissive, acquiescence to Crown.”
Mark Sawyer in MichaelWest Media on June 9 pointed to “the relationship between the casino moguls and our rulers”. “The economics of casinos are so baked in to the budgets of state governments that any wind back in the time of anybody alive today is nigh on unthinkable.”
Professor Linda Hancock, author of Regulatory failure? The case of Crown Casino, believes state governments are too reliant on revenue from gambling companies to properly regulate casinos. “You can’t trust the states to do it because their hands are in the till,” she said.
The federal government took $6.2 billion in revenue from gambling taxes in 2018, according to Statista.
Taxes paid to all levels of government from Crown in 2019 were just $650 million.
However, the flow of money was not all one way.
While millions of Australians struggled through the economic impacts of the COVID-19 pandemic lockdowns, Crown received millions in government payments — despite making big profits and being investigated for tax fraud.
According to the Australian Securities and Investments Commission, Crown was the second-biggest recipient of JobKeeper payments: the federal government paid Crown $92.9 million in 2020 and $198.3 million last year.
A month after the first JobKeeper payments started, Crown paid a $203 million dividend to shareholders and gave its board a $218,000 pay rise.
Even putting aside the blatant crimes committed by Crown and its associates, the Crown project is still a national disgrace: it represents the privatisation of public land for profit and for little public benefit.
Packer himself said the casino “will not be accessible by the NSW general public — it will be a members-only facility”.
Instead of $100 million apartments, expensive hotel rooms and a casino for billionaires, the Crown building should be public housing for those who need it.