Crown Melbourne slapped with a feather

November 11, 2021
Crown Melbourne.

Despite a Royal Commission into the suitability of Crown Casino to hold a gaming licence, which found it was unfit to run the Southbank complex in Melbourne, it will not lose its licence.

At the end of October, Commissioner Ray Finkelstein handed down a report which called on it to reform itself. This is despite the report finding evidence of: tax evasion; assisting high rollers to engage in money laundering; and the regulator being stifled.

Crown will be supervised by a “special manager”, who will determine after two years whether Crown is able to hold a gaming licence.

It recommends James Packer’s Consolidated Press Holdings (CPH) divest it 37% shareholding in Crown Resorts (Crown Melbourne’s parent company) down to 5% by 2024. The Victorian government accepts this recommendation.

While Packer’s father Kerry was known as one of the biggest spending gamblers in the world, he still moved the media business into the murky world of gaming. Packer and his friend Lawrence Ho, son of the Macau gambling magnate Stanley Ho, jointly invested in ventures in Macau and Australia.

Stanley Ho is on the list of those who are banned from being able to operate casinos in New South Wales. Lawrence Ho’s company Melco bought a 20% stake in Crown Resorts in 2019, and it has since been revealed that Stanley Ho had a stake in Melco.

This was the trigger for royal commissions into Crown’s suitability as a gaming licence operator in Victoria and Western Australia as well as an inquiry recommending Crown’s unsuitability as an operator in NSW.

Packer did not deny knowing about Ho’s connections to Melco, but he told the NSW inquiry he had “forgotten” about them.

Crown Melbourne includes a casino, retail outlets, hotels, concert and event facilities and food outlets which, combined, employ more than 11,000 people.

The Victorian government collects a windfall from Crown’s operations, despite evidence from the 2010 federal Productivity Commission that reveals gambling results in large social and economic costs.

The state Casino Management Act 1993, the Casino Control Act 1991 and the Gaming Act, the largest piece of legislation in the state, provides for and regulates the Casino. Crown Melbourne is one of the largest casinos in the world and it is difficult to conceive it would not be allowed to operate.

Given Crown Melbourne’s serious breaches of the law, why has no-one been charged for criminal conduct?

Finkelstein’s report suggests the “special manager” could be a corporate entity, however the government has decided to legislate that the special manager is a public servant: former Victorian Anti-Corruption Commission head Stephen O’Brien QC.

He will be independent of the Victorian Commission for Gambling Regulation, which regulates Crown.

He has the power to overrule Crown board decisions and will ensure Crown complies with obligations to the regulator, Austrac and the police.

The government will create a new regulator to oversee Crown’s compliance with the law: the relationship between Crown and the regulator had become difficult due to Crown’s ongoing breaches. Changes to the Casino Control Act will now allow for Crown to be fined up to $100 million for breaches.

Finkelstein also recommended that players will need to use card facilities when spending over $1000 to ensure better tracking of money laundering — a recommendation Crown agreed to.

Crown Melbourne and its parent have removed 11 of the 12 board of directors and a slew of others have resigned, including Packer acolytes and revolving-door politicians including federal MP John Alexander and former-senator Helen Coonan.

Given Crown’s impact on politics and the Victorian economy, the two-year window can be seen as a “cooling off” period for those outraged by the state's feather-duster approach to corporate crime.

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