In the aftermath of the Bergin Report, which denied Australian casino giant Crown Resorts the right to open its casino in Sydney, New South Wales (NSW), the state of Victoria has now begun its own investigation of the company, and plans to set up an independent casino regulator.
According to Intergame.com, Melissa Horne, Victoria’s minister for Consumer Affairs, Gaming and Liquor Regulation (VCGLR), has commissioned a review of requirements for regulation of money laundering and junket operations in the state. Victoria will also establish a Royal Commission to investigate Crown’s operations in Melbourne, the home of its flagship property.
“The reports from New South Wales’ ILGA Inquiry were incredibly concerning, which is why we’re establishing a Royal Commission to get the answers we need about Crown Melbourne,” Horne said in a statement.
“The Royal Commission will establish the facts and the Government and the VCGLR will take any necessary action at the conclusion of the investigation. We will not tolerate illegal behavior in our gaming industry.”
Retired judge Raymond Finkelstein will lead the review, and is expected to hand down his recommendations by August 1.
Western Australia, home of Crown Perth, has also announced a probe into the company’s operations; its Gaming and Wagering Commission (GWC) has ordered Crown Perth to cease all junket and premium-player activity.
According to a Crown filing on the Australian Stock Exchange, the ban includes junket operations, or “table games activity with patrons who are non-residents of Australia with whom Crown Perth has the arrangement to pay the patron a commission, or provide transport, accommodation, food, drink or entertainment, based on the patron’s turnover or otherwise calculated by reference to such pay.”
New South Wales has also demanded a ban on junkets as a result of the Bergin Report, which determined that millions of dollars had been laundered at Crown casinos. The 18-month probe led to the ouster of multiple Crown directors as well as CEO Ken Barton; in NSW, Crown is on notice that it must essentially “blow itself up” in order to win the right to open the casino at its multibillion-dollar Sydney resort.
Interim CEO Helen Coonan assured investors in a conference call that “there will be change, real change and important change” at Crown. “Everyone from the board down is committed to reform. … We don’t underestimate the scale of the challenge we face.”
Commissioner Patricia Bergin, the former judge who headed up the NSW review, says anyone with more than a 10 percent stake in the company must meet the same standards of integrity as the licensee—including Crown honcho James Packer, who owns 37 percent of shares. Bergin called it “intolerable” that the billionaire did not keep his casino operations “free from criminal influence and exploitation.” She also said Packer made a “disgraceful and shameful threat” to a businessman who advised that Packer’s company go private.
But selling the company shouldn’t be a problem, according to Kelly Amato, Fitch Ratings’ director of Southeast Asia Industrials.
“We would expect that other casino and gaming operators around the world would have looked at Crown’s assets, purely because they have such strong domestic operations,” Amato told ABC News.
“With a limited number of licenses and the governments across Australia indicating that they don’t want to issue any more licenses, this is one of the few ways that those overseas operators will be able to get into Australia,” she pointed out.
Meanwhile, last week another Crown director resigned under pressure. At first Harold Mitchell resisted calls to step down, but bowed to pressure, and on February 22 tendered his resignation.
Mitchell is the fourth director to make his exit since the release of the Bergin Report, following Guy Jalland, Michael Johnston and Andrew Demetriou.
