On March 26, Australian operator Crown Resorts and its stakeholders breathed a long-held sigh of relief after the Victorian Gambling and Casino Control Commission (VGCCC) announced that the casino has returned to full suitability to hold its gaming license, two-plus years after it was initially suspended.
VGCCC Chair Fran Thorn issued a lengthy statement praising the progress made by the company but also warning that the license reinstatement was not to be construed as a free pass to return to its previous misdeeds.
Thorn said that the commission has “observed a different Crown Melbourne emerging with a clear understanding of the privilege and obligations of holding the Melbourne Casino License,”while also contending that “Crown is not and will never be too big to fail.”
In February 2021, the Victorian government announced that the casino would be subject to a regulatory investigation, headed by Ray Finkelstein AO QC.
Finkelstein’s report, known as the Royal Commission, was delivered in October of that year, and outlined numerous shortcomings related to anti-money laundering (AML), harm minimization, illicit relationships with junkets, tax issues and more.
Crown Melbourne was then deemed unsuitable for full licensure and was given two years to return to compliance under the supervision of a third-party “special manager,” Stephen O’Bryan.
O’Bryan was appointed to the newly created role on Jan. 1, 2022 and will continue to serve through June 30 of this year.
In announcing the reinstatement, Thorn asserted that “The findings of the Special Manager are that Crown Melbourne has addressed the systemic failings identified by the Royal Commission.”
Once O’Bryan’s term is complete, the VGCCC will continue to have close oversight of the property, and will even reportedly form a new division dedicated solely to casinos. The commission will also release an updated report in the coming months that will outline Crown’s new legal and social responsibilities moving forward.
Aside from internal changes and restructurings, another feather in Crown’s cap was the fact that it was sold for US$6.3 billion in June 2022 to U.S.-based investment firm Blackstone, separating the company from its former owner James Packer, the controversial billionaire media mogul who faced his own share of scrutiny over the years.
“Crown is under totally new management and ownership, so it’s not the same people who were there that allowed the sins of the past to happen,” Thorn said.
Mike Volkert, CEO of Crown Melbourne, called the ruling “one of the most significant milestones” in the history of the company, and applauded the work that has been put in over the last two-plus years to get to this point.
By and large, the goal of reinstatement has been reached, but there’s no doubt that the company has paid a heavy price for its previous shortcomings, including sweeping changes across its board of directors and executive staff.
It also racked up over US$442 million in fines related to regulatory violations in Victoria and elsewhere, including a US$300 million fine from federal financial regulators AUSTRAC, which constituted the third-largest corporate fine in the country’s history.
