Two high-ranking Crown Resorts executives are on their way out as the Australian casino company struggles to maintain its gaming license in Victoria.
Executive Chairman Helen Coonan is likely to leave by the end of this month. CEO Xavier Walsh will “cease his role” by August 20, but according to Crown, “remain available to assist the company until his ends on 9 December 2021.”
In closing submissions before Victoria’s Royal Commission into Crown Melbourne’s suitability, Crown lawyer Michael Borsky asked the commissioner to appoint an independent monitor for Crown instead of revoking its license. He also argued that Coonan should not be found an “unsuitable person,” saying, “No conduct submitted by Counsel Assisting reflects on her character, honesty or integrity.”
Borsky also said the commission “need and ought not make any finding” on Walsh’s suitability, since he’s leaving.
Throughout the investigation, commissioners have heard a landslide of testimony about the company’s lax approach to anti-money laundering standards, its seeming indifference to responsible gambling, a corporate culture based on profits above integrity, and tax evasion.
If the commission rejects the suggested monitor, Crown proposed a Plan B: a finding of unsuitability, with a second chance to make good. Again, said Borsky, “This would be safeguarded by the appointment of an independent monitor or supervisor with all the functions and powers necessary to scrutinize and supervise Crown along the way towards implementation of all of the reforms.”
Royal Commissioner Ray Finkelstein replied that both plans are “risk-free options … where there is no real consequence of wrongdoing” for Australia’s largest casino company.
“You pay unpaid taxes, pay some cost, but don’t actually suffer any consequence,” he griped. “That is, you can commit wrongs of various kinds for a decade then come along and say, ‘Well we’ve fixed it, don’t worry about it.’ That’s really not how the system works, and it’s not what the public expects.”
According to Inside Asian Gaming, Finkelstein has already looked into how Crown Melbourne’s assets could be broken up if operations are absorbed by another company. He said both the casino and the main Crown Towers hotel could be sub-leased while other hotel assets remain under Crown’s control.
Borsky argued such a scenario would be against the public interest and that the commission should “not assume that gaming and non-gaming operations can efficiently or even practically be separated.
“The result, in our submission, of a disintegration of the integrated resort would be an inferior offering for customers, employees and stakeholders and a substantially diminished offering for the state of Victoria,” he said.
“We submit that the more practical, effective and efficient course is for Crown Melbourne to continue to operate as an integrated resort under license and upon whatever conditions this commission may consider appropriate to recommend, including at a minimum that Crown be under the supervision of an independent monitor or supervisor as it works to continue its program of reforms.”
Borsky acknowledged the evidence justifies a finding of unsuitability. Crown was found unsuitable in New South Wales, and its VIP casino in Sydney was not permitted to open.
“Crown’s current leadership recognizes that, when viewed in aggregate and holistically, the failings in Crown that have been revealed,” said Borsky. He said, “Crown accepts” the findings “are significant (and) do render Crown’s suitability fairly in question.”
In a related outcome, the Victorian government has announced plans to establish a dedicated gaming regulator. The Victorian Gambling and Casino Control Commission (VGCCC) will take over regulation of gaming from the Victorian Commission for Gambling and Liquor Regulation (VCGLR).
“We said we’d take action to strengthen casino oversight and that’s what we’re doing with the establishment of a new gambling and casino regulator,” said Minister for Consumer Affairs, Gaming and Liquor Regulation Melissa Horne.
“Unethical practices in the gambling industry won’t be tolerated—the Victorian Gambling and Casino Control Commission will provide robust regulation of the Melbourne casino and wider gambling activity across the state.”
Reuters said Crown “played the pandemic card” when it warned that the loss of its license could cost thousands of jobs in the area in a time when Covid-19 is wreaking havoc on world economies.
In an editorial, CDC Gaming Reports Managing Editor Ben Blaschke wrote that the Crown debacle “highlights the dangers of slashing regulatory budgets.”
“While Crown’s actions around money laundering, gaming taxes and responsible gambling have rightly raised serious alarms during the Royal Commission, many of its systemic issues are said to have been exacerbated by negative consequences of the state’s move from a specialized to a rationalized regulatory model.”
