Crown pleads to open casino and run ‘working test’ to fix problems

Crown Resorts has claimed the best way to prove it is fit to hold the licence for its new Sydney casino is to throw the doors open under close supervision and address shortcomings through a “working test”.

The proposal to the NSW Independent Liquor and Gaming Authority (ILGA) inquiry on Thursday formed part of desperate attempt to salvage Crown’s $2.2 billion Barangaroo casino, a day after the gambling authority spiked plans for it to open next month.

Crown says a "working test" would demonstrate it has cleaned up its act.
Crown says a “working test” would demonstrate it has cleaned up its act.Credit:Getty

Crown’s barrister Neil Young, QC, told Commissioner Patricia Bergin that if she finds Crown unsuitable to hold a licence it was not necessary to delay operations during a “conversion period” to clean up its act.

Instead, he said Crown should open in Sydney under ILGA’s close supervision while it implements a suite of reforms including new anti-money laundering controls, a management restructure and a review of the company’s culture.


“Many of the matters that the authority may wish to be satisfied about are going to be matters that require a ‘working test’,” Mr Young said during his final submissions.

“Some of them are best addressed in the context of the way in which the casino operates, by way of close oversight [and] review of those operations.”

James Packer's legal team laid the blame for the China arrests at the feet of executives including Barry Felstead, seen here in 2016.
James Packer’s legal team laid the blame for the China arrests at the feet of executives including Barry Felstead, seen here in 2016. Credit:Philip Gostelow

Mr Young said that could include ILGA stationing inspectors on its gaming floors or Crown issuing daily reports to the regulator, which would be followed by in-depth audits and reviews.

ILGA chairman Philip Crawford said on Wednesday the authority would not allow Crown to open the casino until the Bergin inquiry delivers its report, which is due by February.

Under the inquiry’s terms of reference, if Commissioner Bergin finds Crown an unsuitable licence holder she must also report on what – if anything – Crown can do to become suitable.

Mr Young rejected submissions from counsel assisting that Crown should address the “deleterious” influence of its major shareholder James Packer over corporate governance by restricting his board representation and voting power.

Crown’s relationship with Mr Packer, who owns 36 per cent of the company, and his private company Consolidated Press Holdings was now “stock-standard”, Mr Young said, after they tore up agreements allowing the sharing of confidential information and the provision of services to Crown by CPH executives.

Meanwhile on Thursday it was revealed that Crown’s outgoing Australian Resorts chief executive Barry Felstead hired his own legal team to argue against a finding that he failed “without justifiable reason” to alert Crown’s board about China’s crackdown on foreign casinos before 19 employees were arrested there in 2016.

Mr Felstead’s lawyer Joanne Shepard said her client – who is being made redundant after a disastrous appearance at the inquiry earlier this year, and who Mr Packer’s legal team partly blamed for the arrests – was not trying to avoid responsibility for his mistakes, but said they were made in “good faith”.

“The matters now put against Mr Felstead were in fact escalated to board members either by Mr Felstead or by others,” she said.

That included Mr Felstead telling Crown director and CPH executive Michael Johnston about the government crackdown and that police detained and questioned a Crown employee in mid-2015.

Mr Felstead is the second Crown insider, following former director Ben Brazil, to hire their own legal teams in an effort to avoid the inquiry making adverse findings against them.

The year-long inquiry, which was sparked by a series of reports by this masthead last, will conclude its public hearings on Friday with final submissions from counsel assisting.

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