Crown inquiry LIVE updates: Crown found not suitable to hold Barangaroo casino licence
Summary
- The NSW government has released a long-awaited report into the future of Sydney’s second casino licence following an 18-month royal commission-style inquiry headed by former Supreme Court judge Patricia Bergin.
- The Barangaroo gaming licence was granted in 2014 and is held by Crown Sydney Gaming, a subsidiary of Crown Resorts Limited. The controlling shareholder of Crown Resorts is billionaire James Packer.
- Commissioner Bergin inquired into whether Crown Sydney was a “suitable person” to hold the licence and whether Crown Resorts was a suitable person to be a “close associate”. She found they were not.
- Commisssioner Bergin’s terms of reference explicitly referred to reports by Nine, The Sydney Morning Herald and The Age which raised allegations that Crown Resorts, its agents, affiliates or subsidiaries “engaged in money-laundering; breached gambling laws; and partnered with junket operators with links to drug traffickers, money launderers, human traffickers, and organised crime groups”.
- Commissioner Bergin deals in the report with the steps that could be taken to make Crown a “suitable person” to hold the licence.
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‘Real power exercised by Packer’: report
By Michaela Whitbourn
Commissioner Patricia Bergin says in her report into the future of Sydney’s second casino licence that it is “obvious” that billionaire James Packer exercises the “real power” at Crown Resorts.
Mr Packer is not on the board of the Crown Resorts (which is the parent company of Crown Sydney Gaming, the holder of the Barangaroo casino licence) but holds a controlling 36 per cent shareholding in it.
Commissioner Bergin said he exercised the power “both by reason of his personality and also the
somewhat supine attitude adopted by Crown’s operatives”.
She suggests the NSW gaming regulator, the Independent Liquor and Gaming Authority, consider imposing a condition on Crown Sydney Gaming and Crown Resorts that any plan to enter into a commercial arrangement with Mr Packer or his private company “either generally or for sharing of confidential information must be notified to and approved by the Authority prior to such entry”.
She also recommends that NSW’s Casino Control Act be amended to provide that a person may not
acquire, hold or transfer an interest of 10 per cent or more in a casino licensee in NSW or any holding company of a licensee without the approval of a new casino regulator.
WA regulator won’t take immediate action on Crown
By Michaela Whitbourn
After the NSW government tabled a damning report finding a Crown Resorts subsidiary is not a “suitable person” to hold Sydney’s Barangaroo casino licence, federal MP Andrew Wilkie called for Crown to face similar inquiries over its casino licences in Western Australia and Victoria.
But Hamish Hastie reports from Western Australia that the WA gambling regulator won’t consider the NSW report until it meets in two weeks’ time.
The Bergin report was tabled in the NSW Parliament on Tuesday and found Crown Sydney Gaming was not suitable to hold Sydney’s second casino licence and its parent company Crown Resorts was not a “suitable person” to be a close associate.
However, it did not recommend the licence be revoked and has suggested the companies may make changes to become suitable.
Junket operators had links to organised crime: report
By Michaela Whitbourn and Patrick Hatch
The Bergin report was explicitly tasked as part of its terms of reference with examining whether a Crown Resorts subsidiary was a “suitable person” to hold Sydney’s second casino licence, with reference to allegations aired in media reports.
The terms of reference referred to reports by the Nine Network, The Sydney Morning Herald and The Age – all owned by Nine Entertainment Company – that Crown engaged in money-laundering and “partnered with junket operators with links to drug traffickers, money launderers, human traffickers, and organised crime groups”.
Crown’s relationship with junkets – which arrange for wealthy Chinese gamblers to travel to overseas casinos – is what got it in this mess in the first place, after Nine mastheads revealed in 2019 that many of its most important junket partners were closely linked to powerful Asian crime gangs.
Commissioner Patricia Bergin examined the junket allegations in her report and concluded that “the veracity of the Media Allegations that there were Junket operators with which Crown partnered that had links to organised crime is established”, but she did not find the company was wilfully blind or recklessly indifferent to this.
“In August 2020 the Crown Board resolved to suspend its relationships with all Junket operators, and on 17 November 2020 decided to end its Junket operation altogether subject to certain conditions,” the report said.
Commissioner Bergin recommended that the NSW Casino Control Act be amended to prohibit casino operators in NSW from dealing with junket operators.
“The extant and developing threats of the infiltration of organised crime into casinos is such that the [NSW gaming] Authority and the Government would be justified in prohibiting the operation of Junkets in New South Wales casinos,” the report said.
“This is really the only way that the Authority, the Government, the casino operators and the community can be sure that such infiltration does not occur through these mechanisms.”
Commissioner Bergin said Crown had adopted an approach that it was “deeply wronged by a shocking and deceptive media campaign against it”, but the junket allegations were true.
Crown Resorts considering damning report
By Patrick Hatch and Michaela Whitbourn
Crown Resorts has released a brief statement saying it is currently considering the Bergin report, which found its subsidiary Crown Sydney Gaming is not a “suitable person” to hold Sydney’s second casino licence.
Commissioner Patricia Bergin indicated both companies may be able to adopt changes that will make them suitable to hold the licence or to be a close associate of the licensee.
The future of James Packer’s controlling 36 per cent stake in Crown Resorts is not the subject of explicit findings, but Commissioner Bergin says the NSW gaming regulator may consider whether he remains an approved “close associate” of the licensee.
“Crown will work with the New South Wales Independent Liquor and Gaming Authority (ILGA) in relation to the findings and recommendations of the Inquiry Report as contemplated by the regulatory agreements between Crown, ILGA and the State of New South Wales,” the company said in a statement to the ASX.
Future of James Packer’s controlling stake in Crown unclear
By Patrick Hatch and Michaela Whitbourn
Commissioner Patricia Bergin says in her report into the future of Sydney’s second casino licence that “the Crown name is for many people synonymous with the Packer name”.
Packer is a controlling shareholder of Crown Resorts, with a 36 per cent stake in the company. Crown Resorts is the parent company of Crown Sydney Gaming, the company that was granted the Barangaroo casino licence in 2014.
A major question is whether Packer will be allowed to keep his Crown shareholding after the findings of the Bergin report, and the commissioner does not make any direct recommendations on this point.
However, she says the NSW gaming regulator will have to consider whether he remains an approved “close associate” of Crown Sydney Gaming in light of the explosive revelation that he sent a threatening email to a Melbourne businessman in 2015 when a privatisation deal fell apart.
Mr Packer told the inquiry that his behaviour – which he agreed was “shameful” and “disgraceful” – was the result of his bipolar disorder.
“There is no doubt that the conduct was both serious and disgraceful,” Commissioner Bergin says.
“Equally there is no doubt that it was conduct that was inconsistent with that expected of a director of a public company and certainly a close associate of the Licensee. There is obviously no doubt that Mr Packer has suffered ill health since that time.”
Commissioner Bergin also recommends that NSW’s casino laws be changed so that no single shareholder can hold, acquire or transfer an interest of 10 per cent or more in a casino licensee without being approved by the state’s casino regulator.
She says Mr Packer’s threatening email in 2016 and his evidence that he “forgot about the Undertaking that Crown had provided to the Authority in relation to preventing the late [Macau casino kingpin] Mr Stanley Ho from acquiring an interest in Crown would be a proper basis upon which the Authority could decide” to consider whether he remains a close associate of Crown Barangaroo.
New casino regulator recommended
By Michaela Whitbourn
While the Bergin report focuses squarely on Sydney’s second casino licence and its holder, the Crown Resorts subsidiary Crown Sydney Gaming, its recommendations are aimed at systemic reform.
Commissioner Patricia Bergin recommends NSW establish the Independent Casino Commission, a “dedicated, stand-alone, specialist casino regulator with the necessary framework to meet the extant and emerging risks for gaming and casinos”.
The ICC would have the powers of a standing royal commission and each casino operator would be required to “engage an independent and appropriately qualified Compliance Auditor approved by the ICC, to report annually to the ICC on the casino operator’s compliance with its obligations under all regulatory statutes … and the terms of its licence”.
Commissioner Bergin also recommends NSW’s Casino Control Act be amended to amended to include a new object of “ensuring that all licenced casinos prevent any money laundering activities within their casino operations”.
Call for inquiries into Crown licences in Victoria, WA
By Michaela Whitbourn
Andrew Wilkie, independent MP for the federal seat of Clark in Tasmania, has seized on the findings of the Bergin report to push for Crown Resorts to face inquiries into its casino licences in Victoria and Western Australia.
“Surely it’s self-evident that Commissioner Bergin’s findings mean the company is unfit to continue to operate any casino in Australia,” Mr Wilkie said.
In her report today into Sydney’s second casino licence, Commissioner Patricia Bergin found Crown Sydney Gaming, a subsidiary of Crown Resorts, was not a “suitable person” to hold its Barangaroo casino licence. However, she set out potential pathways to the company converting itself into a suitable person to keep the licence.
Mr Wilkie said he “call[ed] upon the premiers of Victoria and Western Australia to suspend Crown’s casino licences in their jurisdictions, and to immediately establish commissions of inquiry to get to the bottom of what is now a genuinely national issue.
“I also call on the Prime Minister to revisit my repeated calls in the Federal Parliament for a Royal Commission into the casino industry. These have so far been blocked by both the Government and the Opposition, and the question hangs heavy in the air, ‘What have they got to hide?’”
‘Serious issues’: NSW government considering Bergin report
By Alexandra Smith and Michaela Whitbourn
Customer Service Minister Victor Dominello, who oversees the regulation of gambling in the state, welcomed the Bergin report and said it raised serious issues relating to organised crime and money laundering in NSW.
“In 2019 the Independent Liquor & Gaming Authority commissioned this report giving the Honourable Patricia Bergin SC the powers of a Royal Commission,” he said.
“I would like to thank the Commissioner, her assisting counsel and the Independent Liquor and Gaming Authority for their tireless work. Among other things, the report raises serious issues relating to organised crime and money laundering in our community. We will consider its recommendations very carefully before providing a formal response in due course.”
Findings against other Crown directors
By Patrick Hatch
Crown Resorts chief executive Ken Barton is not the only Crown director to have findings made against him in the inquiry into the future of Sydney’s second casino licence.
Inquiry chief and former Supreme Court judge Patricia Bergin says it is unlikely Crown will be able to reform itself to become a suitable licence holder while Andrew Demetriou and Michael Johnston remain as directors of Crown Resorts, which is the parent company of the Barangaroo casino licensee, Crown Sydney Gaming.
Demetriou, a former AFL boss, made a disastrous appearance at the inquiry in October, in which he was caught reading from secret notes and had his independence from major shareholder James Packer called into question.
“This was a most unedifying performance by Mr Demetriou,” Bergin says in her report.
“Unfortunately it reflects very badly on his judgment first of all to take notes into the witness box (albeit in a virtual setting); then to read from them; but more importantly to deny that he was reading from them.
“It is difficult to understand what might reasonably be made of this quite bizarre performance. Sadly the balance of Mr Demetriou’s evidence is affected by it. The Authority would be justified in lacking confidence in placing reliance upon Mr Demetriou in the future.”
Meanwhile Bergin says that Michael Johnston – a long time Packer family lieutenant who represents James Packer on Crown’s board – exacerbated the corporate governance failures at Crown due to his dual loyalties to James Packer’s private company Consolidated Press Holdings (CPH) and Crown.
“The lines of reporting were blurred; risks were not properly identified; identified risks were not properly notified; conflicts or potential conflicts were not recognised; and the corporate needs of Crown were not given precedence over the corporate needs or desires of CPH,” Commissioner Bergin says.
Commissioner Bergin says that “it is suggested that in the circumstances of the findings against Mr Barton, Mr Johnston and Mr Demetriou, the [NSW gaming] Authority would be justified in entertaining very serious doubts that Crown could be converted into a suitable person under the Casino Control Act whilst they remain as directors; or that the Licensee could be converted into a suitable person under the Casino Control Act whilst Mr Barton remains as a director”.
Commissioner takes aim at Crown CEO
By Patrick Hatch
Putting it mildly, this report does not make for pleasant reading for Crown Resorts – and Commissioner Patricia Bergin has singled out its chief executive Ken Barton for particular criticism.
She says in her hotly-anticipated report into the future of Sydney’s second casino licence that Mr Barton is “no match for what is needed at the helm of a casino Licensee” and that the NSW gaming regulator “would be justified in concluding that it cannot have any confidence in dealing with Mr Barton as a director of the Licensee or Crown”.
Mr Barton not only chief executive of Crown Resorts but a director of Crown Sydney Gaming, a subsidiary of Crown Resorts and the holder of the casino licence.
Commissioner Bergin’s concerns about Mr Barton – Crown’s longstanding finance boss who was elevated to CEO only a year ago – relate to his knowledge and failure to act on money laundering happening in Crown bank accounts.
The Herald and The Age exposed money laundering happening in the so-called Southbank and Riverbank accounts in 2019.
But the inquiry revealed that Mr Barton knew ANZ Bank had raised concerns about money laundering as far back as 2014 and lobbied to keep the accounts open. Bergin said this was “totally inexplicable”.
Bergin says that Mr Barton’s actions at Crown’s 2019 AGM, where he failed disclose that he was sending almost daily financial updates to major shareholder James Packer, were “appalling”.
Federal investigators in Australia traced money from a number of suspected or convicted drug traffickers and money launderers flowing into the bank accounts of the two companies, Southbank Investments Pty Ltd and Riverbank Investments Pty Ltd, between 2012 and 2016, according to former officials.
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