Crown is in no fit state to operate casinos

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Crown Resorts and its controlling shareholder billionaire James Packer have suffered a humiliating reprimand at the hands of the special inquiry by Patricia Bergin, SC, into their casino business but they have only themselves to blame.

The damning final report of the 10-month inquiry set up by the NSW Independent Liquor and Gaming Authority has found that Crown – through its subsidiary Crown Sydney Gaming – is not suitable to hold the licence for the second Sydney casino at Barangaroo.

The inquiry was set up on the back of explosive reports by a Herald, Age and 60 Minutes investigation, which raised allegations that Crown “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”.

In her final report, Ms Bergin, a former NSW Supreme Court judge, described as “corporate arrogance” Crown’s slow and grudging response to the allegations – some of which were discussed internally six years ago.

She said it took 14 months after the Herald’s stories were published before Crown appointed an external investigator to examine the claims.

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Perhaps more staggeringly, it was only after 10 months of public hearings, which included “devastating” evidence about the use of its accounts for money laundering, that Crown decided to train directors on their obligations – with a basic, one-hour online course. Ms Bergin described this as “unedifying”.

Commissioner Bergin’s report found that despite the partial overhaul of the board that occurred in January last year, Crown is still nowhere near ready to take up a licence.

The report, which is not a full judicial inquiry, was tabled in Parliament to shield it from potential defamation proceedings. It made adverse findings against current directors – chief executive Ken Barton, former AFL boss Andrew Demetriou and Michael Johnston, a long-time Packer lieutenant. Commissioner Bergin said NSW regulators should have very serious doubts that Crown could ever be considered a “suitable person” to run a casino while they remained on the board.

She went on to say that while Crown was synonymous with the Packer “name”, there was an option for the state regulator to force Mr Packer to sell down his current shareholding of 36 per cent to reduce his influence.

Furthermore, she said the regulator should have the power to limit a shareholder’s stake to 10 per cent if it deems he (or she) is unsuitable.

Mr Packer himself told the inquiry his behaviour in sending a threatening email to a business associate after the failure of a privatisation bid in 2015 was “disgraceful” and “shameful”. He told the inquiry he could not remember many key incidents because he was on strong medication for bipolar disorder that was diagnosed in 2016. Ms Bergin said this was “a flawed attribute” for a close associate of a company that holds a casino licence.

While many looked to the report to clarify the future of the Barangaroo casino, its fate must remain in doubt for some time. NSW authorities must insist that Crown’s gambling operations not commence at Barangaroo until everyone involved can be satisfied it is a suitable licensee. Ms Bergin has also called for the establishment of a separate casino regulator with stronger powers than the ILGA to police Crown if it retains its licence.

The Bergin inquiry prompted Victorian gaming authorities to open an inquiry into its Melbourne casino, and the same should occur in Perth, where Crown also operates. Many of the breaches cited in Ms Bergin’s report occurred on their territory.

The delay in opening a new Sydney casino will be a blow to the economy and the precinct surrounding it, but this is unavoidable. Crown’s corporate culture and governance must be reformed completely before it can be trusted.

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Source: Thanks smh.com