‘Humility, contrition’: Crown faces failings as Melbourne CEO exits
Crown Melbourne chief executive Xavier Walsh will stand down on August 20 and will depart the company entirely at the end of the year, as the casino’s bloodletting continues in the wake of the Victorian Royal Commission.
The casino giant told investors this morning that Mr Walsh would cease his role as head of Crown Melbourne in just under three weeks, with an interim chief executive set to be appointed in consultation with the Victorian Commission for Liquor and Gambling Regulation.
The announcement came ahead of the final day of hearings into Crown’s Melbourne operations, where its counsel Michael Borskey QC said he was instructed on behalf of Crown to apologise to the community for its failings.
Crown was deemed unsuitable to hold a casino licence in New South Wales in January of this year, while separate royal commissions in Victoria and Western Australia have placed further scrutiny on whether the company should run operations in those states.
The Victorian review has heard several explosive allegations about Crown Melbourne’s operations, including evidence that the company had been making illegal deductions from its poker machine revenues since 2012, meaning it underpaid tax for almost a decade.
In a final responsive submission to the royal commission on Tuesday, Mr Borsky told commissioner Ray Finkelstein QC that Crown’s management accepted many of the failings outlined with “humility and contrition”.
However, he argued in the company’s final statements that to cancel the company’s licence would not be in the public interest of the state and could have an impact on thousands of the company’s staff.
If the licence were to be cancelled, “Crown would likely be in a position of having very substantial debt obligations becoming immediately due and payable,” Mr Borsky said.
Mr Finkelstein, in his response to the statement, questioned the magnitude of the risk posed to Crown’s staff if the commission recommended a cancellation of its Victorian licence, saying that the business was profitable and could find a buyer.
“If it’s a viable business, there is always someone to step in,” he said.
Mr Walsh’s exit from the casino comes in the wake of directors of Crown expressing doubt over whether he was fit to lead the company, after he downplayed the evidence suggesting the group was dodging millions in taxes to the state.
Also on Tuesday morning, the Victorian state government revealed an overhaul of gambling regulations, confirming plans to split the Victorian Gambling and Casino Control Commission and create a new dedicated casino regulator devoted solely to reviewing the conduct of casino operators.
“This division will have specialist leadership and staff, as well as access to shared resources and gambling and licensing expertise from the broader regulator,” a statement from the office of Premier Daniel Andrews confirmed.
Crown shares opened up 0.7 per cent on Tuesday morning, just as a session began to hear final responsive submissions from the state and Crown into the Victorian Royal Commission, and jumped as much as 1.3 per cent to $9.07 in mid-morning trade.
Mr Borsky told the royal commission that Crown executive chairman Helen Coonan and the company’s directors had reflected deeply on the casino’s failings and accepted the evidence given in the Victorian hearings showed “the huge challenges confronting Crown and how Crown must respond”.
Mr Walsh had only been in the chief executive’s chair since December 2020. Mr Walsh first joined the business in 2008 and has worked in the United States as chief operating officer of Cannery Casino Resorts.
A Crown Resorts spokeswoman declined to comment on Mr Walsh’s reasons for leaving the role.
with Alex Druce, Paul Sakkal and David Estcourt
Emma Koehn reports on healthcare companies for The Age and The Sydney Morning Herald. She is based in Melbourne.
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