- »Commissioner Deems Crown Resorts Unsuitable to Hold Sydney Licence
Commissioner Deems Crown Resorts Unsuitable to Hold Sydney Licence
Crown Resorts has been found unsuitable to hold the licence for its new casino in Sydney.
The Sydney Morning Herald reports that following a public inquiry into the organisation, the findings by former Supreme Court judge Patricia Bergin were released last Tuesday following an 18-month probe into the group.
In a near 800-page report, Commissioner Bergin said that the finding of Crown’s unsuitability stemmed from evidence of money laundering at its Melbourne and Perth casinos, the arrest of 19 staff in China in 2016 and its partnership with “junket” tour operators linked to organised crime.
“The scorching light of this inquiry has exposed a number of problems that would have otherwise remained unearthed and unresolved,” Commissioner Bergin said.
The report considers what reforms Crown might have to undertake in order to be deemed fit to hold a casein licence in NSW, with its core problem being its “poor corporate governance, deficient risk management structures and processes and a poor corporate culture.”
“Crown recognises that there is a need for cultural change,” Bergin said.
“However, this must come from within Crown rather than from some proposal to the Independent Liquor and Gaming Authority in this process.”
Commissioner Bergin’s recommendations are not binding and the authority will meet later this month to consider which, if any, it should implement.
Crown was poised to open the gaming floors of its $2.2 billion resort at Barangaroo in late December, but the authority blocked it from commencing gaming operations after the group admitted to the inquiry that criminals probably laundered money at its Melbourne and Perth casinos.
Crown put its ASX-listed shares into a trading halt on Tuesday morning ahead of the report’s release.
Crown Sydney opens with little fanfare
Restaurants, bars and a six-star hotel at Crown Sydney opened in late December, but without the pomp or fanfare imagined when the 275-metre tower was first proposed eight years ago.
The Brisbane Times reported in January that the high-roller gaming rooms that underpinned the project’s viability remain firmly shut, with serious questions about if and when they will open.
The NSW gambling regulator blocked the $6.5 billion ASX-listed giant from commencing gaming operations in December after its failures to prevent money laundering at its Melbourne and Perth casinos and other probity issues were revealed during a public inquiry into the group.
Crown’s casino licence now hinges on former Supreme Court judge Patricia Bergin’s findings from the year-long investigation into the group, which was triggered by a series of reports, with the recommendations due by February 1.
Crown could lose the licence completely, or have strict conditions imposed.
Changes to Crown’s management and board could be required and Packer may have to sell down some of his 36 per cent holding in Crown to lessen what counsel assisting the inquiry called his “deleterious” influence.
But even if Crown keeps its licence, there are questions about whether Crown Sydney is viable in its current form or if the city’s tallest building could become a white elephant.
The risk, according to gaming industry experts, is that even after Australia’s international borders reopen the Chinese high rollers that were a vital part of the Barangaroo business plan are unlikely to return.
“The international VIP market is pretty much gone,” says David Green, an industry consultant who has worked with casinos and gambling regulators.
“These people won’t put their heads up again while the mainland Chinese authorities are as belligerent and antagonistic towards gaming as they are now.”
When Packer first proposed the project in 2018, he made it clear having a high-roller, members-only casino attached was crucial to its viability and that China was the biggest opportunity.
Crown promised the NSW government that Barangaroo would deliver $1 billion in tax revenue in the first 15 years of operation.
The casino would triple the value of international VIP business coming into Sydney, Packer claimed.
But in October, while giving evidence to the Bergin inquiry, he conceded that would never eventuate.
“Clearly that’s wrong but that’s what I believed at the time,” Packer told the inquiry.