If Crown is unfit to hold a Sydney casino licence, what about Melbourne, and Perth?

Counsel assisting the NSW Inquiry into the suitability of Crown Resorts to operate Sydney’s new Barangaroo casino summed up this week by telling the Commissioner Crown was

not a suitable person to continue to give effect to the licence, and that Crown Resorts is not a suitable person to be a close associate of the licensee

Adam Bell SC^[1] reached the conclusion after considering the deleterious impact on the good governance of Crown Resorts caused by its dominant shareholder [James Packer’s Consolidated Press Holdings] and ultimately, Mr Packer".

He reminded the inquiry^[2] that protection of the public interest was a key objective of the NSW Casino Control Act.

The Barangaroo casino is yet to open, but Crown already operates two other Australian casinos, one in Melbourne and one in Perth, and one in London.

The Melbourne casino has been the centre of multiple^[3] whistle-blower and other allegations connected with tampering with gambling machines, associations with criminal identities and the arrest of 19 Crown staff^[4] in China in 2016.

The Sydney inquiry was initiated after the Nine network and The Age and Sydney Morning Herald published allegations^[5] about money laundering and links with criminals.

A tale of two cities

The Melbourne regulator, the Victorian Commission for Gambling and Liquor Regulation^[6], acted more quietly, initiating a still-uncompleted^[7] inquiry into the arrest of Crown staff in China in 2017 and putting its inquiry into the money laundering allegations on hold until it had seen the outcome of the NSW inquiry.

Belatedly, last month, a full eight months after the NSW hearings began, it issued Crown with a “show cause^[8]” notice relating to money laundering controls.

The state government had asked it to act as “a matter of priority^[9]” in mid 2019.

In 2017, Victoria’s auditor general identified serious issues^[10] relating to the Commission’s oversight of Crown.

It highlighted a “lack of leadership”, the second lowest staff satisfaction levels in the Victorian public sector, a lack of a “coherent organisation-wide approach to casino supervision” and insufficient attention to key areas of risk in the casino’s operations including money laundering.

In its five-yearly review^[11] of Crown’s licence in 2018 the Commission identified some concerns.

The concerns involved compliance with money laundering rules, the lack of engagement of independent directors with an oversight of the Melbourne casino, an uninspiring adoption of the responsible gambling rules, and a less than complete honouring of requests for self-exclusion.

It nevertheless concluded that it was in the public interest for Crown to maintain its license.

Fines rather than sanctions

Fines have been its the Commission’s preferred means of dealing with breaches of licence conditions.

In 2018 it fined Crown A$300,000^[12] for gambling machine tampering and $25,000^[13] in 2018 for a breach of junket rules.

It said it believed fines were enough^[14] in the light of

Crown’s past compliance history and general and specific deterrence, balanced against the level of co-operation, remorse, contrition and corrective action taken by Crown

Yet the NSW inquiry has heard evidence from James Packer and the company’s directors and management pointing to multiple continued failures in all these categories, in Melbourne^[15].

The NSW premier has signalled concern about the casino’s planned opening in December^[16], given that inquiry is not due to report until February.

West Australia’s regulator found no issues^[17] with Crown Burswood in its most recent (2018-19) annual report, but says it is monitoring the NSW inquiry^[18].

Too big to touch?

It might be that Crown has become too big to regulate, at least in Victoria.

For some reason, the company has had enormous success with deflecting criticism. Along with other gambling operators, it has recruited powerful political figures from both major parties to assist it and is a major political donor^[19].

There was ample evidence of the problems in Victoria well before the NSW inquiry identified them.

Read more: The Crown allegations show the repeated failures of our gambling regulators^[20]

The Victorian regulator’s slow and overly respectful approach might be because it felt Crown was too important to be held to account, or had too many political connections, or was too important as an employer or contributor to government revenue^[21].

Or it might be because, as the auditor suggested, it has problems with staff.

But if we are to have any faith in Victoria’s ability to regulate gambling and crime, it’ll need to do more. NSW is showing how.

Read more: Gaming the board: Crown Resorts shows you just can't bet on 'independent' directors^[22]

References

1. ^{^} Adam Bell SC (s3-ap-southeast-2.amazonaws.com)
2. ^{^} reminded the inquiry (www.nswcasinoinquiry.com)
3. ^{^} multiple (www.smh.com.au)
4. ^{^} arrest of 19 Crown staff (www.abc.net.au)
5. ^{^} allegations (www.smh.com.au)
6. ^{^} Victorian Commission for Gambling and Liquor Regulation (www.vcglr.vic.gov.au)
7. ^{^} still-uncompleted (www.vcglr.vic.gov.au)
8. ^{^} show cause (www.smh.com.au)
9. ^{^} a matter of priority (www.smh.com.au)
10. ^{^} serious issues (www.audit.vic.gov.au)
11. ^{^} five-yearly review (www.vcglr.vic.gov.au)
12. ^{^} A$300,000 (www.theguardian.com)
13. ^{^} $25,000 (www.vcglr.vic.gov.au)
14. ^{^} were enough (www.vcglr.vic.gov.au)
15. ^{^} in Melbourne (johnmenadue.com)
16. ^{^} planned opening in December (www.theage.com.au)
17. ^{^} no issues (www.dlgsc.wa.gov.au)
18. ^{^} monitoring the NSW inquiry (thewest.com.au)
19. ^{^} major political donor (www.tandfonline.com)
20. ^{^} The Crown allegations show the repeated failures of our gambling regulators (theconversation.com)
21. ^{^} contributor to government revenue (www.abc.net.au)
22. ^{^} Gaming the board: Crown Resorts shows you just can't bet on 'independent' directors (theconversation.com)