Is Crown unfit to open a NSW casino?

As the inquiry into Crown Resorts continues, questions remain as to whether the ASX-listed leisure company is a suitable enterprise to hold a NSW casino licence. 

The New South Wales Independent Liquor and Gaming Authority inquiry has heard several witness accounts of money laundering allegations through Crown operated cash accounts, and of organised crime links within Crown’s junket partners. 

Video footage has also been seen of cash being handed over in Crown Melbourne’s high-roller rooms. 

The situation is reportedly so bad that major banks have refused to deal with accounts associated with the Perth and Melbourne casinos, due to concerns over structured cash deposits apparently designed to avoid reporting requirements. 

The inquiry has also alluded to poor corporate governance – a major concern for shareholders of the $6.1 billion capped casino giant. 

Evidence will be given this week via video link by James Packer as well as Crown’s high-profile directors who include Crown’s current chair Helen Coonan, former public servant, Jane Halton, and former AFL boss, Andrew Demetriou. 

Last week, Crown’s chief executive, Ken Barton, was questioned about practices within Crown Melbourne that suggest the casino had allegedly turned a blind eye to money laundering.

Alarm bells ringing 

Money laundering activities have been high on the inquiry’s agenda, particularly following information that came to light with regard to Crown’s Suncity’s cash desk, where $5.6 million of cash was found stored in a cupboard in March 2018.

Anti-money laundering officer Joshua Preston said this inordinate amount of money, set “money-laundering alarms ringing”. 

Presiding over the inquiry is commissioner and former supreme court judge, Patricia Bergin SC, who has called the activity a “debacle”. 

“The irresistible conclusion is that nothing works. This went on for years,” she said. 

“This went on from ’13, ’14, ’15, ’16 through to ’19 and nobody – and now Mr Barton is seeing things for the first time in this inquiry. This, in effect, has really reached the debacle level. 

“It is very, very troubling. I mean, Mr Barton has made a lot of concessions but at the moment it is just extraordinarily troubling.” 

Allegations of insider knowledge have also been levelled at James Packer.

The inquiry heard this month Mr Packer was privy to secret financial forecasts before he announced his plans to sell up to 19.9% of the group to Laurence Ho’s Melco Resorts. 

Mr Packer remains Crown’s largest shareholder, but no longer has a board position. 

Once the inquiry is complete, Ms Bergin will make a recommendation to the Independent Liquor and Gaming Authority, which then, in theory, makes an independent determination on the outcome. 

There are three potential outcomes: do nothing, impose conditions on the licence or direct that actions be taken to ensure the licensee becomes suitable by, for instance, changing the board or key personnel or revoke the licence altogether.

The latter is the most drastic and prior to the inquiry inconceivable. The landscape has now changed.

Crown argues that a new six-star hotel complex would be a major employer and a significant driver of tourism post COVID. 

Whether that is enough to save its bid, remains to be seen.