Victoria’s Royal Commission into Crown Resorts has found the company unsuitable to operate Crown Melbourne. However, in a report handed down to the state government on Tuesday morning, Commissioner Ray Finkelstein has refrained from immediate cancellation of the license, opting instead to implement a monitor to oversee Crown’s return to suitability.
The Finkelstein Report found Crown Melbourne is not a suitable person to continue to hold the casino license under the Casino Control Act, contravened the Casino Control Act and the Gambling Regulation Act and contravened provisions of the Management Agreement and the Casino Agreement. It also found that Crown Resorts is not a suitable associate of Crown Melbourne.
But rather than cancel the license, Commissioner Finkelstein has recommended that “the Casino Control Act be amended to create the position of a Special Manager with power to oversee and exercise control over the affairs of a casino operator who has been found to be unsuitable.
“In relation to Crown Melbourne, the Special Manager should be appointed to oversee and control its affairs for a period of two years. At the end of that period, the regulator should determine whether it is clearly satisfied that Crown Melbourne has become a suitable person to hold its casino licence and that it is in the public interest for it to do so.”
He added, “If, in two years, the regulator decides that Crown Melbourne is a suitable person to continue to hold its casino licence, it is likely that Crown Resorts will be a suitable associate of Crown Melbourne.”
Commissioner Finkelstein has also called for the Casino Control Act to be amended to require James Packer’s Consolidated Press Holdings (CPH) to reduce its shareholding from 37% to below 5%. The report suggests CPH is unsuitable to be an associate of Crown Melbourne and would become an associate once an agreement it reached with the NSW regulator in April expires.
In response to the Finkelstein Report, the Victorian Government issued a statement confirming it accepts the Royal Commission’s findings and is immediately implementing nine of the 33 recommendations, with a Casino and Gambling Legislation Amendment Bill 2021 to be introduced to Parliament immediately.
Among the amendments contained in the bill are a ban on junkets, an increase in the maximum financial penalty that can be imposed for breaches of the Casino Control Act to AU$100 million (US$75 million) and the removal of a provision under which Crown must be awarded compensation for any changes made to regulatory arrangements.
The Government added it will also go beyond the recommendations of the Royal Commission and implement laws that will automatically cancel Crown’s licence unless the regulator is clearly satisfied Crown is suitable to continue operating Melbourne’s casino.
“The Government accepts all of the findings of the Royal Commission and we are taking immediate action to hold Crown to account and restore the public’s trust in the casino operator,” said Victoria’s Minister for Consumer Affairs, Gaming and Liquor Regulation, Melissa Horne.
“Since receiving the final report from the Royal Commission, we’ve prioritised the most urgent actions to ensure we have a casino operator that upholds the highest standards of integrity and honesty.”
The decision comes after Counsel Assisting the Royal Commission into Crown Melbourne had asked in July for Crown to be unsuitable to retain its casino license on public interest grounds and breaches of Victoria’s Casino Control Act.
Adrian Finanzio SC said at the time that, “The misconduct that has given rise to the loss of confidence and trust is at the most serious end of the spectrum, including systemic and repeated failings as an AML/CTF reporting entity, a provider of responsible gaming, a casino that guards against organized crime influences at the casino, a taxpayer, an employer who failed to prioritize employee safety and a regulated entity who was more concerned with the risk of getting caught than compliance.”
These, he said, “are all matters which weigh heavily in favor of a finding that public interest be better served by not having this licensee.”
In response, Crown had called instead for an independent monitor to oversee its return to suitability, with lawyer Michael Borsky SC arguing that loss of license was against the public interest.
“We submit that the more practical, effective and efficient course is for Crown Melbourne to continue to operate as an integrated resort under license and upon whatever conditions this commission may consider appropriate to recommend, including at a minimum that Crown be under the supervision of an independent monitor or supervisor as it works to continue its program of reforms,” Borsky said.