What Can Australia Learn from the Crown Resorts Debacle

There are significant and damning questions being posed towards Crown Resorts this month as the inquiry into their Sydney casino license draws to a close. We look at some potential learnings that the Australian people can take from this entire debacle, and long-term effects that will be felt across the gambling industry in this region.

Australian Gambling Roulette Wheel.

Crown Resort are once again under fire for illegal activity centred around their Sydney and Melbourne casino branches, several inquiries have begun to investigate their business affairs. ©GregMontani/Pixabay

The removal of their gambling license is a major blow for Crown Resorts who recently spent over $1.7bn on a new gaming complex which began operating its hotel and retail spaces in December. It puts into question whether Crown will be able to open it’s already built casino in Sydney, Australia’s largest city. It could potentially harm the company for years to come as commission appeal processes are often long and monotonous.

Crown Resorts have been flogged with allegations of illegal activity for years. In 2016, the company’s joint venture with CrownBet pleaded guilty to five counts of breaching laws by publishing unlawful betting advertising that offered inducements for NSW residents to gamble. In 2019 they incurred a similar inquiry when they illegally advertised gambling to mainland China violating their national law.

The head commissioner Patricia Bergin – a former judge- concluded that Crown should only be considered for approval after it makes “Radical reforms”. Their new Barangaroo tower on Sydney Harbor is still yet to be approved for business. The commission suggested that the Crown Resorts executive team should be removed in favor of a reputable group of leaders who knew how to conduct “Honest dealings”.

On Wednesday, two of Crown Resorts directors quit the company after the inquiry’s findings confirmed cases of money laundering as well as links to organized crime. Crown is now under fire from lawmakers, who have called for removing their Melbourne and Perth licenses. The firm has halted trading on the Australian Securities Exchange.

What Did the Inquiry Reveal?

The New South Wales Supreme Court public inquiry was set up in 2019 after the Australian media published allegations of criminal activity directed at Crown Resorts Melbourne venue. It was the country’s largest casino before the Sydney branch’s construction. Those reports were combined with an earlier sale of Crown shares to Asian casino operator Melco, and this prompted regulators to investigate.

Patricia Bergin’s report included a number of scathing statements reflecting Crown’s lack of ethical concern over the last few years. Commissioner Bergin said organized crime syndicates had “infiltrated” Crown’s casinos and the company had breached several gambling laws because of this connection.

The inquiry into Crown said that Crown Resorts were “facilitating money laundering“, this was closely related to the removal of directors who were alleged to have deep connections to Australia crime operations. In particular, Crown’s Melbourne branch seemed to be the focus of several criminal groups with “hundreds of thousands of dollars brought in the casinos in cooler bags and shopping bags and exchanged for chips and plaques”.

Crown Resort’s previous director James Packer was significantly scrutinized for leading the company down this path, “The company’s governance structures was also warped by Packer’s influence”, Bergin said during the inquiry. Packer’s legal misdirection leads to conflicts of interest between shareholders as well as lax regulations within the company.

The Public and Media Response

On Wednesday, the state regulator, the Independent Liquor and Gaming Authority (ILGA) said Crown needed “a lot of change” and volunteered to work with the company to achieve these reforms. Philip Crawford, the head of ILGA, said: “We now have a contractual obligation to consult with Crown and talk the issues through”. Despite this inquiry’s negative reception, Crown Resorts can now focus on redirecting the company in an honest fashion.

The NSW government has said that it would await the regulators’ recommendations before taking any more action. An important extract from the initial report recommends that a new gaming regulator focused on casinos be established to prevent future incidents similar to Crown Resorts’ recent scandal.

Despite the backlash from Australian media, Crown Resorts has time to reform their operations with the help of the ILGA and NSW governance. With a new board of directors intent on improving the company’s ethical score, it’s safe to say that the worst is now behind them.

Have you enjoyed this article? Then share it with your friends.
Share on Pinterest
Australian cityscape at night.

Similar Posts