Crown Resorts’ Melbourne casino should lose licence over illegal conduct, inquiry hears
Crown Resorts’ Melbourne casino licence should be cancelled due to the company’s persistent misconduct, counsel assisting a royal commission in Victoria has recommended.
Adrian Finanzio, SC, told the commission Crown could also owe Victoria up to $480m after cheating on state taxes and had repeatedly breached the agreement under which it runs the casino by failing to properly tackle problem gambling.
Chair Helen Coonan and chief executive of Crown Melbourne Xavier Walsh were also not appropriate people to remain connected to the casino, given Crown’s pattern of misconduct, he said in closing submissions delivered on Tuesday.
The Victorian royal commission was called after a similar inquiry in New South Wales found that Crown was not suitable to hold the licence to run a new casino at Barangaroo, on Sydney harbour because it had facilitated money laundering at its casinos in Melbourne and Perth and organised crime was present in junkets that brought in highrolling gamblers.
NSW’s inquiry, which also set out a pathway by which Crown might become suitable to hold the Barangaroo licence, was sparked by allegations of money laundering and criminal activity at the company’s casinos published by Nine Entertainment in July 2019.
A royal commission is also under way in Western Australia.
“In this commission for the first time, a sense of the true depth and breadth of misconduct has come to light,” Finanzio told commissioner Ray Finkelstein.
“The evidence reveals serious misconduct, illegal conduct and highly inappropriate conduct, which has been encouraged or facilitated by a culture which has consistently put profit before all other considerations.”
He told Finkelstein that even if he decided that Crown should be able to keep its licence, it was clear it could not be trusted to reform itself without government supervision through the appointment of a monitor.
The call for cancellation of the licence was “not a submission made lightly”, Finanzio said.
“It is made cognisant of the consequences that such a finding would, in all likelihood, be highly disruptive to many people,” he said.
“The Crown complex has been part of the fabric of the city for many years, and is the largest single site employer in the state. It has 12,500 employees, maybe more.”
Crown continued to be vulnerable to money laundering by criminals, he said.
“Crown has failed woefully to adequately address key risks of money laundering,” he said.
He said he would not provide details of Crown’s failings because they would expose its ongoing vulnerabilities.
“It is sufficient to say that a casino of Crown’s size and length of tenure is in a sorry state of preparedness for one of the most important risks that it confronts,” he said.
“It is self evident that Crown has left itself wide open to exploitation by
money launderers in the past, and that it will take some time to rectify that situation.”
In 2012 Crown put in place a scheme to “skim a little bit off the top of the otherwise payable gaming tax”, he said.
The tax, which is collected by the Victorian government, is collected based on Crown’s gross gambling revenue – the difference between the amount gambled by customers and the amount paid back to them by the company. However, the commission has heard allegations that Crown incorrectly included bonuses paid to gamblers, and promotions including free hotel rooms, when calculating gross gambling revenue.
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“Leaving aside whether the deductions were permissible, deliberately concealing the deductions from the regulator showed a tangible consciousness by those involved that they were doing what they were doing was wrong,” Finanzio said.
He said Coonan and Walsh discussed the issue by phone on 23 February, the day after the premier, Daniel Andrews, called the royal commission.
During the meeting, Coonan “showed a stunning lack of curiosity” about the workings of the scheme, he said.
He said Walsh’s handling of the issue also fell short.
Walsh was appointed CEO of Crown Melbourne in December, after being the casino’s chief operating officer since 2013.
“Mr Walsh knew about the underpayment and concealment as early as 2018,” Finanzio said.
“He partially disclosed the existence of the issues to other directors, downplayed the significance of the issue to Crown’s lawyers, and never followed up the matter in any meaningful way.”
The commission has adjourned for two weeks to allow Crown and other parties to prepare submissions in response.
Finkelstein will then prepare his final report for government, which is due by 15 October.