Moment of truth looms at Crown
CROWN Resorts – whose major shareholder is billionaire James Packer – will finally know whether it will maintain control of the Melbourne casino on Tuesday when the Victorian government releases the report of a royal commission.
The report – and the govern- ment’s response to its recommendations – could have major implications for Crown, the 11,500 people employed at the Southbank facility, and the more than $200m in tax it provides the Victorian government every year.
It also means CEO Steve McCann, Mr Packer and other Crown executives will have to balance managing the implications of the report with their planned appearances in front of Western Australia’s separate royal commission into Crown’s Perth casino this week.
Victoria’s Minister for Consumer Affairs, Gaming and Liquor Regulation, Melissa Horne, confirmed on Monday the commission’s final report would be tabled in parliament on Tuesday – 11 days after it was handed to the government by inquiry chief and former Federal Court judge Raymond Finkelstein (pictured).
“The government will not be making any comment regarding the royal commission until the report is tabled,” she said.
The release of the report will bring the commission’s whirlwind eight-month process to a close. The probe came after the NSW’s Bergin Inquiry temporarily revoked the licence to Crown’s new Sydney casino after it uncovered likely instances of money-laundering at Crown’s long-held Melbourne and Perth casinos.
The inquiry also linked corporate governance failures at Crown to the influence of Mr
Packer, his nominee directors and several executives. It led to NSW pledging to overhaul casino regulation in the state, restrictions on Mr Packer’s ability to exercise his 37 per cent stake in the company, and an exodus of executives and directors.
Through eight weeks of hearings, the commission unearthed scandals such as an illegal gaming chip payment method used by Chinese highrollers and the underpayment of millions in tax,
It is likely Mr Finkelstein will recommend Crown be ruled unsuitable to operate the casino in line with his counsel assisting’s formal recommendation.
The crucial qualifier is whether that recommendation of unsuitability comes with a chance for Crown to continue operating Crown Melbourne while it reforms itself, or whether it is recommended the Victorian government scrap the licence outright.
The latter option could force Crown to lease or sell its most profitable asset, while causing a share price dip that would attract would-be suitors for a takeover attempt
Meanwhile, a class action trial into Crown due to start on Monday was delayed until Wednesday. It has been brought against Crown by lawyers Maurice Blackburn on behalf of shareholders amid the fallout of the arrest of 19 Crown staff in China, in 2016, for allegedly illegally promoting gambling.