Crown's casino licence put to test as Victoria brings forward review

Crown's casino licence put to test as Victoria brings forward review

The suitability of Crown Resorts (ASX: CWN) to hold a casino licence is being put to the test next year after the Victorian Government announced it was bringing forward a casino review.

The move follows "concerning evidence" that emerged from the Independent Liquor and Gaming Authority (ILGA) inquiry in NSW which led to the regulatory body delaying the opening of Crown's $2.2 billion Barangaroo casino in Sydney until early next year.

A decision on the Sydney opening, which was originally scheduled for this month, will be made after ILGA hands down its findings on February 21.

Under the current Casino Control Act, the Victorian Commission for Gambling and Liquor Regulation (VCGLR) must review the suitability of Crown to hold the state's sole casino licence every five years. The last investigation was undertaken in 2018.

The government says there is a need for an immediate response in this regard due to the evidence heard by NSW inquiry this year.

"We're making sure Crown Melbourne conducts its business in a transparent and appropriate manner," says Melissa Horne, Victoria's Minister for Consumer Affairs, Gaming and Liquor Regulation.

"This review is needed given the evidence we've seen come out of the NSW inquiry.

"While we await the findings of that investigation, it's appropriate to bring forward the next review to ensure Crown Melbourne is suitable to hold a licence in Victoria."

Crown has been doing its best in recent months to bolster its compliance systems after admitting to the NSW casino inquiry that it was "more probable than not" that criminals had laundered money through the bank accounts of its subsidiaries.

Crown chair Helen Coonan acknowledged the shortfalls and offered an "unreserved apology' to shareholders at the company's AGM for failures that may have facilitated money laundering at the casino.

The NSW inquiry has created a world of pain for Crown this year.

The financial crime watchdog AUSTRAC has launched a separate investigation into Crown's potential non-compliance of anti-money-laundering laws.

That led to a class action led by Maurice Blackburn on behalf of shareholder Greg Lieberman, alleging Crown breached its continuous disclosure obligations and conducted its affairs contrary to the interests of members between 11 December 2014 to 18 October 2020.

This week, Maurice Blackburn lodged a new class action alleging Crown's governance and risk management failings caused a massive plunge in its share price in October.

In November, Crown announced the suspension of all activity with junket operators until 30 June 2021 and that it will undertake a review of processes related to junket operators. The timing is impeccable with the lucrative international high-roller market still down for the count at present. 

Earlier this month, Crown appointed Steve Blackburn, a money laundering specialist from the banking industry, as its chief compliance and financial crimes officer. Blackburn will assume the newly created position on 1 February.

Meanwhile, Victoria is preparing to appoint a dedicated commissioner to head the VCGLR's seventh casino review of Crown and it is expected to report its findings next year.

The government says it will take any appropriate and necessary action at the conclusion of the investigation.

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