The troubling findings of a NSW inquiry into Crown Resorts (ASX: CWN) have led Victoria to follow suit, launching a Royal Commission today into whether Crown Melbourne is suitable to hold a casino licence in the state.
Earlier this month the NSW Bergin Inquiry triggered a raft of high-profile resignations including CEO Ken Barton, as well as the denial of a gaming licence for now from the gambling regulator at Crown's $2.2 billion project in Barangaroo, Sydney.
Yet another director has resigned following today's announcement, with Harold Mitchell following in the foosteps of Barton, Andrew Demetriou, Michael Johnston and Guy Jalland, as well as company secretary Mary Manos.
The inquiry led by the Honourable Patricia Bergin SC highlighted three "stark realities" at Crown's operations relating to the alleged facilitation of money laundering and junkets, as well as governance issues surrounding staff arrests in China.
Now the Victorian Government has appointed Raymond Finkelstein QC to investigate the suitability of Crown Melbourne and its associates - including the Crown Resorts parent company - to hold a licence, with an expected release of recommendations by 1 August this year.
Later in 2021, the Government will legislate to enable the Victorian Gaming and Liquor Regulation Commission (VCGLR) to give effect to any findings of the Royal Commission.
In the absence of COVID-related lockdowns, Crown Melbourne is the group's biggest earner, with "theoretical" EBITDA of $354.3 million in FY20. This compares to $161.8 million at Crown Perth.
In FY19, Crown Melbourne accounted for 69 per cent of the group's earnings.
Chairman Helen Coonan is currently acting as interim executive chairman until a replacement CEO is found, with an additional remuneration of $1.8 million per annum.
"Crown welcomes the announcement from the Victorian Government as it provides an opportunity to detail the reforms and changes to our business to deliver the highest standards of governance and compliance, and an organisational culture that meets community expectations," Coonan says.
"Victorians should be assured we recognise the responsibility placed on us by the community, governments and regulators and we will fully cooperate with the Royal Commission."
Finkelstein QC has served more than 40 years at the Victorian Bar and has been a Queen's Counsel since 1986. He was appointed a judge of the Federal Court in 1997 and held other notable appointments as Deputy President of the Copyright Tribunal of Australia and President of the Australian Competition Tribunal.
He retired as a judge of the Federal Court and President of the Competition Tribunal in 2011 and has returned to private practice at the Victorian Bar.
The government said it had been taking advice about the most appropriate way to proceed following the report from the NSW Independent Liquor & Gaming Authority (ILGA).
Authorities concluded establishing a Royal Commission would ensure the most appropriate access to information regarding Crown Melbourne's suitability to hold the casino licence, given the Commission's powers to compel witnesses and documentation.
The Government has also commenced work to establish an independent casino regulator and Minister for Consumer Affairs, Gaming and Liquor Regulation Melissa Horne has commissioned a review to advise on the necessary structural and governance arrangements.
The independent review will occur parallel with the Royal Commission and will also assess, among other things, requirements for regulation of money laundering and junket operations.
"The reports from New South Wales' ILGA Inquiry were incredibly concerning, which is why we're establishing a Royal Commission to get the answers we need about Crown Melbourne," says Minister Horne.
"The Royal Commission will establish the facts and the Government and the VCGLR will take any necessary action at the conclusion of the investigation. We will not tolerate illegal behaviour in our gaming industry."
"This is about making sure that those who hold a casino licence in Victoria uphold the highest standards of probity and integrity - and that they're accountable for their actions," adds Victorian Premier Dan Andrews.Never miss a news update, subscribe here. Follow us on LinkedIn, Instagram and Twitter.
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