SYDNEY – Australian gaming giant Crown Resorts is in chaos and its future operations uncertain as it deals with a devastating inquiry that found it was unsuited to run a casino in Sydney.
The 18-month inquiry, ordered by the gaming watchdog in New South Wales, has raised doubts about the future of Crown’s new casino in its A$2.2 billion (S$2.26 billion) hotel and residential tower on a prized waterfront spot adjoining the city centre.
It has also led to questions over whether Crown can run casinos in other states such as Western Australia and Victoria, home to Crown Melbourne, one of the biggest casino complexes in the world.
WA’s government ordered an inquiry on Wednesday (Feb 17) into operations at Crown’s casino in Perth, including whether it engaged in money laundering. The inquiry is expected to take about four months.
The NSW inquiry has placed pressure on other state governments to act because its findings were based on operations at Crown’s casinos in Melbourne and Perth. In Australia, the states, rather than the federal government, are responsible for granting casino licences and overseeing their operations.
The NSW inquiry, conducted by former Supreme Court judge Patricia Bergin, found that the company facilitated money laundering and associated with junket operators who had links to organised crime. It said the firm would need to make drastic changes to become fit to hold a casino licence in Sydney.
Following WA’s plans to hold an inquiry, Victoria’s Labor Government is under pressure to do more to scrutinise activities at Crown Melbourne.
Victoria’s opposition urged Premier Daniel Andrews on Wednesday to investigate the gaming giant, accusing him of running a “protection racket” for the company.
“There’s a huge disparity between what other states are doing and what Victoria is doing,” the opposition gambling spokesman, Ms Steph Ryan, told The Age.
“Victorians are very rightly asking why Daniel Andrews will not investigate Crown or take any meaningful action.”
Victoria’s government said it was seeking advice about its response to the NSW report and would issue an announcement soon.
States in Australia have sometimes been reluctant to act too strongly against gaming operators, which tend to be large sources of taxation and big employers. Crown Melbourne employs up to 16,500 people.
The fallout from the NSW inquiry has been dramatic, leading some commentators to call for the entire board of Crown to resign.
Chief executive Ken Barton resigned following the release of the Bergin report, as did three directors.
Australian gaming tycoon James Packer, who formerly chaired the company, faced criticism in the report and has since committed to separate himself from the firm.
Mr Packer told The Australian last Saturday that it was “an extremely difficult period for everyone involved”.
“I want to see Crown recover as best as possible,” he said. “It’s important that (Consolidated Press Holdings, Mr Packer’s private company) gets out of the way and has no involvement other than as a passive shareholder.”
Britain’s Gambling Commission has said that it is also reviewing operations by Crown, which operates Crown Aspinalls in Mayfair in London.
The inquiry has prompted questions about Crown’s practice of luring high-rollers – particularly from China – to its Australian casinos.
These big spenders are lucrative earners for Crown and other casino operators, but the report found that Crown had partnered with junket operations – which bring in high-rollers – that had links to organised crime. Crown last year ended its junket partnerships until they are licensed by regulators.
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