SYDNEY: Crown Resorts Ltd isn’t fit to run its new flagship Sydney casino unless it replaces its chief executive officer and restructures the board, an inquiry recommended after a probe exposed wide-ranging governance and anti-money laundering failures.
Crown is “quite unsuitable” to hold the licence, retired judge Patricia Bergin said in a report to the gaming watchdog.
She also recommended 10% shareholding limits for any casino in the state, which would force billionaire shareholder James Packer to reduce his 36% stake.
The watchdog will consider the recommendations at a special meeting on Feb 12.
The gaming regulator asked Bergin to oversee an inquiry after a series of 2019 media articles alleged money laundering took place at Crown’s casinos, and the company used junket operators with ties to criminal gangs.
She was tasked with determining whether Crown was fit to run its new A$2.2bil (US$1.7bil) Sydney resort.
While retail operations at the site are underway, the start of gambling has been on hold since December.
“Any applicant for a casino licence with the attributes of Crown’s stark realities of facilitating money laundering, exposing staff to the risk of detention in a foreign jurisdiction and pursuing commercial relationships with individuals with connections to Triads and organised crime groups would not be confident of a positive outcome, ” Bergin said in her report.
“It is obvious that such attributes would render an applicant quite unsuitable to hold a casino licence in New South Wales, ” she said.
Bergin’s inquiry, which heard from senior management, board members and Packer, tore into the mechanics of the company and its ability to detect financial crime.
At one stage, she described the company’s lack of transparency as a “debacle.”
A report said CEO Ken Barton “has demonstrated that he is no match for what is needed at the helm of a casino licensee.”
The recommendations cap a torrid period for Crown and Packer. In 2016, Chinese authorities rounded up Crown staff on the mainland, before a court convicted 19 current and former employees of illegally promoting gambling.
Packer has since tried to sell some or all of his stake in Crown to at least two buyers, including Wynn Resorts Ltd.
Shares in Crown were halted from trading Tuesday. Star Entertainment Group Ltd, which currently operates Sydney’s sole casino, rose 2.6%.
More regulatory action could follow: Victoria’s gaming regulator, which oversees Crown’s casino in Melbourne, is also investigating Crown’s suitability to hold a casino licence.
Pressure on Crown intensified during the course of the year-long inquiry. Bergin asked chairman Helen Coonan in October whether it was reasonable to conclude that Crown had “facilitated money laundering” by a “conglomerate of ineptitude, lack of attention and failing to intervene.” Coonan replied: “Yes.”
Bergin said in the report that Coonan’s testimony was an indication that “there is the real prospect that Crown will recalibrate its relationship” with the gaming regulator to “one that is respectful and co-operative.”
Coonan has since apologised for Crown’s failings.
In October, she pledged to renew the board following concern directors lacked sufficient independence from Packer, and she said anti-money laundering controls at the company would be tightened. ─ Bloomberg