Melbourne’s Crown Casino has 2 years to clean up its act or lose its licence, the royal commission says

Melbourne’s Crown Casino has 2 years to clean up its act or lose its licence, the royal commission says
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  • Melbourne’s Crown Casino is “unsuitable” to hold a casino licence, a Victorian royal commission has found.
  • In its final report, the royal commission found the gambling den engaged in “alarming” and “callous” behaviour, skirting the law in the process.
  • But Crown Casino will have two years to clean up its act under the eye of a ‘special manager’ before it loses its licence.
  • Visit Business Insider Australia’s homepage for more stories.

A catalogue of “disgraceful” behaviour means Melbourne’s Crown Casino is unsuitable to hold a casino licence, a Victorian royal commission has found, but the gambling den will have two years to clean up its act before further action is taken.

In a damning final report into the casino’s operations, commissioner Ray Finkelstein on Tuesday ruled the Southbank venue was guilty of “alarming” and “callous” conduct across its operations.

Drawing from previous inquiries, the report stated Crown Melbourne was “content to breach local laws” by concealing its tax obligations in 2011.

The business “happily assisted” a cadre of Chinese players who funnelled up to $160 million from offshore accounts to Crown Towers Hotel between 2012 and 2016 — a manoeuvre which breached Chinese currency laws and “likely allowed money laundering to take place.”

Crown did little to protect staff promoting the casino across China, Indonesia, Malaysia, Taiwan and Singapore, where their operations were “likely contravening” local laws, the report found.

The casino’s handling of patrons with extreme gambling habits was also cause for serious concern, as the royal commission heard “many distressing stories from people whose lives were ruined by gambling but whose situation might have been improved if casino staff had carried out their obligations under Crown Melbourne’s Gambling Code.”

With senior board kept in the dark or “asleep at the wheel”, senior executives “indifferent to their ethical, moral and sometimes legal obligations,” and Crown Casino lawyers failing to advise against the most onerous conduct, the commission found there was only one option.

“When these facts came to light, it was inevitable that Crown Melbourne would be found unsuitable to hold its casino licence,” the 652-page report said.

“No other finding was open. The only difficult question was what should be done in that circumstance.”

Two years to reverse course

Despite those findings, the royal commission did not recommend Crown Casino immediately lose its licence.

Instead, the royal commissioner found itself backed into a corner: while needing to maintain the integrity of the state’s licencing regime, shredding the casino’s ability to operate could harm the local economy and many of the 12,500 innocent workers at one of Victoria’s largest single-site employers.

With those competing factors in mind, the royal commission has called for a ‘special manager’ to be appointed to oversee the company’s restructuring efforts.

“Although Crown Melbourne rightly deserves criticism for its past misconduct, and no one connected with the organisation is entitled to much sympathy, what tipped the balance against the cancellation of its licence was that Crown Melbourne has, at great financial cost, embarked on a significant reform program led by people of good will and skill,” the royal commission found.

“The program is likely to succeed. If it does, that will be to the benefit of Victoria.”

Should the ‘special manager’ decide Crown Casino is not a “suitable person” to hold the licence after two years of internal reforms, “the licence will be cancelled forthwith.”

The royal commission has also called for Casino Control Act to be amended, allowing inspectors to investigate potential money laundering and loan sharking activities on-site.

Those inspectors should be granted full access to the casino’s books, records, and surveillance material, with any outside interference punishable by a “significant penalty.”

Inspectors should be empowered to make exclusion orders for gamblers and withdraw an individual’s licence to stay on the premises.

Victorian government pledges swift action

In a statement, the Victorian Government said it accepts the findings of the royal commission, and will today table legislation to immediately enable nine of the report’s 33 recommendations.

The government will go “above and beyond” the report’s recommendations to enshrine a maximum penalty of $100 million for entities found to breach the state’s Casino Control Act, the statement read.

”Since receiving the final report from the Royal Commission, we’ve prioritised the most urgent actions to ensure we have a casino operator that upholds the highest standards of integrity and honesty,” said MP for Gaming and Liquor Regulation Melissa Horne.

Crown Resorts is yet to issue a public statement on the final report and its proposed crackdown.

However, investors appear to have taken the two-year reprieve as a good omen, with shares in parent company Crown Resorts rising 8.6 per cent through to 1pm.