Shock resignations of two James Packer-backed Crown directors could pave a way for the embattled gaming giant to obtain a new licence for its $2.2bn Sydney Barangaroo casino by April.
After the release of a damning report into the company on Tuesday, Crown Resorts announced Mr Packer’s Consolidated Press Holdings lieutenants on the board, Guy Jalland and Michael Johnston, would resign.
The NSW Independent Liquor and Gaming Authority report tabled to state parliament on Tuesday noted corporate “arrogance” was a driving factor in the company turning a blind eye to illegal money laundering within its Melbourne and Perth venues.
ILGA in its findings said the Packer-backed casino was not a suitable licensee holder and its state gaming clearance should be revoked.
The report said Mr Packer’s influence over Crown had “disastrous consequences for the company”.
Media reports in 2019 alleged Crown facilitated money laundering activities at its Melbourne and Perth casinos through Asian high-roller junkets, sparking questions over whether it was fit to hold a casino licence.
It was suggested at the near year-long inquiry that Mr Packer was the driving force behind the push to secure more of the VIP junket market.
At a press conference, ILGA chair Phillip Crawford said the sudden resignation was a “very accepting” sign the influence of Mr Packer and his private company over the board and senior management would be removed.
Mr Crawford said Crown would need to “blow itself up” in order to meet the NSW licensing requirements, with significant changes to the board and senior management needing to occur.
The gaming body would begin discussions with Crown through enforceable undertakings to ensure the company could acquire a casino licence by April.
Mr Crawford said ILGA had “contractual obligations” to work with Crown to overcome the issues presented in the inquiry’s findings.
He also noted dealings would be conducted through Crown’s chair Helen Coonan, who was exonerated of any wrongdoing during the inquiry but her “heavy reliance” on the advice of chief executive Ken Barton was unfortunately “misplaced”.
ILGA will also discuss if Mr Packer’s current 36 per cent shareholding in Crown is appropriate.
Inquiry Commissioner Patricia Bergin Ms Bergin has recommended that anyone with a 10 per cent shareholding in a casino licence needs to be approved by a new casino regulator.
Crown’s serious corporate failures included the arrest of employees in China in 2016, “with numerous failures to escalate indicators of real risks to the staff”, the report said.
Ms Bergin said in her findings there was “significant deficiency” in Crown’s corporate character and a lack of understanding and compliance of Australia’s anti-money laundering and counter-terrorism financing laws.
ILGA also found numerous governance failings by senior management and the board, including Mr Packer, who ignored risks of links to criminals when trying to get Hong Kong casino giant Melco to buy part of his stake in Crown.
NSW Premier Gladys Berejiklian told 2GB radio the report was damning and that if a company like Crown was found to have engaged in unlawful activities, “all bets are off”.
“Clearly on this occasion things have to change for anything to progress,” she said on Wednesday morning.
“The report was damning in terms of potentially unlawful activity, in terms of (allegations of) failure to comply to various requirements.”
Asked if she thought Crown’s licence should be cancelled, she demurred: “Oh look, that’s not my position.”
“The reason we asked commissioner Bergin, an eminent former judge, to conduct the commission … was to get the evidence, to get the facts. Now it’s up to the ILGA to give the government advice.
“At the end of the day, if a party is found to not have done the right thing, or if parties don’t come with the highest compliance and integrity and (if they engage in) unlawful activity, then all bets are off.”
The Premier was also asked her view on whether the Barangaroo tower could still be profitable if Crown couldn’t run a casino there but said it was not up the government to decide whether companies were profitable or not.
West Australian Gaming Minister Paul Papalia labelled the report findings “deeply concerning”.
“The Department of Local Government, Sport and Cultural Industries has requested that the state solicitor urgently assess the findings of the report and advise the Gaming and Wagering Commission of the relevance of the findings to Western Australia,” Mr Papalia said in a statement on Wednesday.
“The department has also requested that the commission meet urgently once it has received the state solicitor’s advice in order to consider the report sooner than planned.”
One of the many recommendations that might be relevant was adopting Singapore’s legislative requirements for a casino operator to concurrently report suspicious behaviour to both AUSTRAC and the state authority, Mr Papalia said.
Moody’s Investors Service analyst Maadhavi Barber said the ratings agency expected some of the changes required to maintain Crown’s Sydney licence would directly affect the conditions to retain its Melbourne and Perth gaming licences.
“The findings of the commissioner’s report are among the more onerous of the potential outcomes Moody’s was considering,” she said.
“Most notably, however, the report did not suggest an irrevocable suspension or loss of the Sydney gaming license. Instead, it suggested measures that might allow Crown to retain its licence.
“While the required remediation steps are onerous, Crown has initiatives under way to address some of the commissioner’s findings. Moody’s expects Crown to be willing and able to resolve the identified shortcomings, supported by its strong financial profile.”