Australian State Takes ‘Unprecedented Step’ As Crown Melbourne Retains Casino License

Crown keeps Melbourne license

The government of the Australian state of Victoria has allowed operator Crown Resorts to keep its Melbourne casino license in response to the findings of the state’s royal commission.

illegal, dishonest, unethical and exploitative”

The Victoria government received the Crown Melbourne report by royal commissioner Ray Finkelstein on October 15. His review was damning, stating that the casino had “facilitated millions of dollars to be laundered,” and that it had engaged in “illegal, dishonest, unethical and exploitative” conduct.

In its response, presented on Tuesday in Victoria’s parliament, the state government said that it “accepts all” of the commission’s findings. As a result, Crown Melbourne will fall under strict supervision for two years in what lawmakers have deemed “an unprecedented step in Australian corporate oversight.”

Radio journalist Roshai Murdoch took to Twitter following the announcement to share Crown’s vow to reform and its acceptance of the 33 recommendations for change:

Crown Resorts responds to the findings of Victoria’s Royal Commission.
The company has vowed to be “a better Crown” and believes the 33 recommendations for change will “accelerate” it’s reform program. @3AW693 pic.twitter.com/AOQ5InyY8v

— Roshai Murdoch (@roshaimurdoch) October 26, 2021

Two years to reform

In its response on Tuesday, the Victoria government affirmed that “tough new measures and stringent oversight” of the James Packer-owned Crown Resorts will “ensure the failures exposed by the Royal Commission never happen again.” The Casino and Gambling Legislation Amendment Bill 2021 forms part of those strict new rules. It implements the commission’s nine priority recommendations, with additional legislation planned for 2022.

The government took on board the commission’s recommendation that the immediate cancellation of Crown Melbourne’s license would have a negative effect on “innocent third parties.” The report warned of a “real risk of significant harm to the Victorian economy” should this happen.

In July, Adrian Finanzio, counsel assisting the royal commission inquiry, recommended that Crown lose its license for irresponsible gambling policies. The month prior, the government of Victoria approved more time and money for the royal commission’s investigation, with the deadline extended from August 1 to October 15.

As part of the “unprecedented step” established by the government on Tuesday, Stephen O’Bryan QC will take on the role of special manager overseeing Crown Melbourne – subject to the passage of legislation through parliament. As the state’s first holder of the position, titled Independent Broad-Based Anti-Corruption Commissioner, O’Bryan will oversee the resort with the power to veto board decisions. He will also gain “unfettered access to all areas of the casino and its books and records.”

O’Bryan will hold sway over any decisions made by the casino

As per the government’s proposed legislation, officials will automatically cancel Crown’s Melbourne license once O’Bryan’s special manager oversight ends, unless they deem Crown fit to continue running the property. As Crown Melbourne works to reform itself within its two-year lifeline, O’Bryan will hold sway over any decisions made by the casino.

Raft of regulations

The commission’s report also highlighted “grave, ongoing legal breaches and misconduct” at odds with both Australian and international law, often with the awareness of Crown management. As such, the government’s proposed legislation will prohibit a gaming firm from dealing with junket operators, who bring in profitable high rollers from outside of Australia.

An additional amendment proposed under the new legislation includes upping the maximum penalty in the Casino Control Act 1991 from AU$1m (US$750,270) to AU$100m (US$75m). The government said this will ensure “meaningful consequences” for casinos caught breaking the law.

Among its raft of recommendations, the commission also suggested that James Packer’s investment company cut its 37% shareholding in Crown down to under 5% by September 2024. Government officials argued that the company had “abused its position as a dominant shareholder.”

Finkelstein’s report asserted that he believed the Melbourne casino operator has “the will and the capacity to reform itself […] and remove the stain on its reputation.”

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