Crown Resorts continues to be in the hot seat in Australia, accused of egregious violations of existing financial and gambling regulations. It has already seen its casino license in New South Wales (NSW) suspended by regulators following an extensive investigation, and has faced similar scrutiny in Victoria and Western Australia (WA). While WA has requested considerably more time to complete its dissection of Crown’s operations, Victoria has now wrapped up its investigation, and the results were revealed today.
Crown Tries to Right the Ship
Several years ago, Crown started having difficulties that spilled out into the public. A contingent of employees were arrested in China for pushing the company’s gambling activity in the country and, not too long after that, a whistleblower revealed that at least one of the casino operator’s properties was guilty of tampering with gaming machines. Those issues were generally swept under the rug at first, but, when reports surfaced about alleged money laundering on a massive scale and gamblers with ties to genocidal maniacs visiting the casinos, things quickly became interesting.
Almost the entirety of Crown’s upper echelon has been replaced as NSW was the first to clamp down and suspend the company’s casino license in the state. Additional investigations were subsequently launched in Victoria and WA, and Victoria has now published its final results. It has determined, like NSW, that Crown is not suitable for a casino license. However, that’s where the correlation to the NSW investigation ends.
Crown Gets a Reprieve
Instead of pulling Crown’s casino license, Victoria decided to show a little leniency. Former federal judge Ray Finkelstein led the investigation, ultimately delivering a 652-page report to the government, which has decided to implement almost all of his recommendations. One of these is to give Crown time to fix its problems while it operates in some type of “probationary” period.
When the Royal Commission released its decision today, it asserted, “Within a very short time, the Commission discovered that for many years Crown Melbourne had engaged in conduct that is, in a word, disgraceful. This is a convenient shorthand for describing conduct that was variously illegal, dishonest, unethical, and exploitative.”
However, when you’re a multimillion-dollar company giving the government significant employment and revenue from taxes, operating illegally and unethically is often overlooked. Finkelstein had pointed out that the severity of the issues warranted a suspension of Crown’s license, but, instead, opted to give the company two years to clean up its act.
Tomorrow’s Crown to be Completely Different
Crown has done a good job convincing regulators and government authorities that it has seen the error of its ways and is ready to make amends. Two years is a long time and a lot of changes – on the regulatory side and the company side – will be seen between now and then. Crown has already started to make changes to appease regulators, but some of these, such as the introduction of a dedicated compliance officer, should have been in place years ago.
The company still has to deal with WA, which won’t complete its investigation until sometime next year. It isn’t clear how it will lean. However, if another of Finkelstein’s recommendations comes to pass, it might be able to make an easier decision. The former judge recommended that Crown founder and former boss James Packer needs to be removed from the company as much as possible. This includes forcing his stake to be reduced from its current 36% to no more than 5%. How that transition will be managed, however, hasn’t been revealed.