Crown Resorts May Have Its License Suspended or Cancelled
The New South Wales (NSW) gambling regulator’s inquiry into Crown Resorts’ suitability for holding a casino license is continuing and the Independent Liquor and Gaming Authority (ILGA) showed Thursday for the first time what is at stake.
The New Casino Opening under Threat
Just weeks before the scheduled opening for its newly-built AU$2.2 billion casino resort in Barangaroo near Sydney, Crown Resorts is facing the possibility of having its license suspended due to past corporate governance failures. The inquiry into Crown’s suitability for a casino license started after publications alleging links between organized crime and junket companies the operator used to partner with in relation to its VIP international business.
The lawyer conducting the hearings of former Crown board members and executives, Adam Bell, is contemplating stripping the casino operator off its license, besides the restrictions the company needs to impose on the influence of its founder and current owner of 36% stake, James Packer. Crown should also rethink Packer’s status as a registered associate and even force him to sell his stake, the summing-up remarks of the lawyer showed.
“You should recommend to the (casino) authority that it reconsider its approval of Mr Packer as a close associate of the licensee with regard to his conduct.”
Adam Bell
The hearings revealed the unhealthy influence of billionaire James Packer over the company, including receiving exclusive trading updates and giving directions despite holding no company role, as well as threatening business associates when they stood on his way to take the company private.
Conditional Suspension or Cancellation
Adam Bell further contemplates that if the regulator could not work properly with the operator to establish compliance and AML controls, it faces one of two options: either suspend the license contingent on the fulfillment of certain criteria, that when satisfied, will bring an end to the suspension, or cancel the license.
Imposing the most damaging penalty on Crown, to have its license revoked, will be a heavy blow for the company which had to abandon its offshore ambitions 4 years ago after having members of staff arrested by Chinese authorities, and concentrated efforts into the new casino resort near Sydney.
Even the recommendation by the retired judge for a temporary license suspension, a punishment that starts to look like unavoidable at this stage of the inquiry, will have a significant impact on Crown Resorts, forcing the operator to push back the opening of the new casino resort and the multiple financial implications it bears.
Crown had another investigation into its dealings launched in October, this time by the Australian Transaction Reports and Analysis Centre (AUSTRAC). The country’s financial crime regulator inquired about Crown dealings with high net worth individuals (HNWIs) and politically exposed persons (PEPs) related to the company’s flagship casino in Melbourne.
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