Inquiry Deems Crown Not Suitable For Sydney Casino Licence
Crown Resorts is deemed not suitable to hold a Sydney casino licence, casting serious doubts on the company’s future. Crown cannot run the casino at its $2.2 billion Barangaroo, Sydney and may not be allowed to operate at all.
The Bergin Inquiry, named for Commissioner Patricia Bergin, is one of the most extensive inquiries of its type. It spreads across 768 pages and the top and bottom of it is that Crown isn’t suitable for a Sydney casino licence.
The ruling is not a surprise by anyone’s standards. Adam Bell SC, a legal adviser for New South Wales, stated Crown was unsuitable for a licence in November 2020. Other key industry personal mirrored those thoughts and sentiments.
Commissioner Bergrin learned money laundering took place at two Crown properties for at least five years. Australian media reported on the money laundering in 2019 but Crown failed to respond.
“[Crown] showed a total lack of commitment to turning inwards and rectifying the obvious problems,” Bergin said.
That inaction and denial of any wrongdoing made Bergin believe Crown has “very deep corporate cultural problem.” The problems are that severe that Crown is not suitable to hold a valuable Sydney casino licence. Crown’s use of junket operators doesn’t sit well with Bergin either. The junkets have links to organised crime, something Crown was aware of but failed to act on. Crown, of course, announced it was no longer using junkets, but on a temporary basis. It could be permanently soon because Crown faces the prospect of losing all its licences.
Crown Could Lose All Licences, Not only Its Sydney Casino Licence
The NSW Independent Liquor and Gaming Authority (ILGA) is considering the 768-page report on Feb. 12. A special board meeting is scheduled for Feb. 17. The ILGA is set to decide whether to suspend Crown’s licence, or cancel it completely. Imposing special conditions on Crown is another possible outcome.
Nobody knows what action the ILGA will take but many fear the worst for Crown. Being unable to hold a Sydney casino licence is damaging enough, losing all licences would be catastrophic.
Three Key Crown Personal Lambasted
It is likely the ILGA will impose restrictions on Crown and ask for Board members removing. Three Crown Board members faced harsh criticism in the Bergin report. Chief Executive Ken Barton, director Andrew Demetriou, and Michael Johnson did not come off well in the report.
“Regulators should have very serious doubts” about Crown’s suitability to run a casino with this trio on the Board.
Bergin called Barton’s actions appalling and quite improper in his role of CEO. He demonstrated “a breathtaking lack of care” when dealing with money laundering allegations.
Johnson didn’t come off any better. His actions, or lack of them, contributed towards Crown not receiving its Sydney casino licence. Bergin was particularly scathing in her assessment of Johnson.
“Mr Johnston has served as a director on the Crown board for over 13 years. It would be appropriate for him to conclude his tour of duty as soon as possible to enable the Authority to be comfortable in due course that Crown will be a suitable person to be a close associate of the licensee”
Demetriou was caught reading notes while giving evidence to the inquiry. He denied his obvious note reading and still does to this day. Bergin called Demetriou’s performance “quite bizarre”.
Crown Halts Trading Of Its Stock
Crown halted trading of its stock on the Australian Securities Exchange before the inquiry’s verdict. They remain in this state on Feb. 10 too. It doesn’t take a genius to work out that Crown’s share price will plummet when stock can be traded.
It is bad enough Crown has a $2.2 billion casino resort with no casino. But the prospect of losing all its licences has investors nervous.