Inquiry finds Crown Resorts not suitable to operate new Sydney casino

A report has deemed Crown Resorts as being unsuitable to operate its new casino at Barangaroo on the Sydney harbour foreshore.

Tabled in the NSW Parliament yesterday afternoon following a months-long public inquiry which exposed allegations of money laundering, the report confirms criminality within the casino's operations were first raised by media in 2014.

Commissioned by NSW's Independent Liquor and Gaming Authority (ILGA), the Crown probe said the company needed to make sweeping cultural changes if it wanted to be considered a suitable operator in the future.

This would appear to suggest that the casino component of Crown's new $2.2 billion development on Sydney Harbour will almost certainly be blocked from opening without changes in Crown’s governance and operations.

During the hearings, headed by Commissioner Patricia Bergin - a former Chief Judge in the NSW Supreme Court -– details were shared about incidents of money laundering and links to international criminal syndicates through Crown's relationship with private junket operators who sourced the company's VIP clients from overseas.

The inquiry also investigated whether Crown broke any of its regulatory arrangements when former Executive Chairman James Packer sold a portion of his shares to Hong Kong based gaming giant Melco Resorts while also probing Packer's involvement in the company after stepping down from the top job.

It was told his company Consolidated Press Holdings was given regular business updates about Crown's affairs and that Mr Packer acted as a "de facto director" even after leaving company.

The report criticised Crown's "corporate arrogance", adding “one of the difficulties for Crown was its unjustified belief in itself and its unwillingness to entertain the prospect that there was any force in any of the Media Allegations”.

The "core problems" which made Crown unsuitable, the report said, were the operator's "poor corporate governance" and "deficient risk-management structures".

The Commissioner noted the operator recognised a need for cultural change and that it has identified matters requiring "urgent attention and rectification".

The report made 19 recommendations, including several changes to the Casino Control Act aimed specifically at addressing money laundering activities which were uncovered during the inquiry.

One of the key recommendations was the establishment of the Independent Casino Commission (ICC) to operate as an independent oversight body, with powers of a standing Royal Commission, to regulate the gaming sector.

The ICC would ultimately be responsible for licensing decisions and disciplinary actions taken against licensees.

The report comes after a year-long inquiry ordered by the gaming regulator into systemic issues at Crown's existing casinos in Melbourne and Perth, to examine whether the company was fit to hold the gambling licence for the new facility.

Its results will likely have major implications for the group’s Melbourne property and would appear to prevent the opening of its new casino on Darling Harbour, although a hotel, and several restaurants in the tower have already opened.

In a statement, Crown said it was considering the findings in the report and will work with ILGA and the State Government "in relation to the findings and recommendations".

Commissioner Bergin's recommendations must still be officially adopted by the ILGA.

Images: Crown's new Sydney development. Credit: Crown Sydney.