Crown Found Not Suitable for License in NSW
Crown Resorts LTD has been facing legal trouble for a while now. Now, the casino company may have been dealt a fatal blow. According to various reports, the company is now unsuitable to hold a gambling license. The only way that the company will be able to retain a license is to make significant changes to both its culture and its board of directors.
Inquiry Finds Crown Unfit for a License in NSW
NSW gambling officials have been investigating Crown Resorts for over a year now. The results of that investigation are now public. On Tuesday, the findings from that report showed that there are significant failures in governance at the Crown. The report also claims widespread money laundering.
This couldn’t come at a worse time for Crown as they were getting ready to open their Sydney waterfront tower casino. The company spent approximately A$2.2 billion building. Crown has spent nearly a decade building the casino, which now sits largely empty minus hotel and restaurant operations.
News: Crown Resorts deemed not suitable to hold casino license https://t.co/rhEA1gQB7O
— Gambling Insider Magazine (@G_Insider) February 9, 2021
Patricia Bergin, the head of the investigation, spoke on the findings. She stated, “Any applicant for a casino license with the attributes of Crown’s stark realities of facilitating money laundering, exposing staff to the risk of detention in a foreign jurisdiction and pursuing commercial relationships with individuals with connections to Triads and organized crime groups would not be confident of a positive outcome,”
Bergin continues by stating that Crown Chief Executive Ken Barton is not suitable for a company holding a casino license, stating that he is “no match” for what the company needs to do for compliance. Other recommendations include a 10% limit on anyone holding shares with the company. James Packer is currently a primary shareholder with the company, holding about 35.9% of the company’s shares. He also has significant influence over the company due to the number of shares he holds.
Findings Could Impact All of Crowns Licenses in Australia
A final decision on Crown’s NSW license is still forthcoming. The Independent Liquor and Gaming Authority (ILGA) still need to meet regarding the report and to make a final decision. However, the decision of the ILGA could have serious consequences in other jurisdictions.
Parliament member Andrew Wilkie has stated that the report brings up an “equally important question about what happens with the Crown licenses in Melbourne and Perth.” He says that if they are indeed “unfit to hold a license in Sydney, surely they are just as unfit to hold a license in other jurisdictions.”
Crown Resorts may face a structural overhaul, including the potential sell-down of its largest holder’s stake, after a report said the casino operator isn’t fit to hold a gaming license in Sydney https://t.co/2DkMt9Iax9
— Bloomberg (@business) February 10, 2021
ILGA originally granted a license to Crown years ago for the Sydney casino. However, it suspended that license in late 2020 due to the inquiry. This inquiry began after various reports that are suggesting dealings with various criminal groups.
Crown was originally denying any wrongdoing, but during the inquiry, various executives began testifying that there was a possibility of money laundering occurring at its casinos. Bergin further chastised Crown, saying that it was unwilling to admit that there were any problems. She also criticized the company for waiting until October 2020 to start an investigation into the casino’s anti-money laundering policies.
Crown has claimed that they are willing to work with the ILGA to address the findings and to try to find a way forward. However, at this point, it seems that nothing short of changing how the company is operated will satisfy regulators. Also, James Packard must have his role in company proceedings eliminated. Anything else will probably result in the company having the NSW license revoked and other provinces looking to do the same. Things must change or the Crown may have to leave the casino industry entirely in Australia.
Blackstone Group Makes Takeover Offer to Crown Resorts
Things have never looked darker for Crown Resorts in Australia. Facing both a Royal Commission inquiry and a potential revocation of its cas...