Crown Resorts License In Jeopardy After ILGA Ruling
The future of Crown Resorts is in jeopardy after a ruling from the NSW Independent Liquor and Gaming Authority. The ILGA has declared that Crown Resorts is no longer suitable as a casino license holder.
Now, it is up to Commissioner Patricia Bergen to determine how to proceed in this matter. The potential revocation could halt plans for the company opening a Barangaroo casino by the end of the year.
ILGA Rules Crown Resorts Unfit to Hold a License
If you have been following the legal saga surrounding Crown Resorts, then you know that the ILGA has been investigating the company since January 21, 2020. COVID-19 shutdowns forced a delay in hearings, but they resumed in July.
Since that time, the organization gathered evidence against Crown Resorts and then finally issued its findings last week. The organization found gave several reasons for their finding. They include findings that the company was deficient in identifying and communicating the risk of working with VIP international businesses. The investigation showed Crown overpromised in their ability to deliver to VIP businesses and sought profit above everything else.
https://t.co/3O2qo8OvT2 Patrick Hatch: The future of Crown Resorts’ new Sydney casino darkened further on Friday after counsels assisting the public inquiry into the group argued the belated attempts to clean up its act were “too little, too latel
— Mari R (@randlight) November 6, 2020
The ILGA has asserted that the company’s links to organized crime, particularly in China make the company unsuitable for a license. Furthermore, there are several that remain in corporate management despite the failings of the company in the past.
Furthermore, the controversial involvement of James Packer continues to be a major blight on the company. Packer holds around 37% of Crown stock and has used his leverage to bully and intimidate those in the organization in the past. While Packer is no longer part of Crown’s board of directors, he still dictates many of the company’s moves. He also has special access to corporate data and information that others don’t.
Ultimately, the ILGA gave various recommendations that could lead to the revocation of Crown’s license.
How This Case May Proceed
Commissioner Patricia Bergen will make her final report in February 2021. The ILGA has given several recommendations on how to handle the Crown matter. Some form of regulatory action is recommended against both Packer and Crown. It is unclear what that action would entail.
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— marcus kelson (@marcuskelson) November 6, 2020
Of course, there is a chance that Crown’s casino license could be temporarily revoked until they meet certain conditions to retain it. Some expect that Packer will have to sell off the majority of his stock and remove himself as a registered associate of the casino. Odds are that this will be non-negotiable for the casino to continue operating.
The most drastic measure would be revoking Crown’s license. That would seem the least likely of outcomes considering the amount of business that Crown does in the country. However, if it appears that Packer will not play ball with regulators, it may be an option.
Barangaroo Casino Opening May Be Delayed
There is some talk that the Barangaroo VIP casino opening experience a delay due to the ongoing licensing issues. If Crown proceeds to open the casino and lawmakers revoke its license, the casino will have to shut down.
Of course, there is still time before the opening for Crown lawyers and lawmakers to come to some form of an agreement. It is likely that we will see Packer sell off his shares in order to save Crown Resorts. He could still retain a 10% stake in the company and satisfy lawmakers.
Also, the COVID-19 pandemic could also change things. With worldwide cases rising and some countries already imposing new lockdowns, NSW may have to do the same. This would delay any action until sometime in the Spring. We will update you on this story as there are new developments.
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