List of grievances
To conclude a seven-week public hearing, a New South Wales (NSW) Independent Liquor and Gaming Authority (ILGA) inquiry was advised that Crown Resorts was not a “suitable person” to maintain a gaming license. Looming large in that conclusion was former chief executive and still significant shareholder, James Packer.
The probe laid out its case to the ILGA inquiry, including showing how Crown had links to organized crime, how it permitted money laundering to be conducted at its Australia casinos, and how it put employees at risk by sending them to China, eventually leading to 19 of them being arrested in 2016. It also looked at Packer selling shares of Crown to Melco Resorts from his own private company, Consolidated Press Holdings.
deleterious impact on the governance of Crown Resorts”
Counsel assisting Adam Bell, SC, said that the China arrests and Melco stock sale, in particular, illustrated a “deleterious impact on the governance of Crown Resorts caused by its dominant shareholder, CPH and ultimately Mr. Packer.”
NSW Premier Gladys Berejiklian said she will take everything under consideration and decide what to do about Crown, which may include asking the company to hold off on opening its new Crown Sydney casino, set to open next month. The possibility to strip Crown’s casino license is also on the table.
Packer a blight on the company
James Packer’s behavior was also under the microscope during the hearings. About a month ago, he admitted to the inquiry that he threatened a person he was working with when attempting to take Crown private in 2015. Though he said the threats, made over e-mail, were “shameful” and “disgraceful,” it surprised him that “Mr. X” could have felt frightened by them.
state of deep personal crisis of my client”
Packer said he has bi-polar disorder and was “sick at the time.” He added that he should have informed shareholders of his condition and he is currently getting medical treatment. Packer’s attorney, Noel Hutley, said that the e-mails were sent during a “state of deep personal crisis of my client” and don’t reflect on his current suitability.
Because of his threats, Packer was asked directly how the NSW regulator could have confidence in his character. This is important because Packer owns 37% of Crown and could be considered a “close associate” of the company. If so, he might be required to sell down his stake to 10% if Crown wants to keep its license.
Lawmakers weigh in
Some of Australia’s legislators had harsh words not just for Crown, but for regulators, as well. Independent federal MP Andrew Wilkie, who has a history of coming at the gambling industry, said: “If Crown is not fit and proper to hold a casino license in NSW, how can Crown be trusted to run a casino anywhere in Australia?”
Tim Read, the Victorian Greens’ acting spokesperson for Integrity, said that the NSW investigation has made Victoria’s regulator look very bad. He explained that the Victorian Commission for Gambling and Liquor Regulation has let Crown’s “outrageous and potentially unlawful conduct” slide repeatedly and should itself be investigated.