Crown Saga Continues With New Perth Casino License Probe

  • GWC called for an inquiry into Crown Perth’s license suitability following a Tuesday meeting
  • Decision comes after New South Wales’ gambling body deemed Crown unfit for a Sydney license
  • Investigation will assess a number of factors, including the suitability of Crown’s associates
  • Operator’s revenue fell 62% for H1 of its financial year to a total of AU$581m (US$452.2m)
Crown Resort's casino in Perth
After a recent Bergin inquiry raised issues with Crown Resorts’ operations, Western Australia’s gaming regulator has called for a review of the license for Crown Perth Casino (pictured above). [Image: Shutterstock.com]

Update: The Victorian Government in Australia has established a Royal Commission into Crown Resorts’ suitability to hold a casino license for its flagship Melbourne property. The decision, announced February 22, comes in the wake of New South Wales regulators’ conclusion concerning the company’s unsuitability as a Sydney casino licensee.

Another blow for Crown

Still reeling from the denial of its Sydney license, Australian operator Crown Resorts could be in for more difficulties. Western Australia’s (WA) gaming regulator has now called for its own review of Crown’s Perth casino license. 

Crown currently operates Perth’s only casino in Burswood

After a meeting on Tuesday evening, the Gaming and Wagering Commission (GWC) said it would launch an inquiry to judge Crown Perth’s casino license suitability. Crown currently operates Perth’s only casino in Burswood.

The move comes just one week after a New South Wales (NSW) inquiry deemed Crown unfit to hold a Sydney license. The resulting 751-page Bergin report denied the operator the opportunity to open its AU$2.2bn (US$1.7bn) Barangaroo casino. On Tuesday this week, Crown Resorts received an official letter from the state’s Independent Liquor and Gaming Authority (ILGA) confirming its unsuitability.

Bergin report prompts concern

The Bergin report brought to light a number of issues regarding Crown Resort’s operations. This included evidence of money laundering at Crown casinos and ties to organized crime through junket operators. Shortly after its publication, a number of Crown executives and board members stepped down from their positions, including Ken Barton, former CEO and managing director of the company.

Paul Papalia, the state’s Minister for Racing, Gaming and Liquor, will head the WA inquiry

In a statement following Tuesday’s emergency meeting, the GWC said it is unable to judge Crown Perth’s license suitability on the results of the NSW inquiry alone. For that reason, the body called for an independent investigation into the casino. Paul Papalia, the state’s Minister for Racing, Gaming and Liquor, will head the WA inquiry.

The GWC outlined a number of areas it hoped to investigate through the inquiry. This included the suitability of Crown Resorts to hold a license, in addition to the casino operator’s “close associates”. The body also aims to assess its own effectiveness in discharging its regulatory responsibilities, “inclusive of any perceived conflicts of interests.”

This latter point makes reference to the former chief casino officer for the GWC, Michael Connolly. Last week, he resigned from his position because of a personal association with Crown Perth staff. Connolly maintained friendships with Crown employees, at one point organizing a fishing trip with members of the operator’s legal and compliance team.

Operator’s revenue tumbles

In addition to licensing issues, Crown Resorts’ latest trading update indicated a significant decline in revenue for the first half of its financial year. Statutory revenue dropped 62% year-on-year for the six months ended December 31 2020, to a total of AU$581m (US$452.2m). Meanwhile, EBITDA fell by 99% from the prior year, to AU$4.4m (US$3.4m).

The operator attributed this in part to the closure of its casinos during coronavirus lockdowns. In total, Crown casinos incurred closure costs of AU$58.1m (US$45.2). Crown Melbourne remained shuttered for the majority of H1, leading to a revenue decline of 91%. In contrast, Crown Perth’s revenue fell just 5%.

Helen Coonan assumed the role of managing director for Crown after Ken Barton stepped down as CEO. Commenting on the company’s financial results, she said the revenue decline reflected “the severe impact on operations” from the pandemic. Despite this, she praised the improvement in Crown Perth and described “encouraging property visitation” for Crown Sydney, despite the lack of casino gaming.

As a result of the NSW inquiry, Crown Resorts opened its Sydney facility in December last year without its casino. The property offers restaurants, bar service, and hotel accommodation.