Crown casino could be taken over by another company royal commissioner says
The head of the Victorian royal commission into Crown casino says the company would be getting away with criminality if it was allowed to continue running its Melbourne casino unhindered.
Crown Resorts announced its chief executive Xavier Walsh would step down half an hour before commissioner Ray Finkelstein, QC, began the final hearings of the months-long probe that has uncovered illegal behaviour. Crownâs lawyer said on Tuesday it âacceptsâ the findings and âapologisesâ for them.
Xavier Walsh leaving the royal commission last month.Credit:Eamon Gallagher
Mr Finkelstein, who referenced the possibility of another company taking over the casino, questioned submissions made by Crownâs lawyers urging him to allow the casino to continue with an independent monitor to oversee governance reforms and help the company return to being an acceptable casino operator.
While Crown conceded Mr Finkelstein would be within his rights to find the company âunsuitableâ, the casinoâs lawyers argued cancelling or suspending the licence would cause it to default on loans, cost thousands of jobs, harm Victoriaâs economic recovery and deprive the state government of revenue. Crown said it would also be open to the commissioner to find the company suitable to hold a licence.
Mr Finkelstein said Crownâs suggestion of appointing a powerful monitor posed âno real consequenceâ for the James Packer-backed company, which was blocked from opening a Sydney casino earlier this year.
âPay unpaid taxes, pay a few costs, but you donât actually suffer any consequence. That is, you can commit wrong for a decade, of various kinds, and come along and say âwell weâve fixed it, so donât worry about itâ,â Mr Finkelstein, a former judge, said.
âIf I was a car thief and went to the criminal court and said âI wonât steal a car again, donât worry about it, take my word for itâ, and they just let me go, itâs really not how the system works is it?â
âNot only is it not how the system works â" itâs not what the public expects.â
In response, Crown lawyer Michael Borsky, QC, said: âWe donât submit âdonât worry about it, Iâve fixed itâ. We donât even submit that itâs all fixed yet.â
âWe also do point to the fact that there have been consequences,â he said, pointing to company officials who have resigned and shareholders who have lost equity. âCrown has learnt a lesson.â
Crown employs more than 10,000 people at its Melbourne complex, more than any other site in the state. It is facing a royal commission in Western Australia as it seeks to rehabilitate at the request of a NSW inquiry that found it facilitated money-laundering and should not operate a Sydney casino.
Premier Daniel Andrews has been criticised by gambling reformers and the opposition for refusing to investigate Crown as evidence of wrongdoing emerged. His government said on Tuesday morning that a new regulator focused solely on casino management would be established.
Last month lawyers assisting the commission argued that Crown should be found unsuitable to hold a licence. If Mr Finkelstein recommends Crownâs licence be cancelled or suspended, the current regulator â" the Victorian Commission for Gambling and Liquor Regulation â" would need to prove there was adequate evidence under the law to take that action.
Several board members have left Crown Resorts this year and executive chair Helen Coonan will announce her departure by the end of the month as the company aims to shed association with members of âold Crownâ.
Mr Borsky said Crown accepted the key failings revealed by the Victorian probe, including up to $480 million in tax underpayment, a lack of co-operation with the regulator and illegal hotel transactions that may have facilitated money laundering.
Posing a quandary likely to weigh heavily on Mr Finkelsteinâs decision-making, the Crown silk said the commission needed to âstrike a balance between rightly condemning the past failingsâ and acknowledging the stated intention of the new board to improve governance.
âYour task is not punitive or deterrent ⦠it is to find the best solution in the public interest looking forward,â Mr Borsky said.
âCancellation or even suspension ⦠would have the very real potential to trigger event of default that would put in jeopardy the significant public benefits that Crown would otherwise continue to provide the state.
âThe terms of reference require you to have regard to those considerations and to have regard for the financial impact on the state.â
Mr Borsky said the company had paid $1.4 billion in tax to the Victorian government since 2014 and said almost all its shareholders were small investors who would take the hit for wrongdoing they had no involvement in. About 10 per cent of all hotel rooms in Melbourne were supplied by Crown, which he said was crucial to the stateâs ability to host major events.
Crown also argued there was no evidence another casino operator had anti-money laundering expertise similar to Crownâs and warned that thousands of workers could face financial distress if the companyâs future was in jeopardy.
But Mr Finkelstein interjected and said employees could retain their positions under new management, albeit with some level of disruption.
âI donât need a business person to tell me that if thereâs a profitable business, thereâs a buyer. I know that,â he said.
âThe choice might be between you running a casino and someone else running a casino.â
One option open to Mr Finkelstein is to recommend Crown only be allowed to operate the hotel and hospitality components of their business, but not the gambling section. Mr Borsky said Crown opposed this.
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Paul is a Victorian political reporter for The Age.
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