Victoria’s royal commission exposed a litany of legal and ethical breaches at Crown.

Victoria’s royal commission exposed a litany of legal and ethical breaches at Crown.Credit:The Age

Meanwhile,major shareholder James Packer will be ordered to sell down his 37 per cent stake in Crown to 5 per cent or less by September 2024,as part of a new ownership cap intended to prevent outside influence on the company.

Crown’s ASX-listed share price soared on the news it would retain the licence for its biggest moneymaker,closing the day 8 per cent higher at $10.45.

Commissioner Finkelstein’s report,released on Tuesday morning,found Crown’s behaviour was “illegal,dishonest,unethical and exploitative”.

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The inquiry – triggered by a series of reports byThe Age,The Sydney Morning Herald and60 Minutes in 2019 – examined Crown’s irresponsible treatment of problem gamblers and how it knowingly broke laws and regulations,dodged Victorian taxes and refused to co-operate with the state’s gambling regulators.

“For many years,Crown Melbourne had engaged in conduct that is,in a word,disgraceful”,Commissioner Finkelstein’s report says.

“Some was so callous that it is hard to imagine it could be engaged in by such a well-known corporation.

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“When these facts came to light,it was inevitable that Crown Melbourne would be found unsuitable to hold its casino licence.”

But the former Federal Court judge did not call for Crown’s licence to be cancelled,after considering the extensive reform process underway at Crown as well as the “considerable harm” cancellation would inflict on the Victorian economy and “innocent third parties”.

Crown contributed around 1 per cent of Victoria’s state tax revenue before COVID-19. It employs about 11,500 people in Melbourne.

The royal commission report recommended that James Packer,who owns 37 per cent of Crown,should have to sell down his stake to under 5 per cent by 2024.

The royal commission report recommended that James Packer,who owns 37 per cent of Crown,should have to sell down his stake to under 5 per cent by 2024.Credit:Getty Images

Victoria’s Gaming Minister Melissa Horne said on Tuesday the government supported all 33 of the report’s recommendations in principle,subject to consideration and consultation. She said that Stephen O’Bryan,the first commissioner of the Independent Broad-based Anti-corruption Commission (IBAC),would be Crown’s “special manager”.

Mr O’Bryan will have access to all areas of the casino and be able to veto board decisions. If he is not satisfied Crown is fit to hold its licence after two years,it will be cancelled.

Premier Daniel Andrews said in question time on Tuesday that Crown was “more than on notice”.

“Their licence will be terminated,and it will terminate in two years’ time,unless and until they can demonstrate that they are fit and proper to hold such a licence,” he said.

Victoria would also ban the “junket” tour operators Crown worked with,who were shown to have extensive links to organised crime. The maximum penalty for Crown,if it breached gambling laws,would also be increased from $1 million to $100 million,Ms Horne said.

The Alliance for Gambling Reform said the Finkelstein report recommended positive first steps to tackling gambling harm at Crown,but it missed crucial problems,such as the casino’s 1000 “unrestricted” poker machines – which operate without any maximum bet limit – and its loyalty schemes.

The government should act on these issues after ripping up the controversial licence clause that entitlesCrown to up to $200 million compensation for any changes the government imposes on its operation,said the alliance’s lead Victorian campaigner,Rose O’Leary.

“We welcome the commitment today from the gambling minister to do so with legislation,” Ms O’Leary said. “Most vitally,we need to ensure that all consultation on proposed changes to the law include those with lived experience of gambling harm at the table.”

Crown’s chief executive Steve McCann,who joined the company in July amid a clean-out of its board and senior management,said Tuesday’s findings provided “a way forward”.

“We are embracing the challenges ahead of us as we work to restore our reputation,and we are determined to get this right. We will be a better Crown,” he said in a statement.

United Workers Union casinos director Dario Mujkic said the unions’ members would “breathe a sigh of relief” to now have some job certainty for the next two years.

“It is clear that Crown’s conduct as outlined in the report was unacceptable and the union welcomes the recommendations outlined by the commissioner,which seek to balance suitability and integrity with the impact an immediate licence cancellation would have had on staff and others,” Mr Mujkic said.

Culprit ‘lives to see another day’

The Victorian Opposition’s gambling spokeswoman Steph Ryan welcomed the commission’s findings,but said its terms of reference were too narrow and should have included Crown’s relationship with the government and the failings of the state’s gambling regulator.

“You have to ask how[the government] could be so incredibly blind to the conduct that the commission has uncovered in this report. We’ve been hearing this for years,” Ms Ryan said.

The Andrews government called the royal commission after an independent inquiry in NSW found in February that Crown was unfit to hold thelicence for its new Sydney casino in light of evidence it had been infiltrated by organised crime.

Victorian Greens leader Samantha Ratnam said the outcome showed Crown was “too big to fail”. She called on the government to halve its number of poker machines,and implement stronger harm-minimisation measures and fairer taxes.

“This is the biggest scandal in Victoria’s corporate history,and yet its culprit is living to see another day,” Ms Ratnam said.

Pokies limits,cash ban

Crown will need to make significant changes to the way it operates its gaming floors to minimise the harm it causes problem gamblers.

Commissioner Finkelstein recommended that anyone playing a poker machine at the casino should be made to set a daily,weekly or monthly time-and-loss limit before they start gambling. Poker machine players would also be forced to take a 15-minute break from gambling every three hours and would be banned from playing for more than 12 hours in any 24-hour period,with a maximum play time of 36 hours in any week.

All patrons would have to use a Crown identity card that tracked their gambling at the casino. Cash transactions would be limited to $1000,to make it harder for criminals to launder the proceeds of crime at the casino.

Commissioner Finkelstein wrote that the way Crown dealt with people with gambling addiction was “perhaps the most damning discovery by the commission”.

“Crown Melbourne had for years held itself out as having a world’s best approach to problem gambling. Nothing can be further from the truth,” he wrote.

The royal commission revealed Crown Melbourne’s cavalier approach to gambling addiction,allowing patrons to gamble for 18 hours straight and employing a tiny “responsible gambling team” to monitor its 2628 poker machines and 540 table games.

The inquiry also heard how Crown illegally acceptedcredit card payments in exchange for chipsthrough its hotel desk,in a fraud designed to enable Chinese patrons to get around China’s tight capital controls.

And it was also revealed that Crownunderpaid tax on its poker machine winnings to the Victorian government by making illegal deductions,potentially short-changing the state by up to $272 million.

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The NSW government suspended Crown’s licence for its new Sydney casino in late 2020 after an independent inquiry there found the group enabled money laundering at its Melbourne and Perth casinos and had gone into business with figures linked to organised crime.

The NSW inquiry and subsequent royal commissions in Victoria and WA,which is still underway,were triggered by a series of reports byThe Age,Sydney Morning Herald and60 Minutes in 2019.

The string of scandals and public inquiries has triggered an almost complete clean-out of Crown’s senior management and board of directors.

Key points from the Royal Commission report

  • Commissioner Ray Finkelstein QC found the casino had engaged in conduct that was “variously illegal,dishonest,unethical and exploitative”.
  • The report accused Crown Melbourne’s board of failing to carry out one of its prime responsibilities;“to ensure that the organisation satisfied its legal and regulatory obligations”.
  • In weighing up whether to recommend Crown’s licence be cancelled,the commission said it considered the overriding need to maintain the integrity of the licensing system,the potential harm to “innocent third parties” such as staff and whether Crown could ‘remake’ itself.
  • The Commission found that Crown’s decision to embark on “a significant reform program” at great financial cost tipped the balance against the cancellation of its licence.
  • Victoria’s Gaming Minister Melissa Horne says the Royal Commission found that Crown had failed but she said the government would put in place the most stringent conditions in Australian corporate history and by putting Crown on probation,“there is a pathway to reform”.

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