Crown has confirmed that its board had appointed an external legal counsel to investigate the accusations.
“In accordance with Crown’s governance protocols,we have engaged external counsel to conduct an independent review of these matters. Until such time that the review is complete,we are unable to comment further,” Crown said in a statement.
And it isn’t the only Sherlock on the case.
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The Victorian regulator,the Victorian Gambling and Casino Control Commission,said on Wednesday that it was aware of an internal matter involving Crown and was “actively investigating”.
And so is the Office of the Special Manager,which said it was “aware of Crown’s investigation into allegations concerning the Crown Resorts CEO. The OSM is monitoring this matter as part of the Special Manager’s independent oversight of Crown’s Melbourne casino,and will liaise with the Victorian Gambling and Casino Control Commission as appropriate.”
Two years ago,a Victorian Royal Commission into Crown Melbournefound it was unfit to hold a licence in Victoria after what commissioner Ray Finkelstein called a “disgraceful” litany of legal and ethical breaches.
Finkelstein allowed it to retain its licence provisionally,but recommended Crown be given two years to reform itself under the supervision of a government-appointed “special manager”.
Blackstone was essentially in charge of the clean-up job,which has proven to be costly to profitability.
Crown Resorts posted a $199 million loss in the 2023 financial year as the cost of remediation,financial penalties and improved compliance measures at its casinos combined with the cost-of-living crunch to wipe out its profits.
Meanwhile,the special manager’s regulatory baby-sitting period is now almost up.
If the latest allegations,which have not yet been investigated,are found to hold any substance,Blackstone will be under intense pressure to replace Carruthers quickly and address the issues that the security staff have identified.
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The private equity fund will need to convince the special manager and the regulator that any alleged lapses in behavioural protocols are one-offs rather than systemic.
Blackstone took control of Crown in mid-2022 in an $8.9 billion deal that with the value of hindsight appears to have been great for Packer and increasingly less successful for Blackstone.
Meanwhile,Crown’s competitor in NSW,The Star,is also feeling the heat from regulators that are not yet convinced it has reformed sufficiently to operate without external supervision.
It was similarly the subject of a damning inquiry,which identified extensive money laundering and counterterrorism failings. Several members of Star’s former executive management and board are the subject of a court action brought by the Australian Securities and Investments Commission which is claiming they failed to give sufficient focus to the risk of money laundering and criminal associations that led to the finding that Star was unsuitable to operate its casino in Sydney.
Star has six months to get its house in order or risk losing its licence.
Neither of these casino operators can afford any slip-ups.
They were given a chance to rehabilitate their operations by state governments concerned about the detrimental effects on employment and the economy if casino doors were to close.
The governments will soon be running out of patience.
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