Crown Resorts Begs for Victoria License as Two More Top Execs Relieved
Commissioner Ray Finkelstein in Melbourne on Tuesday wanted to know the difference between Australian casino giant Crown Resorts and a car thief.
This unusual line of inquiry came after lawyers for Crown had offered final submissions as to why the operator should keep its Victoria gambling license in the face of claims of tax evasion and anti-money laundering failings.
Michael Borsky QC told a hearing of the royal commission examining Crown’s suitability that the company apologized for its past mistakes and committed itself to reform. It should be trusted to deliver on that promise, he said.
Borsky emphasized that the Crown Melbourne was an integral part of Victoria’s economy, employing some 12,000 people.
‘Not How It Works’
“You’d pay unpaid taxes, pay a few costs, but you don’t actually suffer any consequence,” mused Finkelstein. “That is, you can commit wrong for a decade of various kinds, and come along and say, ‘Well, we’ve fixed it, so don’t worry about it.
“If I was a car thief, and went to the criminal court and said, ‘I’m not going to steal a car again, don’t worry about it, take my word for it,’ and they just let me go – it’s really not how the system works, is it?” Finkelstein asked.
“Not only is it not how the system works, it’s not what the public expects,” added the former federal court judge.
Finkelstein said he did not buy that Crown employees’ jobs were at risk, because the casino was a highly profitable business, which meant another company would happily come in and take over.
Coonan, Walsh, Heads on the Block
The exchange did not bode well for Crown, which relies on the Melbourne property for up to 75 percent of its profits and is desperate to retain its Victoria license. It lost its right to operate casino gaming in New South Wales following a similar investigation.
Finkelstein has already opined that Victoria might be better served by a casino company that was at least partly owned by the state, suggesting a complicated restructuring could be in the cards.
On Monday, analysts for JP Morgan said they expected Finkelstein to find Crown unsuitable, but that the operator would be permitted to keep its license.
It’s likely the license cancellation will be deferred by several years, allowing Crown to make good on its promise, they said.
But the company will be expected to undergo profound reforms and initiate widespread sackings before it can be rehabilitated.
It seems the board got the memo. Crown announced Tuesday that Crown Melbourne CEO Xavier Walsh would be parting ways with the company, as would Crown Resorts chair Helen Coonan, a former federal Communications minister.
Finkelstein is scheduled to decide on the royal commission’s findings on October 15.
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