Casino's broken Crown

Australia’s had its fair share of governance scandals in the past few years. Up the top of the list has been ASX-listed Crown Resorts Ltd, part-owned by James Packer. Crown runs casinos in Melbourne and Perth and holds a licence for a new casino in Barangaroo in Sydney.

In August 2019, an Inquiry was initiated to review Crown’s suitability as an operator in Barangaroo after media allegations of illegal and improper conduct including money laundering.  

This week, former NSW judge, Patricia Bergin SC tabled a report of more than 700 pages in the state parliament essentially finding that Crown and its Sydney subsidiary were unsuitable to hold a casino licence at Barangaroo – although the door has been left open if Crown can change its ways.  Fall out has already begun with the resignation of directors. 

The report notes that many of the suitability problems “stem from poor corporate governance, deficient risk management structures and processes and a poor corporate culture.” The report considers in detail the corporate character of key personnel including the chair, the CEO, management, directors and former directors. There are scathing findings and observations.

The report outlines actions for Crown to take to help meet suitability requirements including:

• carrying out a full and wide ranging forensic audit
• addressing issues of major shareholder influence
• restructuring the board of Crown and its Sydney subsidiary and
• ensuring appropriate director training.

Other formal recommendations are focused on systemic change including amendments to NSW’s casino legislation.

Crown issued a statement this week saying that it’s considering the report and will work with the NSW Independent Liquor and Gaming Authority in relation to the findings and recommendations.  The Authority is also considering the report.

See the full report