Crown’s path to redemption to be guided by royal commission 

By William Brown Updated
Crown’s willingness to ban junkets called into question at Victorian royal commission

With Crown Resorts’ suitability to hold a casino licence at its Melbourne venue called into question, the ABC looked at the venue’s history, from when it first opened in 1997.

From humble beginnings, Crown has grown to be Victoria’s largest single-site employer, with more than 15,000 staff across its hotels, function rooms, restaurants and entertainment facilities.

In 2014, the Napthine Coalition government extended Crown’s Melbourne casino licence until 2050, and now Premier Daniel Andrews said he is prepared to revoke that agreement if a royal commission says Crown should lose its licence.

“This is a royal commission to determine whether they’re fit to hold that licence So if you’re having that process, you have to be clear that you’ll implement the findings,” Mr Andrews said.

Four key experts have weighed in on whether or not Crown’s Melbourne licence will actually be ripped up.

The most likely outcome appears to be Crown retaining the licence, as long as it makes some changes.

“The finding could be that Crown has major problems and they need to improve their structure,” Asian Gaming Consultant Ben Lee said.

Even if Crown is found to have breached the law, Swinburne corporate governance expert Helen Bird said it may have been a contractual agreement, which means the licence can’t easily be revoked.

“No one knows what the contractual arrangements are between Crown Resorts and the Victorian government,” Ms Bird said.

“I suspect there could be a provision in the contract, that would put limits on the regulator in Victoria to remove the licence without some substantial attempt to fix the failings first.”

When the NSW regulator found Crown was unfit to run a casino in Sydney, instead of being immediately stripped of its licence, it was given a chance to fix the problems.

If the Victorian royal commission makes an adverse finding against Crown, Ms Bird thinks the same could happen due to legal obligations.

She wants future casino licencing contracts to be made public.

In the event Crown continues to operate its Melbourne venue, chief advocate for the Alliance for Gambling Reform Tim Costello said “it needs to do so with much tighter restrictions that are effectively and consistently enforced.”

If the commission finds Crown is unfit to run a casino, the licence could be revoked and go to another operator.

In this event, the government would appoint an administrator while the licence went out to tender.

Mr Lee said this would be the “worst case for Crown”.

Potential casino operators close to home 

Alternative operators could include the Star Entertainment Group, which runs The Star casino in Sydney or Auckland-based SkyCity Entertainment, which runs the casino in Adelaide.

One expert even suggested the government could take over the licence if a suitable private operator couldn’t be found.

“Crown operates many other hospitality functions on the same site as their gambling operations, complicating what happens there,” Mr Costello said.

Because Ms Bird suspects Crown has a contractual arrangement that prevents its licence being easily removed, she thinks the only way another operator might end up running the casino is if the company went broke.

“With inquiries underway in NSW, WA and Victoria and coronavirus killing off international trade, you have a lot of issues hitting the profit line of the company,” she said.

“All of this points to the possibility of there being financial difficulties and the appointment of an administrator, and that’s when you might see the possibility of a new operator. But not in the short-term.”

Last week, Crown Resorts reported a $120 million loss for the second half of 2020.

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