A bitter bet: Crown reigns supreme, safe from effective oversight

Nov 2, 2021
Crown casino Melbourne
(Image: AAP/James Ross)

Packer makes a convenient scapegoat for the disgrace of Melbourne’s casino. But an inherently dirty enterprise won’t be fixed by a ​board of cleanskins.

A woman’s time would have been better occupied this week in reading the Victorian royal commission report into Crown casino than in reading the pamphlets by which Scott Morrison announced that he had a plan to have Australia at net zero emissions about the same time Australia is supposed to get nuclear submarines. The former, at least, had substance. It also had loaded words, though not, as the latter, meaningless and vacuous marketing words chosen deliberately for ambiguity.

With the Crown casino inquiry, among the words used by royal commissioner Ray Finkelstein were “disgraceful”, “illegal, dishonest, unethical and exploitative” … “serious misconduct … so callous that it is hard to imagine that it could be engaged in by a regulated entity whose privilege to hold a casino licence is dependent upon it being, at all times, a person of good character, honesty and integrity”.

Crown casino defrauded the Victorian Treasury of several hundred millions in tax by concealing from the regulator the true nature of deductions it was claiming. Its own internal and external lawyers had advised that what it was doing was almost certainly illegal. It was breaching Australian laws, but also conniving with rich gamblers from China to break Chinese currency laws. It displayed “indifference to acceptable conduct”. It bullied and deceived the regulator, and did all that it could to frustrate any investigations into the conduct of the casino, its management or its board.

It pretended to have world’s best practice approaches to problem gambling by vulnerable people, but nothing could have been further from the truth. Many customers had their lives ruined by gambling that should not have happened if the casino had enforced its own rules. The cost to the community was enormous, and not only to gamblers themselves but to many other people and institutions, he said.

Its board, at all stages dominated by well-known men and women of ostensibly high repute, failed to carry out one of its prime responsibilities — to ensure that the casino met its legal and regulatory obligations. Either the boards were not told what was going on, or its members fell asleep at the wheel.

Many senior executives involved in the misconduct were indifferent to their ethical, moral and legal obligations. Some were motivated by a drive for profit; others did what they did because they could. Lawyers hid behind the fiction that their only role was to advise what the law was, rather than to counsel; and advise adherence to the law.

Finkelstein had no hesitation in finding that Crown was unfit to hold its casino licence. But then came the big problem. As the board itself had advised the government, in an effort to intimidate the commission, Crown had become too big to fail. Were it to have its licence taken away, thousands of Victorians would lose their jobs. The state government, which had become hooked on, and morally compromised by, its close relationship with the casino, would lose hundreds of millions in revenue. Instead there is to be a complicated (and in my view unworkable) arrangement by which a former Victorian regulator can stand over the board and management for several years until it cleans up its act.

In short, pretty much what one would expect. Justice Paddy Bergin had more or less found the same thing about NSW aspects of Crown’s operations, and much the same is coming out of Western Australia, another site for Crown Casinos. All are determined that the baleful influence of James Packer, and the squads of senior executives who carried out his every whim, must be removed from any aspect of casino management and control, with Packer required to sell down his substantial interests.

It would suit everyone if all of the management and past board greed, cultural problems, indifference to the law and to any notion of social licence could be laid at the door of Packer. It might even be easy, given the physical and verbal aggression, and sad background of James. His close associates, themselves bullied, became bullies too, bulldozing any opposition, political, or legal. Not for nothing has Crown become the favoured post-career destination of political party organisational folk — ever eager to prostitute their knowledge, access and experience in pulling strings into lobbying for the private business interests of a man with no interest whatever in the public interest.

Blaming Packer helps, at least slightly, to disinfect the reputations of some of those (pre-Packer) who conceived of the casino as a great tourist, culinary and social mecca and architectural feature on the horizon, part of the Kennettesque vision of taking Victoria into the 20th century with Grand Prixes, beggar-my-neighbour events, that mixture of glitz, chintz and tackiness that is such a feature of casino cliché. As some of the lyrical might describe this period, this casino was only incidentally a money churn gouging the poor and the disadvantaged, or even the fabulous “whales” or high rollers from overseas. And, provided it was kept in proportion, who cared, given the restaurants, the entertainment and the ambience?

By this account, the scope for money-laundering, room for organised criminals to horn in on junkets, ways of turning drug money into “winnings”, scope for prostitution and “favours” for pet clients, and money-lending rackets simply did not exist. This was because “world’s best-practice casino regulation’’ would have made it impossible. I have never heard of a casino — actual or prospective — anywhere in the world that has not claimed word’s best-practice external supervision, smart, effective and incorruptible regulators, scrupulously honest operators and proper arms-distance from politicians. Alas most of the evidence suggests that regulator-capture, politician capture and the use of casinos as bases for organised crime is intrinsic to the “industry” — which, depending as it does on human weakness and greed, is never quite honest, never quite clean and is mostly fairly morally disgusting.

Blaming the Packer era also serves as an alibi for the modern board, most of whom can claim, with some reason, to have been innocent of conscious involvement in what the casinos had become, initially over-dependent on what they were told by managers, and, in some cases, a bit over-impressed by press statements drafted by company lawyers and board managers denying any improprieties and threatening critics. Justice Bergin seems to have thought that some of these newer board members, such as former federal minister (and wife of former NSW Supreme Court judge) Helen Coonan, could be the nucleus of a management-rescue that could turn black into white. But she, alas, has found the task too onerous, or distasteful. Jane Halton, a former top Canberra departmental secretary, has so far lasted the distance.

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