Crown Resorts Limited has been under siege recently. Multiple inquiries are currently underway across multiple jurisdictions. Allegations include breaches of money laundering regulations, use of the casino by criminal figures, including an arms dealer the subject of UN sanctions, and that immigration and customs requirements have been effectively waived for high rollers from overseas, including some with Interpol red notices for criminal activity.
The acquisition of 10% of Crown by James Packer’s friend, and sometime business partner Lawrence Ho, is under scrutiny in NSW, where the regulator wants to determine whether the acquisition breaches the licence for Barangaroo, and whether Mr Ho is a person of ‘good repute’. Mr Ho has also agreed to buy a second, similar tranche once the inquiry is concluded, all being well.
The Australian Law Enforcement Integrity Authority is investigating whether there was corruption in interactions between the Department of Home Affairs and Crown. It was scheduled to hold public hearings beginning on Tuesday 29 Oct, but these have been postponed because a key witness is currently unavailable. That witness is thought to be Roman Quaedvlieg, former Chief Commissioner of the Australian Border Force. Additionally, other witnesses have now come forward.
In Victoria, inquiries are currently underway into the probity of Mr Ho’s company, Melco, and the allegations around criminal involvement, money laundering, and the regulatory arrangements surrounding junkets.
Amidst all this, Crown’s AGM, held last week, was always going to be a little fraught. Given that revenue has declined by nearly 10% (as high rollers stay away), shareholders might be forgiven for being a little testy. Crown’s board has some impressive members: Helen Coonan, former Federal Liberal Minister; Andrew Demetriou, former CEO of the Australian Football League; Jane Halton, former Secretary of the Federal Department of Health (and closely implicated in the ‘Kids Overboard’ incident); former Australian Chief Medical Officer John Horvarth; Harold Mitchell, media buyer par excellence; and John Alexander, Executive Chairman and former senior executive of, amongst other companies, the Fairfax papers, and Publishing and Broadcasting Limited (PBL). Heavy hitters, all.
Of the questions asked at the AGM, two of them came from long time anti-gambling advocate Tim Costello, and shareholder activist and former PR for the Alliance for Gambling Reform, Stephen Mayne. Both asked about the scandals. Costello wanted to know whether Alexander should pre-empt all the fuss and call for a Royal Commission into the casino business. Alexander was not interested. He blamed them on unproven allegations raised by anti-gambling activists. He wasn’t interested in discussing Crown’s $300,000 fine, imposed by the Victorian regulator over pokie tampering allegations. It was, he said, ‘an operational oversight’. Nothing to see here, in other words.
Clearly, the current imbroglio is unfamiliar to Crown, its Directors, and its shareholders, including in particular Mr Packer. Crown appears to have extraordinary influence in Victoria, and everywhere it operates in Australia. The proposal for the Barangaroo development in Sydney sailed through an unorthodox approval process (despite a one casino policy being in effect at the time the proposal was made). In Melbourne, the casino is allowed to operate unrestricted pokies (i.e., no limit on bets, no limit on how fast they can spin, no limit on prizes), has smoking areas and ATMs on site, can operate 24 hours a day, and is indemnified to the tune of $200 million should the state introduce certain harm minimisation measures. No other Victorian gambling operators have any of that.
Crown’s casinos in Melbourne and Perth are also monopolies. That of itself is a certain privilege.
Politicians from both major political parties are notable in their support for Crown, which is hardly surprising given that Crown donated $2,708,754 to them between 1998 and 2018. PBL (an associated entity) donated a further $282,675, and Mr Packer’s mother Roslyn Packer donated a further $1,080,000 over that period – to the Liberal Party. There have been fluctuations in the proportion going to either of the major parties over this period, but generally both parties do very well from the Crown business and its associated entities.
Crown is also a home for former public servants, party apparatchiks and politicians, as the board membership and employee ranks attest. Karl Bitar, former ALP National Secretary, Mark Arbib, former ALP Senator, Peta Credlin, former Chief of Staff to Liberal PM Abbott all ended up working for Consolidated Press Holdings (a Packer holding company). Helen Coonan is, of course, a prominent member of the board, as are Jane Halton and John Horvarth. A former key adviser to Victoria’s Labor Premier, Daniel Andrews, started a new job at Crown last year, and the Premier himself happily admits to regularly speaking to people ‘down at Crown’ (and to the Australian Hotels Association). Nothing wrong with that of course. But it does emphasise the importance of Crown in the eyes of the government.
Crown is estimated to contribute about $238 million in gambling taxes to the Victorian budget for 2019-20, or about one per cent of the state’s taxation revenue. It’s a big employer, with a claimed 12,500 people working at the Melbourne casino complex (or ‘across the resort, as the Annual Report puts it). It also claims over 22 million visits per year. On these grounds alone, it may be an entity that politicians fear to meddle in too closely.
The Crown board rebuts all the allegations, and the various inquiries are all still in progress. However, it is hard to escape the conclusion that the gloss has come off the business. Whether there is substance to the multiple claims of impropriety by Crown, its staff, and various authorities remains to be proven. Nonetheless, the seeming withdrawal of Mr Packer from the business as evidenced by his desire to sell down his stake, may make it a little less impregnable than was ever previously the case. Crown’s current troubles (largely fuelled by whistle blower accounts, it must be noted) echo the words of Edward Gibbon in The Decline and Fall of the Roman Empire: ‘The decline of Rome was the natural and inevitable effect of immoderate greatness’.
Crown has certainly been seen as immoderate. Its greatness might be questionable. Perhaps its decline is inevitable. We shall see.
Charles Livingstone is Associate Professor, School of Public Health & Preventive Medicine Monash University