Despite the damning findings handed down by the Perth Casino Royal Commission, Crown will be allowed to continue trading under the watchful eye of a new independent monitor.
Despite the damning findings handed down by the Perth Casino Royal Commission, the state government will allow Crown to continue trading under the watchful eye of a new independent monitor.
The 994-page report found Crown Perth and its subsidiaries unfit to hold the state’s only casino licence, but stopped short of recommending the licence be revoked.
It made 59 recommendations, all of which have today been accepted by the state government.
The report is a product of almost 60 days of public hearings, called in the wake of a damning report that accused Crown of laundering money through subsidiaries’ bank accounts at its Perth and Melbourne operations.
The inquiry, led by commissioners Neville Owen, Lindy Jenkins and Colin Murphy, found deficiencies in the way that both the Gaming and Wagering Commission and the Department of Local Government, Sport and Cultural Industries had performed their functions.
The report attributed the GWC’s lack of be vigilance and failure to exercise its powers to inadequate support by the department, having been allocated more duties without sufficient expertise and funding.
It also found that failure had a ripple effect, contributing to Crown’s failure to mitigate money laundering and junkets with links to organised crime at its Perth casino.
Racing and Gaming Minister Tony Buti told parliament this morning the state government would take action immediately.
That included appointing an independent monitor to oversee remediation work at the casino for a two-year period, including prescribing appropriate functions and powers.
A legislative amendment to empower the minister to direct the GWC to mitigate risks and the GWC to direct the casino operator to implement the report’s recommended measures will be among the first of the recommendations introduced.
Under the amended legislation, the GWC will be led by an independent chair and deputy chair.
The state has also vowed to investigate a new act which will supersede the 38-year-old Casino Control Act, with harsher penalties and a better regulatory system.
The inquiry labelled the state’s regulatory framework “anachronistic” and not fit for purpose.
“It was flawed from conception in that it failed to identify the legislative objectives of casino regulation and to clearly express the associated duties and powers of the regulator to meet those objectives,” the report stated.
Dr Buti said it was clear standards at the casino giant had eroded over the past few decades, integrity had been lost and transparency had diminished.
But he also highlighted that the casino giant had already taken steps to address the issues raised regarding its suitability to continue as licensee, overhauling its corporate governance, culture, junkets and responsible gambling.
Similarly, he said the government had begun improving supervision of the casino’s operations, but conceded more needed to be done.
He also dismissed the possibility of the increased penalties introduced under any new act being applied to Crown retrospectively.
“Put simply, in many cases, Crown has demonstrated poor corporate citizenship,” he said.
“It is a proven privilege to hold a gambling license in Western Australia and the Royal Commission has shown that Crown has at times abused that privilege.
“Crown needs to do better, but so does the state regulator.”
But Dr Buti was quick to defend the state government’s decision to not immediately terminate Crown’s licence, telling reporters the GWC was in the process of conducting a probity review of Blackstone, which has lodged a takeover offer for Crown.
Despite the shortcomings identified in the report, Dr Buti said he expected the GWC could fulfil that task.
“I do have confidence they will be able to do the appropriate probity [review] of Blackstone,” he said.
Dr Buti said there was no guarantee problems would not recur but, once the reforms were adopted, he was “confident we will have a system that will be incredibly robust”.
He also emphasised Crown’s role as one of the state’s largest employers, a significant contributor of tax revenue and a major tourist attraction.
“Importantly, this is about remediation not revocation, and protecting the jobs of thousands of employees at Crown casino,” he said.
“We're talking about 5,000 employees.
“If there was a termination of a license immediately, where would those 5,000 employees go?
“There's a pathway forward and that is that Crown or any company that takes over Crown will comply with that remediation package.”
But Mr Owen’s appointment and his actual or perceived conflicts of interest were also controversial, after it was revealed he had personal and commercial ties to billionaire Kerry Stokes and a joint venture with Tim Roberts (who was grilled before the inquiry).
When quizzed about Mr Owen’s appointment and whether he was still confident in his ability to fulfil that role, Dr Buti did not mince his words.
“A nearly 1,000-page report with 59 negative recommendations that provides a negative finding for Crown,” he said, waving the report.
“I think that tells us all…”
The report’s delivery comes just weeks after the nation’s financial intelligence agency confirmed it would take Crown Perth to court over allegations it breached anti-money laundering and counter-terrorism financing laws.
