James Packer’s hopes of operating his prized Barangaroo property as planned have seemingly been dashed, after a damning report deemed Crown Sydney unsuitable to hold a casino licence.
The report followed an inquiry commissioned by the NSW Independent Liquor and Gaming Authority (ILGA) into suspicious activity within the accounts of VIP players at Crown casinos, and it certainly wasn’t short of criticism towards the gaming and hospitality giant.
Crown halted the commencement of gaming operations at Crown Sydney (also known as ‘Packer’s Pecker’) until after the inquiry’s findings were released, after the company dropped a money laundering bombshell during the probe in November last year.
The $2.4 billion Barangaroo project also includes a 350-room hotel, along with 14 bars and restaurants, which have already opened to the public.
Commissioner Patricia Bergin’s report found Crown to be unsuitable in its current state to operate a casino at the Barangaroo property, and said the company’s cultural changes would need to be overhauled for that to change.
“Any applicant for a casino licence with the attributes of Crown’s stark realities of facilitating money laundering, exposing staff to the risk of detention in a foreign jurisdiction and pursuing commercial relationships with individuals with connections to Triads and organised crime groups would not be confident of a positive outcome,” the report said.
“It is obvious that such attributes would render an applicant quite unsuitable to hold a casino licence in New South Wales.”
Bergin said the inquiry had exposed a number of problems that would have otherwise remained unearthed and unresolved.
“Mr Packer’s observations of the distressing nature of the unfolding evidence in this inquiry both for himself and for the members of the Crown board is understood and appreciated,” she said in her report.
“However, where a public company has the status of being a close associate of a casino operator in this state, the expectations of its corporate character are very high indeed.
“There is little doubt that members of the Crown board were lulled into a false sense of comfort not only by reason of the financial fortunes and successes of the company over the years, but also by the deep problems with management not translating and transmitting the real problems that beset it.
“There is no doubt that the lines of reporting were blurred, risks were not properly identified, identified risks were not properly notified, conflicts or potential conflicts were not recognised, and the corporate needs of Crown were not given precedence over the corporate needs or desires of [Consolidated Press Holdings – Packer’s investment vehicle].
“There is no doubt that Crown has been scrambling to keep pace with the exposure of the problems during the public hearings and match them with proposed remedies.
“The proposed remedies should have been identified by Crown without the necessity for an inquiry such as this.”
Crown issued a statement yesterday saying it was considering the inquiry report.
“Crown will work with the New South Wales Independent Liquor and Gaming Authority (ILGA) in relation to the findings and recommendations of the inquiry report as contemplated by the regulatory agreements between Crown, ILGA and the State of New South Wales,” the company said.
It has since announced that Guy Jalland and Michael Johnston have resigned as directors of Crown.
Last year, Crown settled an appeal from Infrastructure New South Wales (INSW) out of court over the development authority’s challenge to a NSW Supreme Court ruling in favour of the property developer.
This stemmed from INSW’s consideration of various bids to develop Central Barangaroo without first discussing and negotiating with Crown ways to retain the sightlines of Crown’s Barangaroo property.
