The inquiry into Crown’s operations revealed several compliance issues and failures, including engaging with junket operators tied to organized crime without proper due diligence. This put employees at risk and demonstrated Crown’s “unjustified belief in itself” and “corporate arrogance.” Serious claims against the business were not thoroughly investigated and instead dismissed as deceitful. However, certain changes, such as compliance and financial audits and ending dealings with junkets, could allow Crown to continue operating its resort.
The New South Wales Independent Liquor & Gaming Authority initiated the inquiry in August 2019, led by former judge Patricia Bergin. The inquiry was prompted by allegations in the Australian press after Melco, an Asian gaming giant, agreed to acquire a 19.99% stake in CPH Crown Holdings. The purpose of the inquiry was to assess Crown’s suitability as a licensee for the Barangaroo integrated resort in Sydney and determine necessary changes. It also examined Melco’s suitability as a close associate and if the deal violated the Barangaroo license.
During the inquiry, evidence of money laundering was found, both through Crown’s subsidiaries’ accounts and at its own facilities. This included multiple deposits just under the reporting threshold and failure to provide requested transaction information for a customer involving $15 million. Crown had also collaborated with seven different junket operators linked to organized crime, with insufficient due diligence conducted. Owner James Packer was found to have undue influence on the business, making decisions without board approval.
The inquiry concluded that Crown’s problems stemmed from poor corporate governance, deficient risk management structures, processes, and a negative corporate culture. However, Crown may still be allowed to operate the venue if it implements certain changes. These changes include conducting full audits of accounts and compliance, providing certification of appropriate AML/CTF education, and avoiding unlicensed junket operators. Packer must stop remote maneuvering, while Crown’s board requires restructuring.
Additionally, the inquiry made 19 recommendations for the New South Wales casino system. These include amending the Casino Control Act to prevent money laundering and prohibit casino operators from dealing with junket operators. The establishment of an independent specialist casino regulator called the Independent Casino Commission (ICC) was also recommended. Approval from the ICC will be necessary for any holder of a 10% stake in a casino, and each casino operator must have a qualified compliance auditor.
