Crown Resorts Learns Fate in Western Australian as Crown Perth Inquiry Wraps Up

Posted on: March 24, 2022, 01:05h. 

Last updated on: March 24, 2022, 11:51h.

Erik Gibbs Read More
Expertise: Asia Pacific Gaming, Gaming Business, Global Gaming.

New South Wales was the first to go after Crown Resorts for its business practices. That’s before Victoria followed. Now, Western Australia has completed its inquiry into the casino operator’s past, and has issued its verdict.

Crown Resorts
Crown Resorts will soon enter a new phase of operations. Western Australia has released its decision following the completion of its inquiry into the casino operator. (Image: Bloomberg)

New South Wales (NSW) determined last year that Crown Resorts wasn’t worthy of a casino license in the state. Victoria used some of the information from that investigation, and conducted its own probe before putting Crown on probation for two years.

Western Australia (WA), where Crown operates the Crown Perth casino, was almost the final stop – the company is still under investigation by the Australian Transaction Reports and Analysis Centre (AUSTRAC). WA completed its inquiry months ago, but the findings weren’t presented to authorities until recently. As a result, Crown will have mixed emotions about their decision.

Crown Hangs On In WA

Crown is a company unworthy of holding a casino license in Australia. That is the collective conclusion in NSW, Victoria, and now, WA. However, like Victoria, the company has received a pass. It has two years to clean up its act or face additional consequences. These include the possible revocation of its license.

The Perth Royal Commission (PRC) concluded that the four Crown entities associated with Crown Perth – Burswood Nominees Ltd, Crown Resorts Limited, Burswood Limited and Burswood Resort (Management) Limited – are not capable of conducting gaming operations in a licensed casino. It also found that Burswood Nominees Ltd. is not suitable for a gaming license. The Burswood companies are Crown branches managing Crown Perth operations.

As a result, Crown management and Crown Perth management are now on borrowed time. The commission will give the company two years to shape up or ship out, with an independent monitor arriving to oversee Crown’s remediation.

In two years, the monitor, who has yet to be identified, will present its findings to WA’s gaming commission. Depending on what it reports, Crown may face further issues.

Two years is a long time. AUSTRAC, Australia’s financial watchdog, is still going after Crown, which could impact its future. It might also upset the possible acquisition of Crown that the Blackstone Group wants to make.

Crown’s current leadership, under Managing Director and CEO Steve McCann, accepts the company’s fate. It is willing to “work cooperatively and constructively” to make amends, adding that it has already made “significant progress” in addressing past failings.

Crown to Undergo Forced Transformation

Over the past two years, once its irregularities began making headlines, Crown has begun a major transformative process. As a result, almost none of the old guard is still in charge, and the new guard has asserted that it is busy trying to make amends for how the company previously operated.

More changes are coming. The Perth Royal Commission added 59 recommendations Crown needs to consider. In this case, a recommendation should be seen as more than merely a suggestion.

The Burswood Ltd board needs to add more individuals to its current complement of four. It should include mostly non-executive directors and at least two not connected to Crown in any way.

Crown needs to implement a “binding” commitment to establish new gambling procedures on the casino floor, particularly for electronic gaming machines (EGM). Gamblers should create weekly loss and time limits at the beginning of the week, which Crown Perth would manage.

There should also be a $10 (US$7.47) on all EGMs located on the main gaming floor, with casino guests taking 15-minute breaks after three hours at a machine. The commission would also like to see gamblers spend no more than 28 hours a week playing EGMs.

Gaming and Wagering Commission In Trouble, As Well

Crown wasn’t alone in being a target for commissioners’ wrath. The inquiry determined that WA’s gaming regulator, the Gaming and Wagering Commission (GWC), was deficient on all levels as well.

The GWC is “not fit for purpose,” WA states. The commission “was flawed from conception,” and has had “numerous deficiencies” in relation to how it “exercised its power and responsibilities.”

As such, the PRC suggests the dissolution of the GWC in favor of a new “modern” regulator. Victoria created a new regulator because of the Crown fiasco, and NSW will likely do the same.