The Crown name, whilst hugely popular for its luxurious and 5-star integrated resorts, has been tainted with a series of high profile cases and legal issues in recent years. Since the publicized arrest of its 18 staff members in 2016, its reputation has been struggling to improve from the unfortunate exposure. Evidence of accounts broadly tied to organized crime has also heavily contributed to its overall negative impact, costing the company to drop over $500 million in value just this year.
In spite of the modest opening of its $2.2 billion mega casino in Sydney last December, Crown was essentially forced by the NSW Independent Liquor and Gaming Authority (ILGA) to delay the opening of its gaming segment while the official inquiry was still in process. The national regulatory inquiry was launched in August 2019 in response to the reported illegal gambling operations and concluded this February 1st. Given the outcome, neighboring state regulators are seemingly looking at its Perth and Melbourne casino activities, possibly bringing more problematic issues to light in the near future.
Official verdict of Bergin Inquiry
Led by former Supreme Court judge Patricia Bergin, the verdict was released last Tuesday in a 750-page report deeming Crown Resorts unsuitable to hold a NSW license and detailing Bergin’s recommendations moving forward. The results were of no surprise as indications of Crown Resorts ineligibility were priorly raised four months ago. Evidence mainly pointed to the negative influence brought about by major shareholder James Packer, Crown’s money laundering activities and the company’s mismanagement all throughout.
In the statement, Bergin noted, “Any applicant for a casino license 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 organized crime groups would not be confident of a positive outcome. It is obvious that such attributes would render an applicant quite unsuitable to hold a casino license in New South Wales.”
Bergin validated her conclusion with a variety of reasons detailing Crown’s “poor corporate governance, deficient risk management structures and processes and a poor corporate culture”.
Judging by the findings gathered in the 18-month probe, Bergin urged Crown to reconsider Packer’s involvement and recommended a 10% ownership cap which requires further permission in order to be lifted. In addition, a management overhaul was also recommended with its current CEO and key directors called to step down amidst the controversies and multiple legal troubles. With evidence linking Crown’s accounts to dubious activity, Bergin moreover required a “full and wide-ranging forensic audit of all of their accounts to ensure that the criminal elements that infiltrated [two bank accounts linked to Crown] have not infiltrated any other accounts” in completion of the company’s reformation and possibility of obtaining a future license.
While Bergin finalized the inquiry with an unsuitable outcome, her reports and recommendations are technically not enforceable. The NSW gaming authority will still meet to discuss the findings and decide which ones are up for enforcement later this month. Although there might be a ton of work and a dozen changes to be made, Bergin did shed some light for Crown’s future operations, dependent on the company’s dedication and willingness to abide by state regulations.
“If Crown is to survive this turmoil and convert itself into a company that can be regarded as a suitable person… there is little doubt that it could achieve a fresh start and emerge a very much stronger and better organization”, Bergin stated in the report.
Thai triad boss arrested for laundering drug profits in Crown Melbourne
The arrest of Thai national Chung Chak “John” Lee last December was a result of Australian authorities’ crackdown on organized crime. Lee, who is allegedly tied with The Company, a big-time drug syndicate reportedly responsible for up to 70% of the methamphetamine available in Australia, is dubbed to have laundered drug funds valued at millions of dollars in the Crown establishment. Lee is speculated to have partnered with the gaming giant to direct a VIP gaming tour business to conduct its money laundering operations in 2012. While the Thai triad boss has been arrested in Thailand, authorities are working to have him extradited to Australia but is yet to come to fruition given Lee’s strong ties with high ranking politicians in his home country.
The undeniable ease for exploitation due to Crown’s lax policies sparked the launch of the Bergin Inquiry which has now deemed the gaming and entertainment group unsuitable to hold a state license. Initially reported in 2019 by The Age, Sydney Morning Herald and Sixty Minutes, Crown’s illegal operations and suspicious ties were eventually revealed following a thorough investigation. Crown at that time, was focused on clearing the air, marketing the company to have had “no dealings or knowledge of any organisation of that name or description”, which has now been discredited by the inquiry as mistaken.
Lee has been on the Australian Federal Police’ radar for over 40 years prior to the arrest, having earned billions of dollars in revenue for his suspected three-decades worth of international drug trafficking activities. The Company has been linked to a distribution network in the country dating back to 2009, with the AFP having successfully intercepted a drug shipment coming from Bangkok carrying 1.6 tonnes of methamphetamine and 37 kilograms of heroin worth an estimated $1.2 billion just last December 2019. In a statement made by AFP deputy commissioner Karl Kent last year, he narrated The Company as “being a huge threat to Australia… not only in terms of illicit drugs but in terms of people smuggling, in terms of firearms.”
While an arrest has been made, Lee’s story is only one form of Crown’s dubious activities with many more slowly being unmasked to the public eye. A strong start on taking charge, the Australian government is keen on cutting down the huge threat it is currently facing with its largest gaming venture, Crown Resorts ultimately forced to improve on if not rectify its past wrongdoings.