Crown Resorts to face WA casino inquiry as pressure grows on more directors to resign

Inquiry called after state’s head casino regulator stood aside following reports he went fishing with Crown employees

The West Australian government has announced an inquiry, with the powers of a royal commission, into embattled casino operator Crown Resorts amid increasing pressure on two additional directors of the company to resign.

WA’s move, announced late on Tuesday, leaves Victoria isolated as the only state that licenses Crown that has failed to launch a quasi-judicial inquiry into the James Packer-backed casino operator.

An inquiry in New South Wales, conducted by former judge Patricia Bergin, found that Crown was not fit to hold the licence to a new casino in Sydney. The company facilitated money laundering in its existing Melbourne and Sydney casinos and junket operators who brought in high-rolling gamblers were linked to organised crime, she said in the report, tabled in NSW parliament last week.

WA’s inquiry, which will investigate whether Crown is fit to hold its licence to run the Burswood casino in Perth, was called after the head casino regulator at its gaming authority stood aside following reports he went fishing with Crown Resorts employees.

The Gaming and Wagering Commission said the inquiry into Crown Perth would also examine “the suitability of close associates”, “the appropriateness of Crown Perth’s responses to the GWC prior to and during the Bergin inquiry”, and its own effectiveness “in the discharge of its regulatory responsibilities inclusive of any perceived conflicts of interest”.

It said its chief casino officer, Michael Connolly, “made a formal declaration of an interest due to his personal associations with staff at Crown Perth” in October.

In November, the GWC also commissioned accounting firm Ernst & Young to audit the authority’s oversight of Crown Perth.

“In consideration that there should be no perception of a conflict of interest, Mr Connolly volunteered to step aside from his role as chief casino officer effective immediately,” the GWC said.

On Tuesday night Philip Crawford, the chair of the NSW authority, the Independent Liquor and Gaming Authority, said that Crown director Harold Mitchell needed to follow the example set by other directors and resign. John Poynton, who until last week was a consultant to Packer’s private company Consolidated Press Holdings, should “possibly” also resign, Crawford told ABC radio.

Mitchell is also under pressure to resign from the Crown board from the Victorian Commission for Gambling and Liquor Regulation, which wrote to him after a judge last year found he breached his duties while a director of Tennis Australia.

“I think he should go,” Crawford said. “I think Mr Mitchell needs to reconsider his position very carefully.”

Last week, Guy Jalland and Michael Johnston, who served on the Crown board as CPH nominees, resigned.

CPH also ended a consultancy deal with Poynton, a move CPH said it hoped would enable him to qualify as an independent director.

However, Crawford said this might not be enough.

“I thought it was a good step that his [Packer’s] board nominees have gone. Mr Poynton is still there and that’s something we’re going to look at going forward,” he said.

Crawford said ILGA would meet with CPH “in the next few days” to discuss what to do about the company’s 36% shareholding in Crown in light of criticism of Packer’s influence over the casino company contained in Bergin’s report.

The chief executive Ken Barton and non-executive director Andrew Demetriou also resigned after being criticised by Bergin.

Corporate governance experts have urged the entire board to resign, but Crawford has previously said he has confidence chair Helen Coonan is sincere in wanting to overhaul the company to make it suitable to hold the Sydney licence.

“We’ve had a very combative and adversarial company right through the period of inquiry, and we need to change that,” he said.

“I mean as regulator we want to work with, in effect, our customers, those we are regulating, and we don’t need it to be adversarial and barristers that file papers all the time.”

Victoria, where Crown’s biggest casino is located, has yet to announce a full-scale inquiry into the company.

Instead, it has moved forward to this year a regular review of the casino licence that is usually conducted by the Victorian Commission for Gambling and Liquor Regulation (VCGLR) every five years.

Melissa Horne, who as consumer affairs minister is responsible for regulating the casino, has not issued a press release on the topic since 17 December, when she announced the review would be brought forward to take place this year.

At the time she said a sessional VCGLR commissioner would be appointed to conduct the inquiry “soon”, but no such appointment has yet been announced.

However, the premier, Daniel Andrews, has said casino regulation may need to be stripped from the VCGLR and handed to a new body.

Horne said the Victorian government was “currently getting advice on the most appropriate response regarding Crown and will have more to say soon”.

Contributor

Ben Butler

The GuardianTramp

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