James Packer’s Crown Resorts has agreed to bring in cashless gambling, stop bringing in international high-rollers and get rid of indoor smoking at its casinos as part of a deal with the NSW regulator that moves it closer to being allowed to open its vast new gaming floor at Barangaroo in Sydney.
Philip Crawford, the chairman of New South Wales regulator the Independent Liquor and Gaming Authority, said Crown had made progress in addressing the reasons why an inquiry in February found it was not fit to hold a casino licence.
ILGA has also struck a deal with Packer’s private investment group, Consolidated Press Holdings, which owns 37% of Crown, “to address issues around its influence and control over the management of Crown”, Crawford said.
However, he said ILGA would not make a final decision on whether to grant the licence until after an independent monitor reports back on whether Crown has made structural changes needed to make it suitable.
The inquiry, run by former judge Patricia Bergin, found that Crown facilitated money laundering and that junket operators who brought high-rollers to its existing Melbourne and Perth casinos were linked to organised crime.
Crown has already suspended the high-roller program and international travel is at extremely low levels due to federal government restrictions imposed to limit the spread of Covid-19.
The casino group has also agreed to pay part of the cost of the Bergin inquiry and immediately start paying a supervisory levy, ILGA said.
Smoking is allowed inside Crown’s high-roller Mahogany Room gaming rooms at the Melbourne casino and under its Barangaroo licence is also allowed across 20,000 sqm – equivalent to about two and a half rugby league fields – of gaming room floor.
In 2013, when the licence was granted, Crown said indoor smoking was “absolutely critical” to allow it to compete with international rivals.
Sydney’s existing casino, The Star, which has made a bid to take over Crown, has also agreed to stop all international junket operations and work towards cashless gambling.
American funds manager Blackstone has also bid for Crown while another fund, Oaktree, which specialises in lending to under-pressure companies, has offered to help fund a buyout of Packer’s shares.
“Any changes to Crown’s ownership structure, including takeover or merger proposals, require the authority to consider a range of issues including undertaking full probity assessments of any new entrants, how a merged entity would operate, and the extent to which any existing agreements with Crown would need to be reviewed,” Crawford said.
The deal between ILGA and Crown came amid hearings in a West Australian royal commission into the casino group and as a similar inquiry in Victoria prepared to hear evidence, beginning on Monday.
In evidence to the WA royal commission on Wednesday, the state’s former chief casino officer defended his ties to Crown.
Michael Connolly, who stood aside from his role in February amid scrutiny of the friendships, told the commission he was never knowingly influenced by his friendships with two Crown employees despite sharing regular fishing trips and selling a boat to one of the men.
Connolly confirmed he had gone on weekend fishing trips dating back to 2013 with Crown Perth’s general manager of legal and compliance, Claude Marais.
He revealed he had sold a boat he had renovated to Marais for $13,000, with the transaction bringing him a $116 profit.
Connolly told his then-boss, GWC chair Barry Sargeant, about the transaction “out of an abundance of caution”.
He also had a close friendship with Paul Hulme, another member of Crown’s legal and compliance team.
But Connolly said he did not believe either friendship had influenced his work, despite seeing the pair at monthly meetings where regulatory matters were discussed.
“I have never knowingly been influenced, and I’m still not aware of any influence that has been exerted on me,” he told the inquiry.
On Monday, the Victorian royal commission is to hear evidence about the response of the state’s regulator to the arrest of 19 Crown staff in China in 2016 on charges of illegally promoting gambling.
Hearings next week will also deal with Crown’s junket operations.