Crown Resorts has urged Victoria’s Royal Commission into its suitability to retain a casino license for Crown Melbourne to refrain from handing casino operations to a new bidder, calling instead for an independent monitor to oversee its return to suitability.
Two weeks after Counsel Assisting the Royal Commission asked for a finding of unsuitability, Crown presented its own closing submissions on Tuesday with lawyer Michael Borsky SC presenting two alternative proposals.
Unsurprisingly, Crown’s first preference is a finding that it remains suitable to hold a casino license, with an independent monitor or supervisor appointed to supervise implementation of the company’s reform agenda.
Crown’s second proposal is a finding of unsuitability but with the potential to return to being suitable upon implementation of its reforms. Again, “This would be safeguarded by the appointment of an independent monitor or supervisor with all the functions and powers necessary to scrutinize and supervise Crown along the way towards implementation of all of the reforms,” Borsky said.
Crown’s proposals were quickly challenged by Royal Commissioner Ray Finkelstein, who put to Borsky that both were “risk free options … where there is no real consequence of wrongdoing. You pay unpaid taxes, pay some cost but don’t actually suffer any consequence. That is, you can commit wrongs of various kinds for a decade then come along and say, ‘Well we’ve fixed it, don’t worry about it’. That’s really not how the system works and it’s not what the public expects.”
After Borsky suggested that the Royal Commission’s role was not punitive but to instead choose the best course of action moving forward, Finkelstein replied, “That’s a fair enough way of putting it but the choice might be between you running the casino and someone else running the casino.”
Of particular concern to Crown may be comments made by Finkelstein suggesting he has already looked into how Crown Melbourne’s assets might be broken up should casino operations be handed to another company.
Although he conceded he not yet confirmed exactly which assets are located on state-owned land, Finkelstein said it may be that both the casino and the main Crown Towers hotel could be forcibly sub-leased while other hotel assets remain under Crown’s control.
Borsky argued such a scenario would be against the public interest and that the commission should “not assume that gaming and non-gaming operations can efficiently or even practically be separated.
“The result, in our submission, of a disintegration of the integrated resort would be an inferior offering for customers, employees and stakeholders and a substantially diminished offering for the state of Victoria,” he said.
“We submit that the more practical, effective and efficient course is for Crown Melbourne to continue to operate as an integrated resort under license and upon whatever conditions this commission may consider appropriate to recommend, including at a minimum that Crown be under the supervision of an independent monitor or supervisor as it works to continue its program of reforms.”
While Borsky said Crown had exhibited its commitment to reform, he admitted it would be impossible for the Royal Commission to overlook the sins of the past with a finding of unsuitability now a very real possibility.
“While we submit that there is a proper evidentiary and legal basis upon which the commission could find Crown suitable, Crown does appreciate the significance of its failings and accepts that it is open for this commission to conclude on the evidence that Crown is not presently a suitable person to hold the casino license,” he said.
“Crown’s current leadership recognizes that when viewed in aggregate and holistically, the failings in Crown that have been revealed and which Crown accepts are significant do render Crown’s suitability fairly in question.”
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