(Bloomberg) -- Crown Resorts Ltd. will be placed under strict government supervision for the next two years after being found unfit to hold its Melbourne casino license following an inquiry that uncovered a litany of wrongdoing.
The so-called Special Manager will have the power to veto board decisions and be given unfettered access to all areas of the casino and its books and records, the Victorian state government said Tuesday in response to the findings of the Royal Commission headed by former judge Ray Finkelstein.
“Within a very short time, the Commission discovered that for many years Crown Melbourne had engaged in conduct that is, in a word, disgraceful,” the inquiry said in its report. “This is a convenient shorthand for describing conduct that was variously illegal, dishonest, unethical and exploitative.” Finkelstein’s months-long investigation into Crown Melbourne revealed the company had underpaid casino taxes by treating certain jackpot promotion costs as tax deductible -- even though they weren’t -- and didn’t tell the regulator. Crown also between 2012 and 2016 illegally let guests at its hotel in Melbourne use credit cards to access funds on the casino floor.
Crown could still lose it license at the end of the two-year period unless it satisfies the government that it has been reformed.
“This will be a tough test to satisfy,” Finkelstein said.
Finkelstein said “perhaps the most damning discovery” by his inquiry was the way Crown dealt with the many vulnerable people who have a gambling problem.
“Crown Melbourne had for years held itself out as having a world’s best approach to problem gambling,” he wrote in the report. “Nothing can be further from the truth.”
The Victorian government said in a statement it accepts all the findings in the report.
The verdict is key because the flagship Melbourne site generates most of Crown’s revenue. Its future is also central to suitors including Blackstone Group Inc. and Star Entertainment Group Ltd. that have circled Crown in recent months.
©2021 Bloomberg L.P.