The last year has been a devastating one for Crown Resorts and it seems the spectre of misfortune is not done with the multinational operation yet. The latest round of bad news to hit Crown relates directly to its political and business associates.
From the top
It is important to understand exactly where the cascade of Crown’s troubles began to fully comprehend the state that it finds itself in now. In 2020, damaging reports began surfacing in the media that alleged unethical and outright criminal behaviour by Crown. A full spectrum of transgressions was unveiled, including bribery and money laundering.
The advent of these revelations could not have been more poorly timed as far as Crown was concerned. The company was at the time readying itself to open a new property in Sydney. This process was unceremoniously halted as a string of politicians called for investigations into the operation.
New South Wales took the lead and hosted a series of hearings where regulators were tasked with deciding whether Crown was suitable to possess a gambling license within the state. The Bergin Report concluded that this was not the case and the license was denied.
The December opening of the new Crown casino has been indefinitely postponed following this action, resulting in a flurry of internal turmoil. The company’s CEO, five board members, as well as the company’s secretary and general counsel all resigned. The individuals that stepped in to replace them are now working with state regulators to resolve compliance issues.
Fresh scrutiny
More trouble soon followed for the embattled operator and Crown now has to deal with new investigations initiated by regulators in Western Australia and Victoria. The least favourable outcome for the company would be having its license revoked in both states which would effectively put it out of business.
An end to political donations
Crown is, at this moment, barred from making any political contributions. This ends almost a decade of Crown being one of the most generous donors to Australian political parties and candidates.
In a recent statement, Crown validated the news, announcing the same via the Australian Securities Exchange. Andrew Wilkie, an anti-gambling advocate, and independent MP was thrilled at this development.
“Frankly, no political party should accept donations from any gambling company, and the pressure is now on the parties to follow Crown’s lead and promise to end their reliance on the industry, ” Wilkie said.
Murky ethics
Several law firms are pitching up to aid Victoria’s royal commission in its investigation into Crown Resorts, with a sizeable pay package attached to their services, but a conflict of interest may have arisen.
One of the law firms putting themselves forward for the task is Corrs Chambers Westgarth. The firm was previously employed by Crown to advise on some aspects of their intent to build a casino in NSW.
The Blackstone Group is one of Corrs’ major clients and also owns 10% of Crown Resorts, which means that it is the company’s second-largest shareholder.
Charles Livingstone, a gambling regulation expert, advised that it would be a “terrible look” if the Victorian government chose Corrs to assist them. He further stated that Blackstone is in the ideal position to acquire more Crown stock if the owner, James Packer, decides to sell.
On the other hand, Peter Cohen, a former director of the Victorian Commission for Gambling and Liquor Regulation, believes that it is near impossible to hire a law firm with the capacity to conduct a royal commission without any potential conflict with its clientele arising.
