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AS: The Royal Commission was led by an eminent retired Federal Court judge, the Honorable Ray Finkelstein. He described Crown’s conduct as a disgrace, elaborating that this was shorthand for illegal, dishonest, unethical and exploitative. Based on that description, it was no surprise that the Royal Commission found Crown Melbourne unfit to hold a casino license. But instead of recommending that the license be canceled, the Commission recommended that Crown be given an opportunity to reform itself. Part of the consideration was no doubt the substantial harm that canceling the license would have caused to the Victorian economy and to innocent third parties. It also took into account that Crown had already begun a significant reform program. In late 2021, the government accepted the recommendation and, under the supervision of a special manager, gave Crown two years to undertake a program of reform and remediation to overhaul its operations and demonstrate a genuine commitment to and progress towards becoming a casino that would meet the highest standards of integrity. At the end of the following two years the newly established VGCCC would be responsible for deciding Crown’s fate. SP: You mentioned the impact that canceling the Crown license would have on the local economy. As I understand it, Crown was Victoria’s largest local employer and contributed hundreds of millions of dollars a year to the state in taxes. Did the sense that Crown was too big to fail put pressure on you as regulator? AS: No. In fact, the opposite was true. We set up a decision- making process which enabled us to completely turn our attention away from the possible consequences. Our decision would be based purely on the evidence. Possible consequences could have absolutely zero impact on whether they were suitable or not. It’s not as if this was a decision that would say there’s not going to be a casino in Melbourne. There would be someone else, just not that operator. Having said that, I don’t want to give the impression that we ignored the possibility that Crown would fail. In fact, there was an implicit assumption within the new legislation that it would. The 2021 legislation set out that Crown’s casino license would
Commission was called. He was a very powerful personality, he had an influence over the management team, he was able to get private shareholder briefings on financial performance that was not available to the market and he was certainly prioritizing profit over compliance and everything else. What came out very clearly in the Bergin inquiry 1 was that senior people, including board members, were looking to do what Packer wanted done, rather than what was necessary for normal business compliance. Bergin actually put it quite colorfully: “… the real power was exercised by Mr Packer both by reason of his personality and also the somewhat supine attitude adopted by Crown’s operatives.” There was a very telling email produced in the Bergin inquiry from Andrew Demetriou, the former chief executive of the Australian Football League who was chair of Crown Melbourne at the time and a significant director of Crown Resorts. In his email to Packer, he said: “I remain committed to serving the best interests of Crown and, most importantly, you.” That’s not the kind of behavior any director would ever learn in governance 101. SP: So actually, we could call this a toxic demand from Packer. “I’m not interested how you do it, but you have to increase profits no matter what.” AS: I think it did come to the point where I imagine there were Crown executives who were afraid to come up with bad financial news for fear of Packer’s response. It’s very important to realize just how much direct input the Bergin inquiry found Packer had. SP: Thinking about the culture that pervaded Crown, the company culture had reached such a questionable level do you think it would ever have been possible to continue without replacing various individuals? AS: I think initially Patricia Bergin thought some key individuals might be able to remain. But subsequent events proved otherwise, so I think the observation you make is probably correct. It’s incredibly hard to change the tone at the
top with the people who set that tone still in place. SP: What did the Royal Commission conclude?
1 The 2021 Report of the Inquiry under section 143 of the Casino Control Act 1992 (NSW) (aka the Bergin Inquiry Report) is a comprehensive investigation conducted by former Supreme Court Judge, Patricia Bergin SC, into Crown Resorts Limited, the parent company of Crown Sydney Gaming Pty Ltd (Crown Casino). https://www.parliament.nsw.gov.au/la/papers/Pages/tabled-paper-details.aspx?pk=79129
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IMGL MAGAZINE | MARCH 2025
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