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SP: So of those three strands, the penalties, the suitability decision and the Plan B, which was the most challenging? AS: I think they all had their challenges, and obviously they were not entirely independent of each other. Among the many things that arose during the two years, one had the potential to be a showstopper for Crown: it was at risk of running out of money. In his 2021 report, Commissioner Finkelstein commented that of all the suitability criteria for a casino license holder, financial stability was perhaps the most important. 18 months later, and less than a year before our suitability decision was due, Crown gave evidence to the Federal Court of Australia during anti-money laundering proceedings brought by AUSTRAC our national money laundering enforcement agency. It claimed that a looming AUS$450 million fine could affect its solvency if immediate payment was required. Because this matter so obviously affected Crown’s suitability, we undertook an investigation so that we could then take that report into account in the evidence that we were looking at to make our suitability decision. Our investigation itself found Crown’s financial situation was stable in the context of the wider corporate group. But without the investigations, highly relevant questions about Crown’s suitability would not have been answered or been part of our suitability considerations. The Royal Commission’s findings signposted which matters would underpin our disciplinary actions. Our remit was to hold Crown accountable for its failures which, let’s not forget, were either serious misconduct or criminal conduct. They had made AUS$ tens of millions in profits from these activities, so any fine could not just neutralize the profit made. It had to be more than that, because it was serving both as a deterrent for Crown as the gambling leader in the state, and a general deterrent for all other gambling licensees. We also had to take into account as one of the considerations in fixing the size of the penalties that they should not be something that would financially cripple Crown. In the end, by mid 2023, we issued fines totaling AUS$250 million and ensured that there was clear air between imposing the fines and our assessment of the operator’s suitability. Perhaps the most difficult part of preparing for the suitability decision was determining the criteria by which we would assess whether Crown had reformed its operations and culture. Two years is a short time in which to achieve such major change in
be automatically canceled after the two-year reprieve, unless the VGCCC was clearly satisfied they were suitable to continue operating. So, we effectively had three strands of work: first we had to hold Crown accountable for its past misdemeanors, those classified by the Royal Commission as serious or criminal misconduct. The VGCCC determined that these disciplinary actions should be kept separate from the suitability decision itself. It was important to complete the disciplinary actions well ahead of the April 2024 suitability decision to avoid any confusion that one had any bearing on the other. After all, the disciplinary actions were as a result of Crown’s actions up to 2021; the suitability decision was based on whether the 2024 version of Crown was sufficiently better. Second was establishing the necessary foundations to enable us to make the decision as to Crown’s suitability and here the legislation gave the VGCCC a binary decision-making power. We could either say ‘yes’, Crown is suitable, or ‘no’, Crown is not suitable. As you have mentioned, the possibility that Crown would receive a ‘no’ decision had huge ramifications for the State of Victoria and this led to what became known as the Plan B project. We collaborated closely with the state’s Department of Justice to amend the Casino Control Act to give the VGCCC the power to appoint an independent manager to step in and take over the running of the casino at the end of the two years, if required. We then negotiated contractually binding agreements to enable the government and Crown to work together to achieve an orderly transition should Crown lose its casino license. The Melbourne casino forms part of a large entertainment complex that includes dozens of high-end retail shops, restaurants, bars, cinemas and conference facilities. These are not run or controlled by the casino itself, but by its parent company, Crown Resorts, as well as numerous independent business owners. The legally enforceable transition agreements were a critical component in preparing for the suitability decision, protecting Victoria’s economy and community from potentially dire consequences, primarily the loss of 1000s of jobs in the event that Crown had to shut down in a hurry. Lastly there was working out just what the suitability decision itself would be, and here we relied on the update reports of the Special Manager, Stephen O’Bryan, a very senior lawyer installed by the government and backed by a sizable support team.
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IMGL MAGAZINE | MARCH 2025
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