Regulators have denied Crown Resorts, one of Australia’s biggest gaming groups, a licence to run a new multi-billion-dollar casino in Sydney due to suspected links to organised crime, the company said Tuesday.
Crown said it had been informed of the ruling by the Independent Liquor and Gaming Authority of New South Wales state, which includes Sydney.
The authority acted on the recommendations of a public inquiry, which last week reported Crown had been “facilitating” money-laundering through so-called “high roller” gambling junkets linked to Chinese triads and other organised criminal groups.
The move came despite the resignations of the Crown CEO and three long-time directors in response to the inquiry’s report.
Crown said in a statement that it would continue consultations with the Gaming Authority to address its concerns, though it was not immediately clear what steps would be sufficient to reverse the regulator’s decision.
The company and its largest shareholder, media scion James Packer, had been under the spotlight since media reports last year alleged that Crown casinos in Melbourne and Perth were used to launder profits from human trafficking, drugs, child sexual exploitation and terrorism.
During the inquiry headed by former Supreme Court judge Patricia Bergin, a lawyer for Crown said illicit funds were “probably” laundered through two high roller accounts operated by the casinos.
Bergin concluded that the company had “poor corporate governance, deficient risk management… and a poor corporate culture”, and said serious reforms were needed before Crown could operate the gleaming 75-storey tower that dominates Sydney’s waterfront.
The suggested reforms included an overhaul of the company leadership and put restrictions on any investor from holding more than a 10% share of the firm.
Packer currently holds around 35% of Crown through his CPH holding company.
Helen Coonan, a former government minister and Crown board member who was promoted to the position of executive chairman after CEO Ken Barton resigned on Monday, has accepted the inquiry findings as “warranted”.
In a statement after the report’s release, she said steps were being taken to improve the company’s governance, compliance and culture, but there was “much more to do”.
“We do not underestimate the scale of the problem and appreciate there is a need for ‘root and branch’ change,” said Coonan, who has been on the Crown board since 2012.