Victoria’s opposition will attempt to establish a fresh inquiry into the state’s embattled gaming regulator after new allegations it failed to properly police criminal conduct at Crown casino.
When Parliament returns next month, the opposition will call on the crossbench to support a parliamentary probe into regulatory issues left out of the terms of reference for the state’s royal commission into the casino’s fitness to operate.
The royal commission is examining Crown’s Melbourne casino licence. Credit:Chris Hopkins
The opposition’s push comes after ABC’s Four Corners aired new allegations on Monday night revealing five casino inspectors were allegedly stonewalled by the regulator and the casino, undermining their work.
Inspectors told the ABC when the then-Liberal state government merged gaming and liquor authorities in 2012, citing increased efficiency, it created chaos. They said experienced gaming inspectors were routinely called away from the gaming floor to conduct liquor licence checks at cafes, bars and restaurants.
Former Victorian gaming inspector Rod Walker told the ABC: “It was a takeover by liquor, clearly. There seemed to be a directive from above, whether that was at state government level, to focus in on liquor activities.”
Crown boss Steve McCann arrives to give evidence to the Victorian royal commission on Tuesday. Credit:Eamon Gallagher
On Tuesday, the Royal Commission into the Casino Operator and Licence heard that Crown’s new CEO, Steve McCann, first heard about its underpayment of Victorian tax – a result of Crown illegally deducting the cost free drinks and hotel rooms for patrons from its poker machine revenue – in a newspaper report on June 7 after it was raised at the commission. In earlier evidence the amount of tax owed was estimated to be as high as $272 million.
Mr McCann left property giant Lendlease to join Crown on June 1 and became emotional while giving evidence to the royal commission about how he proposed to fix Crown’s corporate culture after revelations of company wrongdoing and infiltration by organised crime.
Staff wanted to “restore the pride in the organisations that they used to feel” working at Crown but could not because “their family and friends are struggling with what’s going on”, he said.
Mr McCann told Crown staff not to follow his or anybody else’s directions if they were “asking them to do something… that’s inconsistent with their values”, he said, before the commission took a short break for him to compose himself.
Under further questioning from commissioner Ray Finkelstein, QC, Mr McCann said Crown’s desire to make money should not stop it from doing the right thing – such as preventing money laundering – because malpractice would eventually cost the casino its right to operate.
“Maybe the only surprising thing [is] it’s taken this long for Crown to work that out,” he said.
Crown has enjoyed the support of both Liberal and Labor governments since former Labor premier Joan Kirner approved a Melbourne casino, and Liberal premier Jeff Kennett announced in 1993 Crown would be the operator.
The latest allegations have put pressure on the Andrews government to extend the royal commission – due to conclude public hearings on Friday and report by October 15 – and broaden the terms of the probe to examine the Victorian Gambling Regulator.
Commissioner Ray Finkelstein, QC.Credit:
The Andrews government has resisted calls to ask Mr Finkelstein to investigate the effectiveness of the regulator because it had already announced its own regulatory review to run alongside the royal commission.
Next month, the Coalition will attempt to take advantage of Labor’s minority status in the upper house to establish a parliamentary inquiry into the gaming regulator to focus on two key regulatory recommendations from the damning NSW Bergin inquiry, which ruled Crown unfit to hold a licence for its new $2.2 billion Sydney casino.
As part of that review, commissioner Patricia Bergin recommended regulation of casinos be undertaken by an Independent Casino Commission (ICC), to operate as an independent oversight body, with powers of a standing royal commission.
The Coalition wants a seven-member committee to further investigate Ms Bergin’s findings into Crown’s Sydney casino and look into gaming regulation in Victoria more broadly.
It would run alongside the Victorian royal commission, which is assessing the suitability of Crown Resorts to operate the Melbourne casino and whether Crown has specifically complied with Victorian law.
The committee would be chaired by a non-government MP but would include MPs from across the political divide.
Opposition gaming spokeswoman Steph Ryan accused Premier Daniel Andrews of “burying the truth” about the government’s failure to regulate the casino.
“We will seek the support of Parliament to examine why the regulator blocked gaming inspectors from following up on concerns about money laundering, drug dealing and organised crime at the casino,” Ms Ryan said.
A vote in support of the probe would heap parliamentary pressure on the Victorian Premier, who on Tuesday acknowledged the regulator was “broken”.
Premier Daniel Andrews says Crown faces a very real risk of losing its licence. Credit:Nine
Mr Andrews said he was concerned by the latest allegations from the former regulators, saying he was aware of “significant deficiencies” in the way the regulator operated.
He said the government was “rebuilding” the regulator after state cabinet agreed to set up a standalone regulator to manage the licence of Crown in February.
“We have acknowledged the regulator is broken, and we are going to fix that,” he said.
“The prospect of Crown losing its licence is very, very real.”
Mr Andrews said he believed the current terms of reference were “adequate” and that Mr Finkelstein was “free to ask for expansions, amendments, more time (and more money)” if he believed it was necessary.
“There have been some requests for additional time, and we have granted those. No such requests have come forward in other areas,” the Premier said.
He said the royal commission had already exposed some “appalling conduct” and he would not hesitate withdrawing Crown’s licence if recommended by the royal commission.
“The prospect of Crown losing its licence is very, very real,” Mr Andrews said.
It remains unclear whether the Coalition will garner the support of nine crossbench MPs for a parliamentary inquiry, but Greens leader Samantha Ratnam said she would support any motion that results in the improved regulation of Crown and the pokies industry.
“We’re glad to see the Libs seem to have changed their mind. I moved a similar motion for an investigation into the VCGLR in 2017 that was voted down by Labor and the Liberals, who both played their part in running a protection racket for Crown,” Ms Ratnam said.
“The Greens will also be moving in the Parliament to expand the royal commission’s terms of reference so that the regulator and the government’s involvement are investigated.”
Reason Party MP Fiona Patten in 2019 called for an urgent inquiry into Crown’s casino licence.
Several sources who intimately understand the government’s relationship with Crown, but were not authorised to speak publicly, have called on the royal commission to not only investigate the regulator, but probe the gaming giant’s dealings with the government.
That relationship in the past goes to the heart of the issues, the sources have said, and the failure of successive governments to rein in Crown and the regulator.
An Auditor-General’s investigation in 2017 found the regulator failed to properly scrutinise money laundering by high-rollers at Crown.
The report said the regulator had been troubled by a lack of leadership, training of staff and a reduction in funding under the previous Liberal government, and that its audit program of money laundering risks of high-rollers at the casino had only been conducted three times since 2012 because of a lack of sufficiently trained staff.
Officials also failed to conduct a review of Crown’s internal audits, despite aiming to do so quarterly, since August 2012, that investigation found.
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