Crown Asked to Delay Gaming Operations at New Sydney Casino
(Bloomberg) -- Crown Resorts Ltd. has delayed next month’s planned start of gaming operations at its new $1.5 billion Sydney casino while a money-laundering inquiry continues.
The New South Wales Independent Liquor and Gaming Authority earlier Wednesday said there were ongoing concerns about Crown’s suitability to run the casino and that evidence heard by the probe was “extremely concerning.”
The months-long inquiry has exposed broad dysfunction and governance failings at the the company, that for years has been synonymous with its largest shareholder, billionaire James Packer. The firm has scrambled to renew the board and tighten anti-money laundering controls in a bid to win back trust. At stake is Crown’s license to operate the Sydney gaming resort, and Patricia Bergin, the retired judge heading the inquiry, is due to issue her report in February.
The authority said that any gaming activity at the casino before Bergin revealed her findings would “pose unacceptable risks on the community against the public interest.”
Crown shares went into a trading halt Wednesday before the announcement. The stock has fallen 20% this year.
The company will continue to focus on opening the non-gaming operations, such as bars and restaurants, at the complex, it said in a statement Wednesday.
The casino and hotel, whose landmark waterfront tower soars high above Sydney’s harbor, aims to draw wealthy gamblers from China and other Asian nations to its members-only tables. That strategy suffered a blow in 2016, when Chinese authorities rounded up Crown staff on the mainland and a court later convicted 19 current and former employees of illegally promoting gambling.
In mid-2019, a string of media reports alleged that criminal gangs laundered cash at Crown’s casinos, and that the company used Asian junket operators with links to drug traffickers. Those reports triggered the inquiry in Sydney that has laid bare Crown’s shortcomings.
Philip Crawford, who chairs the gaming authority, said it couldn’t consider a range of matters such as minimum bet limits and VIP membership policy while the inquiry is ongoing.
“We are hopeful that Crown Resorts will agree to our request to postpone opening of all gaming activities,” he said, adding it was disappointing the company had not taken it upon itself to delay the opening.
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