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Packer’s Legal Team Looks to Distance him from Crown Failings
Crown Resorts’ numerous failings, as outlined by a New South Wales government inquiry, are not all James Packer’s fault.
Crown Resorts no longer suitable to hold Sydney casino licence, inquiry hears. And that James Packer will likely need to divest his shares, in order to hang on to the Sydney licence. James Packer risks losing his licence to operate the Crown Sydney casino at Barangaroo on the harbourfront. The resort is due to open in December but an inquiry into Crown's suitability to operate.
- SYDNEY, Oct 8 — Australian casino magnate James Packer said today he may have to cut his stake in his company for it to keep its licence and declared he would never rejoin its board after the “terribly shocking experience” of being accused of dealing with criminals.
- Adam Bell SC reached the conclusion after considering the deleterious impact on the good governance of Crown Resorts caused by its dominant shareholder James Packer’s Consolidated Press Holdings and, ultimately, Packer. He reminded the inquiry that protection of the public interest was a key objective of the NSW Casino Control Act.
That’s the assertion made by lawyers for Consolidated Press Holdings, the private investment company of James Packer.
The Australian Financial Review reports that CPH’s legal team, headed by Noel Hutley, SC, told inquiry Commissioner Patricia Bergin that she should reject the submission its clients had a “deleterious impact” on the company’s good governance.
“We respond to counsel assisting’s an approach whereby they seek to attribute at least some of the blame of the failings of Crown Resorts to Mr Packer and CPH,” Mr Hutley said.
“This is an unwarranted and unfair characterisation of Mr Packer’s role, which is simply not supported by the evidence before the inquiry.”
The inquiry has heard submissions that the gaming giant was “recklessly indifferent” to money laundering risks and never had robust enough processes to review the integrity of junket partners.
They have put Mr Packer at the centre of these concerns, particularly the push to bring offshore high-rollers to Crown’s Australian casinos through junkets or other means, which also led to the arrest of Crown staff in China in 2016.
Mr Packer said many of the failures outlined before the probe were a total shock to him when giving evidence last month, and Mr Hutley claimed this should be believed as the billionaire was honest and candid in the dock.
The government’s probe will release its report by February 2021 whether Crown and its close associates are suitable to hold a gaming licence for the near-complete Barangaroo casino in Sydney.
It has already raised the prospect of investment or voting right caps on Mr Packer’s 34 per cent shareholding in Crown.
Counsel assisting have said the casino giant is unsuitable for the Barangaroo licence due to several cultural, governance and risk management failures over the last decade.
These closing submissions come as Crown faces increasing pressure to delay the planned opening of the casino in December and ILGA plans an urgent meeting next week to resolve the issue.
Mr Hutley’s argument appeared to run into an early obstacle when Commissioner Bergin interrupted.
“Mr Packer did say that he accepted some responsibility for the corporate governance failings of Crown,” the Commissioner pointed out.
Mr Hutley accepted this was the case for when Mr Packer was executive chairman of the company until March 2018, yet said he was dealing with the billionaire’s influence from November that year onwards.
By such time, Mr Packer had also left the operational side of CPH and was still receiving confidential Crown information through a controlling shareholder protocol kept secret from other investors.
Via the protocol, Mr Packer sent demanding emails to various Crown executives seeking information and updates on certain matters.
Still, Mr Hutley said those presented before Commissioner Bergin were too small a sample to conclude the billionaire had a profound sway over the company.
Crown has now terminated the controlling shareholder protocol.
Mr Hutley said the period after November 2018, was the only one relevant to Mr Packer’s current suitability to be a close associate of Crown’s licence for its Barangaroo casino in Sydney.
Inquiry Deems Crown not Suitable to Hold Sydney Casino Licence
Crown Resorts has been deemed not suitable to hold the licence for its soon-to-be-opened casino in inner Sydney.
James Packer Crown Casino Sydney Opera House
The ABC reported in early November that the Independent Liquor and Gaming Authority has been examining the conduct of Crown in its current casinos in Melbourne and Perth, including its international VIP gaming operations.
In his closing submissions, counsel assisting Adam Bell SC told the inquiry he believed Crown was not suitable to hold the licence for the new Barangaroo premises.
“In summary, we submit that the evidence presented to this inquiry demonstrates that the licensee is not a suitable person to continue to give effect to the licence and that Crown Resorts is not a suitable person to be a close associate of the licensee,” he said.
The inquiry has raised serious allegations that the company ignored warning signs of money laundering within its casinos, partnered with junket operators despite their links to organised crime and ignored the safety of their staff in China, who were technically working illegally.
Mr Bell highlighted the arrest of the employees in China four years ago as a significant factor in the company’s failures.
Nineteen employees were arrested and charged for promoting gambling to source VIPs for its high-roller business, 16 who was eventually imprisoned in a Chinese prison.
Crown Sydney is one of the most anticipated projects in Sydney, as it will give a new look to the Barangaroo waterfront area. The massive addition to the area will include a hotel, apartments, restaurants, and a VIP-focused casino.
Construction on the project finally began in 2016, though sometimes stalled periodically due to legal battles and other red tape. Though the estimated completion date has changed numerous times, it is now expected to open on Christmas Day 2020. That’s what James Packer says, anyway.
Packer Visits Sydney Site
Earlier this month, billionaire investor and largest Crown Resorts shareholder James Packer emerged from a mostly self-imposed exile from public life to tour the Crown Sydney development site. He seemed pleased with the progress of the $2.4 billion project at Barangaroo.
In fact, Packer was so pleased that he announced to the media that it would open to the public on Christmas Day this year.
The dates for the opening of the property have changed numerous times. When the project first began, the opening date was expected to be early 2020 for the first tower and the end of 2020 for the rest of it. But along the way, due to numerous battles over the height of the tower and other major details, the opening was delayed. Most expected it to open sometime in 2021.
Packer was particular, though, by naming Christmas Day of this year in his first public appearance in more than a year.
“It’s really pleasing,” Packer said to the media, referring to the opening being three months earlier than planned. “We are truly indebted to our builders, architects and tradies who have made this possible.”
Mid-2019 Issues Resolved
As mentioned, the Crown Sydney project had been delayed numerous times. The most significant and lengthy problem had to do with the height of the tower.
Crown Resorts believed they paid a price for the property that included an exclusive view of the harbor. At one point, Crown and its building partners discovered that the Barangaroo Delivery Authority(BDA), run by the New South Wales government, took bids from other companies for taller buildings that would hinder the Crown tower view.
The two entities went to court, and the battle moved through to the NSW Supreme Court. In December 2018, that court ruled for Crown, ruling that the BDA violated its development agreements with Crown and co-plaintiffs Lendlease.
An appeal by the BDA resulted in a settlement. The details were not publicized, but the NSW government dropped its appeal, and Crown retained its claim to the exclusive views.
Crown Sydney Project Details
The website dedicated to the project, which still boasts of an early 2021 opening date, gives insight into the new destination for visitors to Sydney. It is described as a “pinnacle of modern design that harmoniously brings together an opulent hotel, prestigious apartments, signature restaurants, premium gaming areas and a lavish spa.”
One Barangaroo will be the tower of residences – 82 of them – with views of the Sydney Harbour and its landmarks. The apartments range from 2-bedroom to 6-bedroom homes with some Duplex Penthouses as well.
Packer purchased two floors of the hotel, not the residence tower, that are being converted into a second home for him. “I grew up in Sydney, and my kids still spend time here,” he said. “It’s a beautiful place, and I hope to spend more time visiting.”
And there will be gaming. But Crown Sydney has taken special care not to call the casino a casino. The website calls it a “premium table games experience.”
Evidently, there will be no pokies, only table games like baccarat, blackjack, and roulette. And though the website is sparse on details, it does refer to a “VIP-only gaming facility.”
James Packer Crown Casino Sydney London
Previous Problems with VIP Gaming
The Crown scandal that took the company and gaming community by storm in 2019 had fallout that particularly affected VIP gaming in Australia.
James Packer Crown Casino Sydney Ny
Much of the spotlight was on VIP gamblers at Crown properties, many of whom used junkets to travel from Asia and gamble for high stakes. After the scandal broke, though, the government crackdowns began, and most junkets stopped.
This put such a dent in Crown’s bottom line that Crown Executive Chairman John Alexander had to acknowledge it at a shareholder presentation in late 2019. He revealed that VIP turnover for the first three and a half months of the new fiscal year, which started July 1, was down 46%.
James Packer Crown Casino Sydney Ireland
Crown blamed much of the downturn on the Chinese economy hurt by the United States and on the media that publicized the scandal.
Regardless, Crown Sydney is going to face a challenge to create a successful new VIP-only gaming facility, one with no pokies, at the new property. The new environment and scrutiny on high-stakes gambling will be a test of Crown’s dedication to gaming.