A government report peeking into the murky world of casinos is casting Australia’s Crown Resorts in an unsavory light. But investors see a chance to m
A government report peeking into the murky world of casinos is casting Australia’s Crown Resorts in an unsavory light. But investors see a chance to make off like bandits. That might not work out as planned.
The gambling authority of New South Wales state—where Sydney is located—on Tuesday released a report saying Crown Resorts is unsuitable to hold a license for its new Sydney casino unless some changes are made. While the report isn’t legally binding, regulators will surely pay heed. The casino part of the development isn’t open yet and the fate of the $1.7 billion skyscraper overlooking the harbor is in doubt.
The 751-page report alleges Crown has allowed money laundering and turned a blind eye to dealings with people linked to organized crime. It also said Crown ignored the welfare of its employees in China. Before the pandemic, high rollers from China were a key revenue source for Crown, which owns casinos in Melbourne and Perth. The company worked with junket operators, some of which had ties to organized crime, to bring those gamblers to its casinos, the report said. China arrested 19 Crown employees in 2016 for allegedly recruiting gamblers to go aboard.
Not only is the fate of Crown’s new Sydney casino hanging in the balance, regulators from other states will likely look into the company’s other casinos, too.
Crown’s chairman says there is a need for “root and branch” change. The report said Crown’s structure and operations were compromised by the remote management and maneuvering of billionaire James Packer, who owns 37% of the company through his firm Consolidated Press Holdings. Two directors linked to CPH have resigned.