Victorian government announces royal commission into Melbourne licence

Mr Finkelstein is a highly regarded barrister in Victoria who was appointed a judge of the Federal Court in 1997 but retired in 2011 and returned to private practice. His terms of reference are tightly focused on the company’s officeholders and the Victorian law, and include investigating whether Crown Melbourne or any of its representatives were suitable to hold a casino licence, whether it was in the public interest for Crown to continue holding its licence and whether there were any changes required to Victorian legislation.

The Victorian government said a royal commission’s ability to compel witnesses and documents made it the best way to establish the facts. Premier Daniel Andrews issued a statement saying the inquiry was “about making sure that those who hold a casino licence in Victoria uphold the highest standards of probity and integrity – and that they’re accountable for their actions”.

But Mr Andrews did not attend Monday afternoon’s press conference, leaving Gaming Minister Melissa Horne to answer questions. Ms Horne said the reports from the NSW inquiry were “incredibly concerning”.

Helen Coonan, Crown’s executive chairman, said in a statement that Crown “welcomes the announcement” and the company would “fully cooperate with the royal commission”.

“It provides an opportunity to detail the reforms and changes to our business to deliver the highest standards of governance and compliance, and an organisational culture that meets community expectations,” she said.

Reverend Tim Costello, chief advocate for the Alliance for Gambling Reform, said he was “thrilled”.

“For nearly 20 years I’ve been saying we need a royal commission, and I didn’t think I’d live to see it. Maybe I can now depart in peace.” He said Mr Finkelstein was “a really good appointment”. But he warned that it was unlikely Crown would lose its licence as a result of the royal commission.

However, “Crown would still be feeling quite comfortable”, he said, pointing out that the Andrews government had extended its licence to 2050. “During the Bergin inquiry, Premier Andrews said of course we wouldn’t be cancelling Crown’s licence. … [so] we know Crown still have a fair bit of protection.”

He said Victorians had “lost confidence in Crown and in the government’s ability to govern Crown”.

Federal MP Andrew Wilkie, elected on a gambling reform platform a decade ago to a seat in Tasmania, said the royal commission was the only credible option left to the Andrews government.

“For decades a series of Victorian governments, Liberal and Labor, have profited from the organised crime run out of the state’s only casino … A judicial inquiry can hopefully also get to the bottom of the political protection racket that has plagued this issue.”

Anti-gambling campaigner Stephen Mayne said the royal commission also needed to “compel current and former Victorian regulators and key political figures, including Jeff Kennett, Daniel Andrews and former gaming minister Marlene Kairouz to give evidence, broadening on the work of the Bergin inquiry, which focused more on Crown personnel”.

“Issues worthy of exploration include evidence of Crown’s lobbying and political power, including through the regular political donations that it makes and the long line of political figures that it has hired to influence the political and regulatory process.”

State opposition gaming spokeswoman Steph Ryan said the government had been “shamed into calling a royal commission”.

“This is the royal commission Daniel Andrews didn’t want to have,” she said. “Never before have we seen a royal commission announced at 4.30pm on a Monday by a junior minister with the Premier nowhere to be seen.”

Former state gambling regulator Peter Cohen said the royal commission was “inevitable” because of what the NSW inquiry had uncovered, and that Mr Finkelstein needed to “look at the relationship between the state and the Commonwealth when it comes to money laundering responsibility”.

NSW’s 18-month inquiry into Crown, conducted by former Supreme Court judge Patricia Bergin, examined evidence of the casino operator facilitating money laundering through its bank accounts, going into business with “junket” tour partners linked to triad organised crime gangs and disregarding the welfare of its staff in China before 19 were arrested there in 2016.

Commissioner Bergin’s final report this month found these failures made Crown unfit to hold a casino licence in NSW, with its core problem being “poor corporate governance, deficient risk management structures and processes and a poor corporate culture”.

The scathing report led to the resignation of Crown’s chief executive, Ken Barton, and four directors including former AFL boss Andrew Demetriou.

Ms Horne said the Victorian Commission for Gambling and Liquor Regulation had been examining the 800-page Bergin inquiry report since it was handed down in early February.

“We’ve gone through that report line by line and understood our commercial contracts and got the legal advice as to what the most appropriate response to those findings are,” Ms Horne said.

“What we need to appreciate as well, though, there are hundreds of people, thousands of people, working in Crown. We need to make sure that we’re protecting jobs, but also we’re doing it in a way where a casino is operating in a suitable manner.”

Crown will continue to hold its licence while under investigation by the royal commission. Despite repeated questioning, Ms Horne would not yet commit to accepting all of the recommendations, including any about whether Crown was fit to hold its gaming licence.

She said there was a “lot of water to go under the bridge” and the government would be working with the royal commission to see what the findings would be “and then stand ready to act”.

Western Australia launched an inquiry with the same powers of a royal commission into Crown’s Perth casino last week, leading to accusations the Andrews government was dragging its feet given the most concerning evidence related to Crown’s flagship Southbank casino.

The Victorian government has for years resisted an independent investigation into Crown, despite damning evidence aired in media reports and tabled in Federal Parliament.

Ms Horne defended the casino regulator, saying it had been conducting reviews every five years into Crown’s suitability to hold a licence.

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However, the Auditor-General in 2017 found the regulator had not been properly scrutinising money laundering by high rollers at Crown. Inspectors from the VCGLR were simply “not paying sufficient attention to key areas of risk”, the state’s financial watchdog found at the time.

Ms Horne has flagged splitting the VCGLR and establishing a separate casino regulator in response to the findings made by the Bergin inquiry. She said there would be a government-led investigation into the effectiveness of the regulator and how it could be reformed.

The gambling and liquor regulators were merged in 2012; it had been beset by a lack of leadership, training of staff and reduction in funder under the previous government, the Auditor-General found in 2017.

“Since receiving [that] report, the government has taken advice about the most appropriate way to proceed in Victoria,” the statement said.

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“Establishing a royal commission will ensure the most appropriate access to information regarding Crown Melbourne’s suitability to hold the casino licence given the commission’s powers to compel witnesses and documentation.”

The government had already established a review of Crown’s suitability to hold its licence. That review will now occur in parallel with the royal commission.

“The royal commission will establish the facts and the government and the [state regulator] will take any necessary action at the conclusion of the investigation. We will not tolerate illegal behaviour in our gaming industry.”