The path to suitability
- The finding that Crown Melbourne is no longer suitable to hold its casino licence was inevitable. The conduct it engaged in for over a decade was so disgraceful that no other conclusion is possible.
- To decide what should be done, on the other hand, is more complex and requires a consideration of a range of actions, governmental and private.
- If, in a proceeding instituted by the regulator under the Casino Control Act, a casino operator is found to be an unsuitable person, the regulator may take one, or a combination of, the following steps:
- cancel or suspend the licence
- vary the licence
- impose a fine of up to $1 million
- issue a letter of censure, which can direct the casino operator to rectify a particular matter.1
- In recommending what action should be taken against Crown Melbourne, the remedies of a fine or a letter of censure can be put aside. Those remedies are simply inadequate in the circumstances.
- Under the current statutory regime, the remedies of licence cancellation or suspension are the appropriate remedies to be employed in the case of an unsuitable casino operator.
- In his 1983 Report, Mr Connor, QC recommended that a power of cancellation be included in the legislation. He was troubled that the power would not be ‘as effective a sanction as it seems on the surface’. He referred to evidence given by witnesses, both local and overseas, who expressed concern about the consequence a cancellation would have on tourism, the workforce, the State’s economy and the like.2
- Nonetheless, Mr Connor, QC said it is absolutely necessary that the power of cancellation should be in the statute and that, in appropriate cases, it be exercised for the long term integrity of the casino industry.3 He described cancellation as the ‘ultimate sanction’.4
- So, when there is serious and sustained misconduct by a casino operator leading to an unsuitability finding, unless the casino licence is cancelled or suspended, the unsuitable operator will be left in charge of its casino. That would be inconsistent with the objects of the Casino Control Act. And it would be contrary to the public interest.
- As a matter of principle, however, it is possible for circumstances to exist where a person who is an unsuitable casino operator need not lose its licence.
- Seeking guidance on this issue from what has happened in other countries is not often very productive. The applicable rules and regulations, as well as the norms of conduct, may be different. On the other hand, there are occasions where overseas precedent may be instructive.
- This is so with the decision of the United Kingdom Court of Appeal in the Knightsbridge case.5 There, three gaming club licensees (each a private company) had committed numerous and serious breaches of the Gaming Act 1968 (UK). The Gaming Licensee Committee cancelled their licences on the basis that each licensee was not a ‘fit and proper person’ to hold a gaming licence. The ‘fit and proper person’ test was the applicable test under the United Kingdom legislation.
- The licensees appealed the decision to the Crown Court. Before the appeal was heard, the owners of the licensees sold their shares to new owners.
- On the hearing of the appeal, the new owners argued that, whatever be the past sins of the companies, ‘they were completely reformed characters and were now fit and proper persons to hold gaming licences’ and it was not appropriate for the licences to be cancelled.6
- The Crown Court upheld the cancellation orders. It did so on the basis of the licensees’ previous misconduct. It decided that the change in ownership was irrelevant.
- In judicial review proceedings in the Court of Appeal to challenge the decision of the Crown Court, one of the points raised was that the Crown Court had made a mistake in refusing to consider whether the licensees had reformed their character. The Court of Appeal upheld the complaint. Whether or not a person was ‘fit and proper’ to hold a gaming licence had to be determined at the time of the hearing before the Crown Court. Accordingly, the Court of Appeal said that when the licence holder is a limited company it is necessary to take into account:
whether the shareholding or management of the company remains the same … as they were when the past misconduct occurred; [and] the general character and reputation of the shareholders and directors of the company at the date of the hearing … So should any evidence that the ‘re-structured’ licence holder has the capacity and intention to run the casino on different lines, or indeed that it may have already started to do so.7
- The following propositions can be drawn from this statement. First, a licensee that has engaged in serious breaches of the United Kingdom Gaming Act may, nevertheless, be a ‘fit and proper person’ to hold a gaming licence if it has fundamentally changed its ways. Second, the licensee may be able to satisfy the ‘fit and proper’ test if it intends to and will fundamentally change its ways.
- This is, however, only one side of the issue that needed to be considered. The Court of Appeal pointed out that a fundamental change of character by the licensee might not be sufficient to save its gaming licence. The Court of Appeal explained:
There may well be cases in which the wrongdoing of the company license holder has been so flagrant and so well publicised that no amount of restructuring can restore confidence in it as a fit and proper person to hold a license; it will stand condemned in the public mind as a person unfit to hold a license and public confidence in the licensing justices [who had cancelled the license] would be gravely shaken by allowing it to continue to run the casino.8
- The Court of Appeal went on to say:
If persons carrying on gaming through a limited company can run their establishment disgracefully, make a great deal of money and then when the licence is cancelled sell the company to someone who because he is a fit and proper person must be entitled to continue to hold the licence through the company, it will seriously devalue the sanction of cancellation … A licensing authority is fully entitled to use the sanction of cancellation in the public interest to encourage other operators or would-be operators of gaming establishments to observe the law ...9
- Translating these propositions into the mechanisms for action under the Casino Control Act, a casino operator may be a suitable person to hold a casino licence but it may no longer be in the public interest for its licence to remain in force.10
The nature of a corporation
- It might be helpful to explain in the more formal language used by company lawyers what the Court of Appeal had in mind when it referred to the ‘restructure’ of a corporate licensee so that it could become a ‘fit and proper person’.
- A corporation is an abstraction, a creation of parliament. It can carry out action—for example, engage in misconduct—only because the law attributes to the corporation the conduct of its directors and officers.
- A corporation has a personality and a reputation. The action of the individuals, directors and officers, for whose conduct the corporation is responsible, sets its personality and reputation. That reputation, though it is derived from the actions of individuals, is not attached to those individuals. It is attached to the corporation.
- A corporation is deemed to have knowledge. Its knowledge, like its reputation, is derived from the individuals who act on the corporation’s behalf.
- A corporation has a culture. The culture is made up of the corporation’s policies, programs and practices that prescribe the rules in accordance with which its directors and officers act.
- A corporation has an owner; its shareholders own the corporation. The shareholders have power to remove the individuals for whose actions the corporation is responsible and from whom the corporation derives its persona, reputation and culture. They can be replaced by individuals whose actions will produce a different persona, reputation and culture.
An alternative to cancellation
- Applying the approach suggested by the Knightsbridge case, a corporate casino operator that is unsuitable to hold a casino licence because of past misconduct may become a suitable casino operator and avoid the cancellation of its licence if the corporation has so thoroughly ‘re-made’ itself that it has, in substance, become a ‘different’ corporation. This transformation could happen if:
- the corporation recognises and understands the reasons that led it to be an unsuitable licensee and has implemented appropriate change
- the directors and officers whose conduct caused the unsuitability finding have been replaced with suitable directors and officers
- steps have been taken internally to eliminate any lasting influence of the directors and officers whose conduct led to the unsuitability finding
- any deficient systems, processes and programs that permitted or encouraged improper conduct have been repaired or replaced
- an appropriate culture exists
- the ownership of the corporation has changed.
- It might also be necessary to amend the regulatory framework that governs the casino operator to impose more rigorous obligations on the operator in order to prevent the recurrence of the conduct that led to its unsuitability.
- If these changes (internal and external) occur there can, in both a real and a commercial sense, be a ‘re-made’ corporation with a different persona, reputation, culture, management and ownership. Of course, in the eyes of the law, the corporation would remain as the same legal abstraction.
- If there is a fundamentally restructured licensee, there will be circumstances in which it is neither necessary nor appropriate to cancel or suspend the casino operator’s licence on the basis that it has transformed itself from an unsuitable person to a suitable person and there is no public interest why its licence should be cancelled.
- Here, however, there is a different situation. Crown Melbourne is an unsuitable person to hold its casino licence despite the reform program it has embarked upon. It nevertheless contends that it is not appropriate for its licence to be cancelled or suspended.
The case against cancellation
- Crown Melbourne says there is no need for any intervention for several reasons:
- Its current reform program will in the short term result in a company that returns to a state of suitability.
- The cancellation or suspension of the licence will give rise to potentially significant consequences for its financing arrangements. This could affect the viability of the company and group of which it is part, putting at risk the security of investors and employees alike.
- Over many years Crown has made a significant contribution to the State, tourism and the fabric of the Victorian economy and, in the end, there is no guarantee that if the licence were cancelled the State would find a new licensee as good at running a casino as Crown Melbourne has been and will make itself in the near future.
- In order to appreciate the import of these contentions and the effect they should have on the consequences of the unsuitability finding, it is necessary to look at them in a little more detail.
- The backdrop against which this examination takes place should be the observations made in the Knightsbridge case about, on one hand, the significance of the restructure of a corporate licensee, and the need to maintain the integrity of the licensing system on the other.
- The other matter to be borne in mind is that Crown Melbourne not only holds a casino licence, it is the owner of the Melbourne Casino Complex. The casino is but a part of that integrated resort and entertainment complex, which houses restaurants, bars, cinemas and nightclubs as well as hotel and conference facilities. Gambling only occurs within parts of the complex and those parts have varied slightly from time to time.
- When Crown Melbourne was granted its casino licence it was on the basis that all the activities that take place within the complex, not just the casino operations, would provide employment and tourism benefits to Victoria.
- Turning now to Crown Melbourne’s submissions, it is best to start with the alleged financial calamity that will result from a cancellation or suspension of its casino licence.
- The basis of this claim, which is spelt out in some detail in Crown Melbourne’s closing submissions, is conveniently summarised in a letter from the Crown directors’ lawyers to the Minister, written during the Commission’s hearings.11
- The purpose of the letter was to persuade the Minister not to accept any recommendation by the Commission that Crown Melbourne’s casino licence be cancelled or suspended. Not surprisingly, Crown directors’ lawyers did not provide a copy of the letter to the Commission. Quite properly, the State’s solicitors did.
- Be that as it may, Crown directors’ lawyers claim that the cancellation of Crown Melbourne’s casino licence or its suspension:
- gives rise to an event of default under its financing agreements
- the event of default may also trigger a cross-default under Crown’s Euro Medium Term Note (standing at approximately $180 million)
- may cause credit rating agencies to downgrade the Notes to non-investment grade and trigger a put option that if exercised would require Crown to redeem the Notes
- could ultimately lead to financiers calling up all its loan facilities (the bank debt standing at approximately $420 million and letters of credit of which approximately $99 million have been issued).
- The letter goes on to say that any event of default:
- may have severe consequences for Crown and its stakeholders including shareholders, employees, unions, trade creditors, patrons, the hotel precinct and the Melbourne tourism industry
- may cause the loss of employment or severe threat of loss of employment of more than 11,000 employees
- could give potential overseas suitors an opportunity to take advantage of the situation.
For these reasons, according to the directors’ lawyers: ‘It is not in the public interest for Crown to fail.’
- It is impossible to avoid observing that it was the height of ‘chutzpah’ for the letter to have been sent. This Yiddish word appears in modern dictionaries as meaning ‘colossal effrontery’ or ‘brazen gall’. It also means ‘presumption – plus – arrogance’ according to Rosten’s The Joys of Yiddish.12
- What the letter slides over is that whatever financial consequences stem from a cancellation or suspension of Crown Melbourne’s casino licence, they are consequences that have been brought about by Crown Resorts and Crown Melbourne. It is their dishonourable conduct that has led to the unsuitability finding.
- In any event, the claims of doom are overstated. First, it is likely that there have been extensive discussions between Crown and its financiers regarding the consequences of a loss of the licence. Second, it should also be assumed that contingency plans exist and alternative arrangements made (perhaps conditionally) to meet that eventuality.
- Yet the lawyers’ letter is bereft of any information about discussions along those lines. Even if, unlikely though it may be, there have been no discussions with the financiers, the letter should have said so.
- All in all, it would not be appropriate for the Commission to accept, in the absence of direct evidence, Crown Melbourne’s claims of financial ruin. This is not, however, to deny that the immediate cancellation of Crown Melbourne’s casino licence may well cause significant harm to a variety of other interests.
- The contention that Crown has made a significant contribution to Victoria, the Victorian tourism industry and the Victorian economy must be recognised. Crown Melbourne’s contribution has been significant and a good deal of it has been voluntary; for example, the work of the Crown Resorts Foundation. The loss of that continuing contribution would be a blow to Victoria and to the Victorian economy generally.
- Then there is the potential loss that might be suffered by those businesses—the hotels, restaurants, theatres, retail outlets and the like that operate in the complex—that depend for their custom on the millions who visit the Melbourne Casino.
- If the casino licence is cancelled it is likely the casino itself will stay, albeit under different management. Ignoring closures caused by the COVID-19 pandemic, the casino operations are lucrative—as even a cursory examination of Crown’s annual reports shows. In a free market economy, it is always possible to find a buyer who will take over a successful operation. The only contentious issue will be the price.
- It may, nevertheless, be assumed that on the cancellation of Crown Melbourne’s casino licence, the casino will be shut for some time, at least until a manager is put in place to run the business and then another operator steps in. At each point there will be disruption to the casino’s operations that will cause businesses in and around the complex to suffer.
- By now it should be clear that it is not appropriate to proceed on the basis that thousands of employees, from senior executives to kitchen hands, will lose their jobs if the casino licence is cancelled. No doubt there would be job losses. A new operator is likely to reduce existing staff numbers. That may happen at the senior levels as well. For many employees, however, the prospect is that the casino is likely to continue in operation as it has in the past.
- It should also be acknowledged that an immediate cancellation of Crown Melbourne’s licence would harm Crown Resorts’ minority shareholders, none of whom have had any involvement in the company’s misconduct. Little has been said of those shareholders. Perhaps this is because, for the most part, the minority shareholders acquired or retained their shares in the knowledge of at least some of Crown’s wrongdoing. For that reason, whether they suffer loss ought not influence what should occur.
- Finally, there is the contention that, given time, Crown Melbourne will return to a position of suitability. As the Knightsbridge case shows, this is a matter that requires serious consideration. At the same time, it is a contention that must be reconciled with the other statement in the Knightsbridge case regarding the importance of not undermining the purpose that lies behind the cancellation power—upholding the integrity of the licensing system.
- The return to suitability claim must also be reconciled with the proposition that it is inappropriate—and contrary to the public interest—to leave an unsuitable casino operator in charge of a casino on the basis that its efforts at reform might be successful.
- Nevertheless, quite apart from what was said in the Knightsbridge case, there are other reasons why a potential transformation to suitability by Crown Melbourne must be considered.
- One is that the Commission’s Terms of Reference provide that if Crown Melbourne is found to be unsuitable, the Commission must consider what action, if any, could be taken for Crown Melbourne to become a suitable person to continue to hold its licence.
- Another reason is that there may be more efficient means of dealing with a presently unsuitable casino licensee that may become suitable, other than by cancelling or suspending its casino licence.
- There is also the need to recommend, if possible, action that will avoid the potentially significant losses that may result from an immediate cancellation of Crown Melbourne’s casino licence.
- In that context, the interests of the State, and of the Victorian economy are very important considerations. Although the Commission does not accept Crown Melbourne’s end-of-the-world submission, it does acknowledge the real risk of harm to the Victorian economy if Crown Melbourne’s licence is immediately cancelled and a substitute licensee is not put in place quickly or at all.
- The extent of the harm cannot easily be measured in dollar terms. Most likely it would include loss of revenue for the tourism industry, loss of revenue for businesses operating at the Melbourne Casino Complex and loss of employment elsewhere. It could also have indirect consequences in other areas.
- To impose these potential harms on the State’s economy, weakened as it is by the COVID-19 pandemic, is a step that should not be taken lightly.
- It may be possible to avoid these potential harms if there exists an appropriate alternative to the cancellation of Crown Melbourne’s licence. That alternative is only worthwhile contemplating if there is a real possibility that Crown Melbourne can transform itself into a suitable person in the short term.
Transformation to suitability
- The prospect of a transformation to suitability—of Crown Resorts—was one of the issues addressed by Ms Bergin, SC in the New South Wales inquiry. She laid out a path for Crown Resorts to follow that would bring about the needed changes, the consequence of which would be that Crown Resorts would become a suitable associate of Crown Sydney, which could then regain its licence.
- The prospect of transformation was also given detailed attention during the Commission’s inquiries. This involved many witnesses and took up a large proportion of the Commission’s time.
- The issues investigated were whether Crown Melbourne could be transformed into a suitable person and how long that might take. Particular attention was given to aspects of the structure of Crown Melbourne (ownership, management and staff), its culture and its reform program.
- The problems that exist at Crown Melbourne have many causes. They include poor corporate governance, indifference to the wellbeing of its customers and employees, a deficient risk management system, a drive for profits that overrode other obligations and a penchant for improper behaviour.
- Following its investigations, the Commission reached the following conclusions, each of which is based on a detailed examination of material set out in other parts of this Report.
- The first is that it is possible for an organisation to change fundamentally the manner in which it operates. To adopt the words of Ms Bergin, SC, an organisation may ‘achieve a fresh start and emerge as a much stronger and better organisation’.13
- Crown Melbourne has commenced the task, although it has only done so because of media revelations of money laundering and links with organised crime, the findings of the Bergin Inquiry, and the existence of this Commission. Nevertheless, Crown Melbourne recognises that it can only become a person of good repute by doing whatever is necessary to implement its reform program.
- To that end, the following has occurred:
- an overhaul of the directors
- replacement of senior management
- payment of some unpaid casino tax, with interest
- implementation of a reform program with the assistance of appropriately qualified outside consultants
- a commitment to a constructive relationship with the regulator
- a ban on junkets.
- Second, while no material transformation has yet occurred, if it does it will take time.
- Third, there is no guarantee that the necessary transformation will occur. For example, Crown Melbourne has introduced some new controls to deter money laundering but as yet their sustainability is uncertain. Policies have been adopted to repair culture, but because of the seriousness of the misconduct, ‘the road ahead [is] long’.14
- It is clear that more fundamental action must be taken if Crown Melbourne is to return to suitability.
- Perhaps the most important requirement is the full implementation of Crown Melbourne’s reform program. This will involve many steps including, but not limited to:
- a ‘root cause analysis’ of why things went wrong
- implementation of reforms to its risk management framework
- repairing its broken culture
- investigating whether there have been AML/CTF contraventions in patron accounts
- substantially improving its AML/CTF processes
- putting in place appropriate responsible gaming policies with adequate staffing to implement them.
- Another necessary step is to change the ownership of Crown Melbourne. The harmful influence that CPH and its nominee directors brought to bear on Crown Resorts and Crown Melbourne is described at length in the Bergin Report. The damage caused to Crown Melbourne’s reputation will not be repaired until CPH is removed from its position of dominance.
- This is not answered by the undertaking CPH has given to ILGA that it will not exert any influence over Crown Resorts for some years. While CPH retains its shareholding its shadow remains.
- Yet another step is to secure the independence of the Crown Melbourne board. It must be free of influence from any outside source, including its holding company, Crown Resorts.
- Crown Resorts has commercial interests that are likely to be different from the commercial interests of Crown Melbourne. For that reason alone, it is not appropriate for Crown Resorts to have any influence over decision making at Crown Melbourne. There is another reason. Crown Melbourne is a regulated entity and, as a matter of principle, it should be beyond any outside influence.
- It is also necessary for Crown Melbourne to consider whether further changes are required at the executive level. This is not a matter the Commission spent much time considering. But it is clear that if there is to be a fundamental transformation of Crown Melbourne, it will be necessary to consider the role played by some of the existing executives in Crown Melbourne’s past misconduct. Whether they should remain in their present positions requires close attention. If there is even the slightest risk they will not change their ways, the executives should be moved on.
- Currently, Crown Melbourne’s reform program is a work in progress. Much remains to be done. But, when the steps are implemented, Crown Melbourne is likely to return to suitability. How long that will take is not clear. Crown Melbourne’s experts say that the reform program can be successfully completed within a year or so. Although this seems to be on the optimistic side, the Commission is prepared to proceed on the basis that it is a fair view.
- Somewhat reluctantly because of Crown Melbourne’s past conduct, but with sufficient confidence for the future, the Commission has formed the view that the immediate cancellation of Crown Melbourne’s casino licence is not in the interests of the Victorian community.
- There are two main reasons. First, there is the real risk of significant harm to the Victorian economy and to innocent third parties if Crown Melbourne’s licence were immediately cancelled. Although the extent of the harm cannot be measured, it may well be significant.
- The second reason is more important than the first. It is the Commission’s belief that Crown Melbourne has the will and the capacity to reform itself so that it again becomes a suitable person to hold a casino licence and can remove the stain on its reputation.
- This leaves open the question of what should happen during the time it takes for Crown Melbourne to complete its reform program. One thing that should happen is for legislative intervention to assist the reform program.
- To remove CPH as the dominant shareholder, it will be necessary to amend the Casino Control Act to ensure its shareholding is reduced to less than 5 per cent. A recommendation to that effect has been made.
- In order to remove Crown Resorts’ control of Crown Melbourne it has been recommended that a majority of the Crown Melbourne directors must be independent, including being independent of Crown Resorts. This would enable Crown Melbourne to have its own ‘directing mind and will’.15
- These reforms will assist the restructure process. But they do not deal with what should happen during the time it takes to complete the reform process.
- Plainly, it is not appropriate for the casino business to remain under the sole control of Crown Melbourne while it works towards suitability. Crown Melbourne has been found to be an unsuitable person to hold a casino licence and it would be wrong for it to be left in charge of the casino operations while that status persists.
- It is equally inappropriate for Crown Melbourne’s reform process to be unsupervised. Supervision is required so that, in due course, the regulator will know whether or not the transformation to suitability has been successful.
- At present, the only means of dealing with these twin issues under the Casino Control Act is to suspend Crown Melbourne’s licence and appoint a manager to run the casino operations until the reform process is completed.
- The appointment of a manager is a cumbersome solution, fraught with many practical difficulties, foreseen and unforeseen. One difficulty is how the casino operations would be integrated within the Melbourne Casino Complex.
- Effective integration would require a complicated set of arrangements between the manager and Crown Melbourne, in its capacity as the owner of the complex. The arrangements would need to deal with staff who work both at the casino and in other parts of the complex, customer access to the non-casino parts of the complex (hotels, restaurants and the like), customer access to car parking, and so on. It is reasonable to assume that it would take months to put appropriate arrangements in place.
- Suspension of the casino licence and the appointment of a manager would give rise to other problems. For instance, it would effectively shut down Crown Melbourne’s reform process as many executives and staff would likely become employees of the manager. Even if the reform program were not shut down, Crown Melbourne’s incentive for reform would likely be diminished.
- Another problem is the effect that even a temporary suspension of the casino licence would have on the ability of CPH to dispose of its shareholding in Crown Resorts at a reasonable price. It should be assumed the share price would suffer a significant decline in the event of a suspension.
- Many, if not all, of these difficulties could be overcome by the creation of the position of a Special Manager (by whatever name) with power to both oversee and monitor the affairs of an unsuitable casino operator until the casino operator reaches a state of suitability. In the meantime the licence can remain in place.
- It is important that the Special Manager has powers greater than a mere monitor. A monitor has only a watching role. In the case of an unsuitable casino operator, more than a watching role is required. Because the unsuitable casino operator should not be left in control of its casino, the Special Manager should have something akin to a binding directions power and a veto power over management decisions. Though the casino operator will still manage the casino’s operations, the Special Manager must have the final say over important issues.
- The objective is not to transfer control of the casino from the directors and senior management to the Special Manager. They should continue to perform their usual functions. What is required is for the Special Manager to have the ability to instruct the directors (and through them, management) to take or refrain from taking certain action to make sure nothing improper happens.
- The Special Manager should also have a reporting role. Upon appointment the Special Manager can be tasked to investigate specific aspects of the casino operations and report the results of that investigation to the regulator and the Minister.
- If the reason for the Special Manager’s appointment is the unsuitability of the casino operator, any reform program will obviously be among the matters addressed in the reports.
- The Commission has recommended that the Casino Control Act be amended to create the position of a Special Manager who will be able to carry out these functions.
- The decision about what should happen has not been easy to reach. There are powerful voices that say Crown Melbourne’s conduct has been so grievous that it has forfeited the right to operate a casino. They say that to allow it to continue to run the casino would undermine the integrity of the licensing system. It would also undermine the public’s faith in that system.
- This is a view that cannot be criticised. It is fairly based and reasonable. But it represents only one view.
- Equally important is the view that if there is a path to suitability Crown Melbourne should be permitted to take that path. The reasons for that have been explained.
- In weighing the competing views, the Commission was mindful that its Terms of Reference require it to have regard to the most practical, effective and efficient way to address the matters arising out of this inquiry. The Terms of Reference also require the Commission to have regard to the financial impact its recommendations would have on the State.
- Each of these considerations pointed to Crown Melbourne being given one, and only one, opportunity to reform itself.
- It is reasonable to assume that if Crown Melbourne stays the course of its reform program, and implements in full the reform recommendations made in this Report, all the while monitored and controlled by a Special Manager, it will become a suitable licensee; and potentially a model one.
- The scrutiny applied by the various inquiries, the ‘blazing platform’, the appointment of a number of reform-oriented senior managers, each point to Crown Melbourne substantially reforming, if not re-making, itself.
- As that process has already begun in earnest, the most practical, effective and efficient way to address Crown Melbourne’s current unsuitability is to set a deadline of two years by which time reform must be achieved. If Crown Melbourne has not reformed itself by the deadline, it will lose its licence. If it has, it will be permitted to continue to operate its casino business.
- Further, the process of deciding whether the reform process has succeeded should be truncated. There have already been three major inquiries into the affairs of the Crown group. No further time should be spent in going over the past.
- All that is needed at the end of the two-year period is for the regulator to make a speedy decision based on limited material. The regulator should make its decision within 90 days. The only material that the regulator should have are the reports of the several inquiries that have recently taken place and the reports of the Special Manager.
- It is also necessary for the task of the regulator to be made quite clear. It is not appropriate that the regulator apply the standard test of suitability in the Casino Control Act.
- For Crown Melbourne, greater certainty is required to diminish the possibility of error. Accordingly, it has been recommended that the regulator must be ‘clearly satisfied’ that Crown Melbourne has returned to suitability for Crown Melbourne to retain its licence. If a state of clear satisfaction is not reached, its licence must go.
- Finally, if the recommendations made in this Report are adopted, it may be appropriate (though not necessary) to prevent action being taken against the State by any dissatisfied person or any person who may have suffered any loss.
Recommendation 31: Actions against the State
It is recommended that legislation be enacted to the effect that:
- no action claim or demand whatsoever may be made or allowed against the State of Victoria or any responsible Minister of the State in respect of any damage, loss or injury alleged to have been sustained as a result of the implementation of any recommendation made in this Report
- no decision made to implement any recommendation in this Report may be subject to any appeal or any order in the nature of certiorari, prohibition or mandamus or the grant of any declaration or injunction.
1 Casino Control Act 1991 (Vic) s 20.
2 Xavier Connor, Report of Board of Inquiry into Casinos in the State of Victoria (Report, April 1983) [16.18].
3 Xavier Connor, Report of Board of Inquiry into Casinos in the State of Victoria (Report, April 1983) [16.19].
4 Xavier Connor, Report of Board of Inquiry into Casinos in the State of Victoria (Report, April 1983) [16.18].
5 R v Knightsbridge Crown Court; Ex parte International Sporting Club (London) Ltd  1 QB 304.
6 R v Knightsbridge Crown Court; Ex parte International Sporting Club (London) Ltd  1 QB 304, 310–11.
7 R v Knightsbridge Crown Court; Ex parte International Sporting Club (London) Ltd  1 QB 304, 317.
8 R v Knightsbridge Crown Court; Ex parte International Sporting Club (London) Ltd  1 QB 304, 318.
9 R v Knightsbridge Crown Court; Ex parte International Sporting Club (London) Ltd  1 QB 304, 318–19.
10 Casino Control Act 1991 (Vic) s 20(1) (definition of ‘grounds for disciplinary action’).
11 Exhibit RC0415 Letter from ABL to the Minister for Consumer Affairs Gaming and Liquor, 2 July 2021.
12 Leo Rosten, The Joys of Yiddish (McGraw-Hill, 1968) 92–3.
13 Exhibit RC0970 Bergin Report Volume 2, 1 February 2021, 573.
14 Exhibit RC0477 Elizabeth Arzadon, Expert Opinion regarding Culture Change at Crown Melbourne, June 2021, 25.
15 Tesco Supermarkets Ltd v Nattrass  2 All ER 127.
Reviewed 25 October 2021