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Crown woes leave NSW facing $400m in lost tax revenue

The independent Bergin inquiry found that Crown Resorts is unfit to hold a casino licence in NSW, with a scathing report released this week confirming Crown had “facilitated money laundering”.

Gambling regulators in NSW and Victoria earlier took aim at Mr Barton and Mr Demetriou for their refusal to resign after being heavily criticised in the report.

Victorian Commission for Gambling and Liquor Regulation chief Catherine Myers said on Thursday she would demand the pair explain why they should be allowed to be involved with the group’s flagship Melbourne casino.

That came hours after her NSW counterpart, Independent Liquor and Gaming Authority chair Philip Crawford, said that Crown needed to part ways with Mr Barton and the former AFL boss Mr Demetriou if it ever wanted to open its new casino at Barangaroo.

Commissioner Patricia Bergin’s findings were released publicly on Tuesday afternoon.

Commissioner Patricia Bergin’s findings were released publicly on Tuesday afternoon.

Former Supreme Court judge Patricia Bergin’s report found that Mr Barton was “no match for what is needed at the helm of a casino” and called Mr Demetriou’s appearance at her public inquiry “unedifying”.

Mr Crawford said there was no guarantee Crown would be able to make itself suitable to open the new casino in NSW.

However, under the deal signed by the NSW government and Crown to open Sydney’s second casino, the regulator was contractually bound to work with Crown to try to make it suitable.

“They haven’t operated in this state yet, and they may never. They’ve got a lot of work to do,” Mr Crawford said.

The Bergin inquiry also found Crown “disregarded the welfare” of its staff in China before 19 were arrested there in 2016, and went into business with high-roller junket tour groups linked to organised crime groups.

The report said Crown’s core problems were “poor corporate governance, deficient risk management structures and processes and a poor corporate culture”.

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Crown chairman Helen Coonan said on Thursday that she accepted the criticism from the report was warranted and repeated “our unreserved apologies for these shortcomings”.

“We do not underestimate the scale of the problem and appreciate there is a need for ‘root and branch’ change,” she said. “This change has commenced.”

Crown was set to open the gaming floors at its Sydney casino in late December but the regulator blocked it from doing so after evidence of money laundering at Crown’s Melbourne and Perth casinos emerged in the Bergin inquiry.

The delay will probably result in a hit to the NSW government’s coffers.

Macquarie market analysts this week said it would take two years for Crown to do the restructuring work required to be deemed fit to finally open its Sydney casino.

The most up-to-date published tax revenue forecast from casinos, which includes The Star and Crown resorts, was predicted to deliver the government $848 million between 2021/22 and 2023/24.

However, budget papers show the government was forecasting casino tax revenue to drop from $394 million in 2018-19 to $158 million in 2020-21. It would not recover to $311 million until 2023-24.

“Casino revenue has been revised down by $190.5 million over the four years to 2023-24, reflecting stricter border restrictions resulting from COVID-19,” the budget papers say.

A spokesman for Treasurer Dominic Perrottet said the NSW government “was prohibited from disclosing any taxation information relating to an individual taxpayer”.

Crown Resorts paid a $100 million licence fee to the government when its licence was granted in 2014.

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The licence can only be cancelled through disciplinary proceedings under the Casino Control Act and the NSW regulator has the sole responsibility for taking disciplinary action against Crown.

If the regulator follows all the relevant processes and determines that the licence should be cancelled, then it can do so without triggering a claim from Crown for compensation.

However, if the compensation provisions in the agreements are triggered, then the government will need to return the $100 million licence fee, minus a $5 million deposit.

Mr Crawford also left the door open to the regulator moving to reduce Mr Packer’s 37 per cent shareholding, saying it was something the regulator’s board would discuss when it meets on Friday.

“The influence has already been diluted by his retreat from the board, that’s a really positive start,” Mr Crawford said.

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