Crown Resorts to go into default if it loses licence

In closing submissions to Victorian Royal Commission, Crown Resorts warned that if it loses its licence in the state, there is a “very real potential” of default on its debt facilities.

Australia.- In its final submissions to the Victoria Royal Commission, Crown Resorts has stated that if it loses its licence, the company could go into default.

The casino operator argued that its venue in Melbourne is one of the biggest single-site employers in the state with more than 11,500 employees. It said it has paid at least AU$1.4bn in casino taxes and community benefit levies since 2014.

Crown Resorts said it has made further changes and reforms, but Adrian Finanzio, counsel assisting the inquiry, has told Victoria’s Royal Commission that Crown Melbourne should lose its casino licence due to serious misconduct.

Finanzio argued that the evidence against Crown Melbourne during the inquiry showed “serious misconduct, illegal conduct and highly inappropriate conduct, which has been encouraged or facilitated by a culture which has consistently put profit before all other considerations.”

He also said that Xavier Walsh, Crown Melbourne’s chief executive, and former executive chairman, Helen Coonan, were not appropriate people to remain connected to the casino operator.

Xavier Walsh will step down as chief executive officer of Crown Melbourne on August 20 while Helen Coonan will resign from her role by the end of the month.

Despite the situation, J.P. Morgan believes the casino operator will keep its licences in Western Australia and New South Wales, but possibly with new conditions.

Royal Commissions held in other industries such as banking and financial services which inquired into money laundering, terrorism financing, and statutory reporting responsibilities, made large numbers of recommendations, including on the restructuring of some fees. 

A Royal Commission into trade union governance and slush funds in 2014/2015 resulted in a recommendation for the creation of a new national regulator. 

Victoria’s Royal Commission into Crown Resorts will continue until October 15 after the government approved judge Raymond Finkelstein’s request for an extension.

Judge denies risk to jobs if Crown loses Melbourne licence

In July, Crown Resorts’ lawyer Leon Zwier wrote a letter to the Victorian gaming minister Melissa Horne warning that 12,000 jobs would be at risk if Crown is unable to retain its gaming licence. The letter, which was made public on the last day of public hearings held by Victoria’s Royal Commission, also noted that the casino operator wouldn’t comply with its lending covenants which total $700m if it loses the licence.

However, former Federal Court judge Raymond Finkelstein, who’s leading the Victoria’s Royal Commission into Crown Resorts, has rejected Crown Resort’s claims that jobs would be at risk if it loses its licence for Crown Melbourne, saying that another company would eventually step in to take over the venue.

Meanwhile, a Western Australian Royal Commission into Crown Perth will continue until March 2022.