On 12 March 2021, the Western Australian Government formally appointed a Royal Commission into the suitability of Crown Perth to continue to hold the casino gambling licence for the Crown Casino Perth.
The Royal Commission’s Terms of Reference and the short period of time that the Commission has been given to complete its work raise interesting questions of law and policy.
Background: the New South Wales Inquiry
Over the last several years, Crown Resorts has been building a $2.2 billion skyscraper for a new casino at Barangaroo on Sydney Harbour.
Crown’s plan to open the new Barangaroo casino was thwarted by media reports that Crown had partnered with junket operators backed by organised crime syndicates, and that money had been laundered through Crown’s Australian operations.
Regulators were forced to intervene.
On 14 August 2019, the New South Wales Independent Liquor and Gaming Authority appointed an inquiry under the Casino Control Act 1992 (NSW) (the Bergin Inquiry) to, amongst other things, inquire into whether Crown’s wholly-owned subsidiary was a suitable person to continue to give effect to a gaming licence for a new casino at Barangaroo.
The Bergin Inquiry issued 187 summonses, received approximately 81,000 documents and held 60 days of public hearings in which it heard from 47 witnesses.
On 1 February 2021, the Bergin Inquiry delivered its final report, which found that Crown’s subsidiary was not a suitable person to give effect to the gaming licence at Barangaroo.
Inquiries in Victoria and Western Australia
On 11 February 2021, the media reported on findings by the Bergin Inquiry that international criminal organisations were believed to have laundered hundreds of millions of dollars through Crown Perth using a Crown-owned shell company.
On 16 February 2021 the WA Gaming and Wagering Commission, which regulates casinos in WA, recommended to the Minister for Racing, Gaming and Liquor that an independent inquiry be established to determine, amongst other things, whether Crown Perth was suitable to hold a casino gambling licence.
On 22 February 2021, the Victorian Government announced it would be establishing a Royal Commission into Crown Melbourne’s suitability to hold its Victorian casino licence.
On 5 March 2021, the WA Minister for Racing, Gaming and Liquor announced that a Royal Commission would be held into the suitability of Crown Perth to continue holding a casino gaming licence. At that time the Minister said: “There have been determinations by the Bergin inquiry in NSW about our casino operations… We can’t act on those findings, we have to have our own inquiry”.
Terms of Reference
The Terms of Reference for the WA Royal Commission provide that the Commission is to inquire into and report on whether Crown Perth is a suitable person to be involved in gambling operations and to continue to hold the gaming licence for the Crown Casino. The Commission has been directed to have regard to:
- “the Bergin Report including any matters referred to therein (including the allegations, issues, findings, observations, materials and recommendations referred to therein)”; and
- “public transcripts of evidence before the Bergin Inquiry and such other materials provided to or otherwise considered by the Bergin Inquiry”.
The Terms of Reference also declared to the Commission that:
“to facilitate the proper and expeditious conduct of the inquiry, you are not required to inquire, or to continue to inquire, into a particular matter to the extent that you are satisfied that the matter has been, is being, or will be, sufficiently and appropriately dealt with by another inquiry or investigation or a proceeding”.
On that basis, it appears that the Royal Commission will not be required to inquire into any matter that has been dealt with by the Bergin Inquiry. Further, it appears the Royal Commission will not be required to look at anything that is being investigated by the Victorian Royal Commission or another regulatory or law enforcement agency.
It also appears that it is contemplated that the Royal Commission will be entitled to rely on the findings and recommendations of the Bergin Inquiry when making its own findings and recommendations. Given the Minister’s explanation as to why the Government needed to hold a separate inquiry, this is unusual.
Notably, the Commission is required to deliver an interim report by 30 June 2021 (a little over 3 months’ time) and its final report by 14 November 2021.
Given that the Bergin Inquiry took 18 months to complete its work, this appears to be a very short amount of time and may explain why the Terms of Reference allow the Commission to rely on the Bergin Inquiry and not require it to investigate matters that have been dealt with by other inquiries and authorities.
Potential legal issues
While this is no doubt expedient and avoids the Commission needing to “reinvent the wheel”, it gives rise to an issue as to what extent the Commission will have the opportunity to conduct its own investigations and form its own views before reporting back to the Government.
It will be interesting, for example, to see how the Commission conducts its own investigations and public hearings and whether the Commission relies on or has regard to the evidence before or the findings of the Bergin Inquiry where that evidence or those findings are disputed by parties before the Commission.
Crown has announced it will fully cooperate with the Royal Commission. However, the findings and recommendation of the Bergin Inquiry and allegations made in the media mean there is a significant risk that the Royal Commission may recommend, and the Government may decide, that Crown Perth should not hold a gaming casino licence.
Given the huge commercial stakes for Crown and decisions by Royal Commissions can be subject to judicial review by the courts, the unusual drafting of the Terms of Reference and the short timeframes given to the Commission may give rise to legal challenges to the Commission’s establishment and findings in the future.
Should that happen, all bets are off.