Crown Resorts takes extraordinary steps to deny crime link claims, but faces five separate inquiries and calls for a royal commission

'This is new territory': Australia's powerful Crown casino faces scrutiny like never before

It is an action of last resort when handling an extreme corporate public relations crisis: if your world is exploding around your ears take out a full-page advertisement in the daily newspapers to protest your innocence.

Crown Resorts, the powerful and highly recognisable proprietor of the largest casino complex in the southern hemisphere and product of Australia’s second-most powerful business dynasty, the Packer family, reached for the PR nuclear button last Thursday.

The advertisements were a vigorous denial of allegations made in the Australian media that Crown had, in an effort to attract Chinese high rollers to its Melbourne gaming rooms, partnered with people linked to organised crime and encouraged staff based in mainland China to stretch strict laws against promoting gambling, which led to 19 Crown staff members being arrested in China in 2016.

Victorian government orders investigation into Crown casino crime allegations Read more

The allegations were reported by Nine Entertainment Company, which formerly shared ownership with Crown, in its flagship newspapers and television current affairs program 60 Minutes. Crown shares dropped 7.7% in two days after the report aired.

It was, said Crown, in a lengthy missive signed by its entire board, a “deceitful campaign” of “poor or misleading journalism”.

The Crown advertisements ran in the newspapers operated by Rupert Murdoch, a longtime rival of the Packers, whose domestic media empire once rivalled his own, but were not printed in Nine’s papers.

Instead those papers ran a defence rebutting each of Crown’s claims, one by one.

For a company used to exercising its sizeable influence to silence critics, it was a novel experience.

“They are big players and they’re used to getting what they want,” Dr Charles Livingstone, an anti-gambling advocate and longtime critic of Crown, told the Guardian. “This is new territory.”

‘Like crossing Rupert’

Crown’s influence in Australia began as an extension of the influence wielded by the Packers, who have been a dominating force in the cultural and business landscape for three generations.

Sir Frank Packer was a media mogul who owned a stable of newspapers and magazines and launched the television network which became Nine.

His son, Kerry Packer, made a name for himself internationally when he set up World Series Cricket, a commercial rival to the traditional game. He was reported to be the heavyweight behind Crown’s successful bid in the early 1990s to operate a planned casino in Melbourne, a project that the Victorian government believed would revitalise Melbourne’s struggling nightlife.

In 2008, three years after Kerry Packer died, his son, James Packer, a business partner of Robert De Niro and Brett Ratner and former fiancé of Mariah Carey, sold his media interests and focused on Crown, particularly the push to build a new high roller casino at Barangaroo in Sydney.

Twelve months ago Nine bought Fairfax Media, the longtime employer of the award-winning investigative reporter Nick McKenzie. It financed his months-long investigation into Crown, which hinged on thousands of pages of leaked corporate documents.

There is, to followers of Australian media, a delicious irony in Nine being the organisation to potentially bring Crown undone.

“When James Packer’s dad ran Nine … they weren’t people you wanted to cross,” Livingstone says. “It was like crossing Rupert [Murdoch]. You could guarantee poor coverage through multiple outlets, which would be of no great advantage to any politician. They don’t really have that clout any more, and I suspect it’s no coincidence that these revelations are starting to come thick and fast once that connection to power has evaporated.”

Two months ago Packer changed course again, selling almost half of his 46.1% stake in Crown to Melco Resorts and Entertainment, with whom Crown jointly opened the Hollywood-themed Studio City resort in Macau in 2015.

Uneasy lies the Crown: weary Packer changes direction and Barangaroo with it Read more

(You may remember Studio City from the Martin Scorsese-directed $70m, 15-minute short film/advertisement starring De Niro, Brad Pitt and Leonardo DiCaprio.)

Negative publicity, particularly around Crown’s conduct in China, could cause difficulty for Packer’s plans to sell more of his share to Melco. It has already been complicated by the arrests of Crown staff. Crown is facing a class action from its employees who were arrested in the night-time raids in October 2016.

Allegations that Crown retained junket operators linked to Macau triads to attract high rollers could cause further issues. Junket operators are used by all casino operators to attract wealthy punters from mainland China, where both gambling and promoting gambling is illegal.

Crown defended its relationship with junket operator Suncity, which has been blacklisted from the Hong Kong jockey club, but said it no longer works with any of the other junket operators listed by Nine and had a “robust process for vetting junket operators”.

Among those alleged to have arrived on a private jet bound for Crown is a cousin of the Chinese president, Xi Jinping.

After allegations about the links between junkets used by Crown and the Macau triads, the Australian Criminal Intelligence Commission confirmed that it was also investigating the relationship between junkets and Australian casinos as part of a taskforce established in 2013 called Targeting Criminal Wealth.

It is one of five Australian authorities that is actively investigating, or has been asked to investigate, criminal or corrupt conduct linked to Crown.

One of the investigations concerns the alleged shooting of wombats, which are protected Australian wildlife, on the property of a top performing junket operator.

The inquiries

Two days after the new allegations were published, the independent Tasmanian MP Andrew Wilkie exercised his parliamentary privilege to outline the allegations of a former Crown driver turned whistleblower, who had contacted Wilkie through his PokieLeaks website.

The driver, Wilkie told parliament, routinely transported foreign high rollers from Crown’s private jet at Melbourne airport, where they were not subject to any border checks.

“Foreign nationals were getting off with up to 15 bags for a short stay, stopping only on the way to the casino to pick up a sex worker,” Wilkie said.

He called for a parliamentary inquiry, which was backed by five crossbench MPs but voted down by the ruling Coalition and the opposition Labor party.

Rebekha Sharkie, from the minor party Centre Alliance, accused the major parties of ignoring the allegations because Crown is a major political donor.

Former government officials say the government’s hesitancy could be less sinister and more difficult to resolve: an effective crackdown on Crown could result in a licence suspension or cancellation.

Crown is the largest single-site private sector employer in both Victoria and Western Australia, with 18,000 direct employees. It paid $650m in federal and state taxes in 2018. Shutting it down, even temporarily, would cause economic shockwaves.

Independent and minor party MPs, including the Greens, used the allegations as grist to renew calls for a federal anti-corruption body.

Former gaming minister demands Crown investigation over crime link claims Read more

Livingstone went further, saying: “A royal commission into the gambling industry is looking increasingly like a good idea.”

The federal government, with the opposition’s support, referred the allegations to the Australian Commission for Law Enforcement Integrity (ACLEI), an acronym not known for its teeth.

“It’s a snow job and the government and the opposition will be hoping that the world moves on,” Wilkie told the Guardian. “This is a remarkable case of the failure of our regulatory and justice system and governance at both federal and state levels.”

Wilkie had already referred earlier allegations of money laundering and drug trafficking at Crown to the Victorian Independent Broad-based Anti-Corruption Commission. The Victorian gaming regulator also called a snap investigation.

In a statement, a Crown spokesperson said Nine’s reporting “has been based on unsubstantiated allegations, exaggerations, unsupported connections and outright falsehoods”. Nine rejects the statement and Crown has not provided evidence to support it.

Crown said it “welcomes the opportunity to provide any information to law enforcement and regulatory agencies”.

Even if Crown survives five concurrent inquiries without a scratch, Livingstone said, the company could still be in trouble.

“If the allegations are not properly responded to, the stink is not going to go away,” he said.