Crown resorts shares are posed to plunge Thursday when trading resumes after the NSW gambling regulator blocked the company from opening its new $2.2 billion Sydney casino next month until a review of its licence is completed in February.
Crown had asked for trading to be halted in the shares around 2.20pm on Wednesday because the regulator’s decision was imminent. The regulator held a media conference at 3.30pm to announce the decision now to allow the casino to open next month.
The shares were trading at $9.64 (down 0.6% for the day) when the halt was imposed.
Crown has planned to open its casino at Barangaroo in the middle of December, but regulator held an emergency meeting on Wednesday in light of the serious evidence the ongoing money laundering inquiry has uncovered.
The chair of Independent Liquor and Gaming Authority Philip Crawford said the regulator was “not comfortable” with Crown opening its gaming operations until the Bergin Inquiry had been completed.
Mr Crawford said it was disappointing that Crown did not take it upon themselves to delay the opening. “They are not picking up the vibe,” Mr Crawford told a Sydney media conference yesterday afternoon.
The decision on Wednesday came after Crown’s legal team changed tack suddenly and conceded to the Bergin Inquiry that criminals likely used two of its bank accounts to launder dirty cash.
Crown’s lawyers had previously urged Commissioner Patricia Bergin against finding that its bank accounts had, more probably than not, been used for money laundering despite numerous suspicious transactions.
However the NSW Independent Liquor and Gaming Authority inquiry heard on Wednesday morning that Crown tendered new statements at 11pm on Tuesday which revealed a major about-face, based on two reviews of the accounts by consultancies Initialism and Grant Thornton.
“Crown accepts that there were funds deposited into the Riverbank and Southbank accounts (of Crown) that Initialism has found to be indicative of ‘cuckoo smurfing’ – it is indicative of a form of money laundering,” Crown’s counsel Robert Craig, SC, told the inquiry yesterday.
(Cuckoo smurfing is a form of money laundering where large transactions are split into small transactions in a bid to disguise them).
Mr Crawford said the authority was not in a position to consider a range of essential regulatory applications on matters such as minimum bet limits, VIP membership policy, gaming area boundaries and “close associates” of the licence holder.
“We are hopeful that Crown Resorts will agree to our request to postpone opening of all gaming activities, which would
ld be unable to begin without approval of these regulatory matters,” Mr Crawford said.
“The authority has found ongoing evidence before the Bergin inquiry to be extremely concerning, and that any gaming activity at the casino before the inquiry’s findings are released in February 2021 and considered by the authority would pose unacceptable risks on the community against the public interest.”
He said ILGA was prepared to work with Crown to explore options that may allow non-gaming areas of the development to open next month.