Crown Resorts' plan to open a landmark casino in Sydney has hit a major roadblock. The company owned by Sydney-born Billionaire James Packer has been deemed unfit to hold a gaming license following the release of a damning report accusing it of being involved in money laundering and organized crime.
Retired judge Patricia Bergin published a 751-page report on the company's alleged illicit activities Tuesday. She also made several recommendations for government regulators, including limiting Packer's ownership cap to 10% - he currently holds a 36% stake in the company.
Bergin also called on the CEO and key directors to step down from their positions and for a major overhaul of the company's culture and organization structure. She advised regulators to only grant the company a license to open a new casino if the conditions are met.
In her report, Bergin said that Crown was guilty of enabling and facilitating money laundering activities linked to its Perth and Melbourne casino bank accounts. She said that the company had also prioritized profits before the welfare of its own employees. Bergin accused the company of knowingly working with people connected with organized criminal groups.
The New South Wales state gaming authority is expected to review and discuss Bergin's recommendations next week. Regulators in neighboring states where Crown Resorts is already operating are also reportedly considering launching a review of the company's suitability.
"They've got a lot of work to do to satisfy us. Things have got to change," NSW gaming regulator chairman, Philip Crawford, told reporters Wednesday.
Following the release of the report, Crown's share price fell by as much as 8.9% Wednesday. The dip decreased the Melbourne-based company's total market valuation to about $5.11 billion.
The report is one of the most damning ever published against an Australian company in recent memory. Analysts said that it may serve as the final nail in the coffin for Packer's hold on his family's sprawling empire, which has dominated the country's gaming and entertainment industry for decades.
"If that's enforced, Crown will be changed forever. It's a watershed day in terms of recommendations," analysts at the University of Melbourne said about the proposed limit on individual shareholdings.
