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Crown Melbourne returns to suitability for gaming

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Crown Melbourne returns to suitability for gaming
The Victorian casino regulator announced this morning that it is “clearly satisfied” of Crown Melbourne’s suitability to hold Victoria’s only casino licence.

Crown Melbourne was found unsuitable to hold a casino licence in October 2021 based on findings from a state Royal Commission into the casino and its licence. The Royal Commission found a variety of failings in Crown Melbourne’s conduct.

In a press conference this morning, the chair of the Victorian Gambling and Casino Control Commission (VGCCC), Fran Thorn, confirmed Crown’s return to suitability.

“The commission today announces that it is clearly satisfied that Crown Melbourne is suitable to operate the Melbourne casino and that it is in the public interest for the Melbourne casino licence to remain in force,” she said.

Crown Melbourne has been under the supervision of a special manager, Stephen O’Bryan KC, for the last two years. O’Bryan has delivered four reports, totally more than 4,000 pages, documenting Crown’s progress with its transformation.

Today, Thorn said the special manager had found that Crown Melbourne had addressed the “systemic failings identified by the Royal Commission” and that the VGCCC during their investigations “have observed a very different Crown emerging, with a clear understanding of the privilege and obligations of holding the licence”.

Alongside its gaming floors, Crown Melbourne operates thousands of square metres of meetings and events space, across venues including the Crown Conference Centre, the Palladium Ballroom, and its rooftop space Crown Aviary.

There are also three hotels within the complex – Crown Towers, Crown Metropol and Crown Promenade. Together these properties offer just over 1,600 hotel rooms.

“This outcome is one of the most significant milestones in Crown Melbourne’s 30-year history,” said Crown Melbourne CEO, Mike Volkert.

“It would not have been possible without the efforts of our team members, who have worked diligently over the past two years to implement meaningful change that has truly transformed our business.

“What we have achieved must be a continual focus for everyone at Crown Melbourne. We know the work doesn’t stop here, and we are committed to delivering the highest industry standards and putting the welfare of our guests at the forefront of decision-making, day in and day out.”

The ownership of the entire Crown Resorts portfolio – also including Crown Sydney and Crown Perth – changed hands in mid-2022, with private equity firm Blackstone now in charge.

During this morning’s press conference, Thorn also highlighted the work that has been done over the last two years to provide a “plan B” option in the event that Crown had been found unsuitable to hold the casino licence.

“The Commission worked with government throughout 2023 to improve the powers of a statutory manager which would step in to oversee the casino’s operations should a decision be made to cancel the casino licence,” she said.

“Crown Melbourne was very aware that the Commission was putting in place arrangements that would enable an unsuitability decision to be put in place.

“The Crown Melbourne was required to commence work on preparing a transition out plan.

“The Commission engaged with Crown Melbourne, Crown Resorts and Blackstone to put in place enduring legal arrangements to facilitate a smooth transition to the statutory manager if the licence is cancelled – arrangements ensuring that the operations of the Melbourne casino would continue and the employees and businesses that make up the Crown Melbourne footprint would be unaffected by a finding of unsuitability against Crown Melbourne.

“Plan B was not the lesser option.

“It was a necessary precondition to whatever finding the Commission has made on suitability. To be able to act on an unsuitability finding was necessary to be sure that we could find Crown Melbourne unsuitable if the evidence supports that or if we make a decision that Crown Melbourne is suitable, we could be absolutely sure we did because it was the right decision not because of concerns about the disruption that would follow an unsuitability finding.

“We are determined to ensure that Crown is not, and will never be, too big to fail. These arrangements are enduring and can be activated now or in the future if any casino operator fails to deliver on its obligations.”

Thorn said that the casino would continue to be constantly monitored and that the VGCCC would not hesitate to act if needed.

“The ending of the special manager’s term in June this year will not leave a void or a reduction in the level of oversight and expectation of the casino,” she said.

“The VGCCC has been holding Crown to account in the last two years and we will continue to do so going forward.”

Thorn said they were already preparing for the next review of Crown, scheduled for 2027.

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