Crown could be forced to sublease Melbourne casino to rival
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“However the area to be subleased is limited to the casino area, and does not include the other parts of the Melbourne Casino Complex.
“In Crown’s submission, disintegration of the integrated resort would be more likely to result in reduced casino tax, significant inefficiencies, an inferior offering for customers and employees and a substantially diminished offering to tourism and the State of Victoria.”
It contended that this would go against the public interest, which the royal commission is obliged to consider when making its final recommendations.
Under the property plans, the areas which “constitute a casino” include gaming floors, VIP salons, back-of-house facilities and rights of access. Under any sublease of these facilities, Crown would also have to “use its best endeavours to facilitate the operation of the Melbourne Casino” by its rival operator.
The areas the James Packer-backed company would not be obliged to sublease include the hotels, restaurants, carparking, retail and administration areas connected to the Southbank site, the submission said.
But Commissioner Finkelstein already dismissed Crown’s claims that hiving off the Melbourne casino from the broader Crown brand and throwing the licence open to rival operators would cause long-lasting damage to Victoria.
He accepted there would be “dislocation” if a new casino operator was appointed in the inquiry’s last day of submissions, but added that the state’s sole casino is a highly profitable business venture that would continue to pay tax and employ Victorians no matter who ran it.
“So I don’t treat the employees at risk. I don’t treat third party contractors at risk, there might be some dislocation, but I don’t really see them at risk, except at the margins,” the commissioner said.
“The choice might be between you running the casino or someone else running the casino.
“If it is a profitable business, the way industry works is that someone will always step in.”
Crown has said that it is “open for the commission to find Crown unsuitable” after admitting to underpayment of state taxes, facilitating money laundering and its lax approach to responsible gambling, but that it should be allowed to continue to hold the licence with a monitor installed to oversee its reform program.
Commissioner Finkelstein had investigated the prospect of subleasing the casino site to another operator himself before the inquiry’s hearings ended, but asked the casino giant to undertake its exploration of the issue.
