A Question of Public Interest

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Exactly what is in the public interest when it comes to determining whether Crown Melbourne should retain its casino license in Victoria?

On 22 February 2021, the appointment and terms of reference of the Finkelstein Royal Commission into Crown Melbourne were gazetted in Victoria. This followed on from the Bergin inquiry conducted in New South Wales, which had reported some three weeks earlier, among other things, that Crown Sydney was not a suitable person to give effect to the Barangaroo restricted gaming license, and that its parent, Crown Resorts, was not a suitable person to be a close associate of the company holding that gaming license. Much of the conduct identified by Bergin as inimical to suitability related to the Melbourne casino, operated by another subsidiary of Crown Resorts, Crown Melbourne.

A key distinction between the two inquiries lies in the fact that Patricia Bergin was appointed by the New South Wales gaming regulator, the Independent Liquor and Gambling Authority, whereas Ray Finkelstein has been appointed by the Victorian Governor-in-Council. Commissioner Finkelstein will report to the Parliament of Victoria, which is responsible for the articulation of public policy and the development and passing of the legislative framework which gives effect to it. The Victorian casino regulator, the Victorian Commission for Gambling and Liquor Regulation, has effectively been sidelined. Indeed, Commissioner Finkelstein is required to consider whether changes should be made to the legislative framework administered by the VCGLR as a consequence of the Commissions findings or recommendations.

Since much of the heavy lifting associated with identifying, investigating and characterizing matters going to the suitability of Crowns respective licensed entities in Sydney, Melbourne and Perth, and the parent company itself, has been done by Bergin, it may be expected that Finkelstein will devote considerable time to addressing Term of Reference D: Whether it is in the public interest for Crown Melbourne to continue to hold the casino license in Victoria. This is the point at which the difference between a Royal Commission and an inquiry commissioned by a casino regulator becomes material.

Victorias Casino Control Act requires the VCGLR to conduct periodic reviews of, among other things, Crown Melbournes suitability to hold the casino license and whether or not it is in the public interest that the casino license should continue in force. The Act defines public interest as something to be determined by the regulator having regard to the creation and maintenance of public confidence and trust in the credibility, integrity and stability of casino operations [emphasis added].

Ray Finkelstein QC is heading up Victorias Royal Commission into Crown Resorts.

This definition does not apply to restrict the breadth of Finkelsteins assessment of whether the public interest is served by allowing Crown Melbourne to continue to hold the Victorian casino license. His powers do not derive from VCGLR, or the Casino Control Act; they are drawn from the Inquiries Act of 2014, which gives the Commissioner greatly enhanced powers and jurisdiction to pursue the Terms of Reference.

An example demonstrates the point. Casino operations, as the VCGLRs yardstick for determining whether the public interest is served by the licensee, are essentially the internal processes and systems deployed in the conduct of permitted gaming activities. Not included are matters such as the quality and independence of governance of the entity holding the license, its compliance with legislation other than that regulating the casino license and the conduct of gaming (such as anti-money laundering laws), and the contribution that the casino may make to the welfare and economic development of Victoria.

Although those matters are not criteria relevant to the statutory license reviews conducted by VCGLR, they are clearly within the purview of factors to which a Royal Commissioner may advert when seeking to establish whether the public interest is served by allowing Crown Melbourne to continue to hold and exploit its casino license.

The complexity which the public interest test raises for the Finkelstein Commission lies in the criteria it applies to guide its determination, and the relative weight which it attaches to each criterion. It will need to establish just who is comprised within the scope of the public. Does the term include anti-gambling advocates, whose opposition is more to casinos themselves rather than to Crown Melbourne as a licensee? Should such a normative view be accorded greater weight than say an empirical view of the performance of the licensee in complying with the terms of its license?

It is this tension which perhaps underlies Crowns reluctance to concede that money laundering actually took place at Crown Melbourne. If it did concede the point, the normative would align with the empirical, which would provide much greater gravitas to those arguing that the Crown Melbourne license should be revoked on public interest grounds.

Normative arguments such as those advanced by the concern sector (generally an amalgam of religious and welfare groups) are often met with the response that Crown Melbourne is the largest single-site employer in Victoria, that the Crown Southbank complex is one of the most visited destinations in Melbourne and that the casino is one of the states leading taxpayers. While all of that may be true, are those metrics uniquely a product of Crowns investment and operational expertise, or are they an outcome which might be expected of any skilled casino operator having conducted a state-sponsored monopoly business for more than 25 years in what will soon be Australias largest city? To what extent has Crowns alleged non-compliance with laws against money laundering and doing business with organized crime groups contributed to the return it has generated for the state, however that may be assessed?

Public interest tests have been in use in areas such as privacy and national security legislation and in liquor licensing for many years in Australia. Yet there remains remarkably little guidance, either legislative or judicial, regarding the content of such tests. Either by design or default they have become rather subjective, and no real effort has been made to define the term, or a methodological approach to determining it.

If Finkelstein contributes nothing further to what has already been established by Bergin, it should add to the analytic jurisprudence which supports our understanding of what a public interest test requires where a casino license is involved.