James Packer appearing in the Crown inquiry (Image: supplied)

James Packer has forgotten much about his involvement in or influence on the development and operations of the Crown Casino group, of the shares in which he still owns 36% and of which he was chairman for eight years until 2015.

That’s the summary of his evidence to the inquiry being conducted by Patricia Bergin QC into whether Crown should still be considered fit and proper to operate Sydney’s second casino, currently rising up on the western foreshore of the city’s CBD.

The NSW government, which handed Crown its casino licence in 2014 in an opaque, behind-closed-doors process so deeply venal that words fail to describe it, was forced into this inquiry with all the enthusiasm of a three-year-old eating greens.

However, it had no choice, after the media went big with strongly-evidenced allegations that Crown had been engaging in money laundering, breached gambling laws and partnered with “junket” operators with links to drug syndicates, human trafficking and organised crime. That language, by the way, comes from the inquiry’s terms of reference, so I’m not being hyperbolic.

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NSW’s casinos are regulated by the Liquor and Gaming Authority, which is tasked by the governing legislation with, among other things, “ensuring that the management and operations of the casino remains free from criminal influence or exploitation”.

Globally, the regulation of casino licences typically hangs on that central concern: that they be kept out of the hands of organised crime. The background to that is the historical fact that the first US casinos were conceived, built and for decades operated by the Mafia, in both Las Vegas and Atlantic City. The model was replicated in Asia’s gambling mecca Macau.

The biggest shark in the Macau casino pool was, for a long time, Stanley Ho. His notoriety, and US regulators’ warnings about his connections, had caused the NSW government to insert special conditions in Crown’s Sydney casino licence prohibiting Ho from ever getting his fingers near it.

When Packer announced in May 2019 that he was selling 19.9% of Crown to Ho’s son Lawrence, via his vehicle Melco International, the fun really began. Stanley had an indirect interest in Melco via a family trust. From a probity perspective, the deal stank. (Ultimately, Melco backed out.)

Meanwhile, Crown had been merrily pursuing the great gambling whales of China, openly running a representative office there staffed by Australian employees whose job was to entice the high rollers to Crown’s casino in Melbourne, in clear contravention of Chinese law which prohibits exactly that activity. In 2016, 19 Crown staff were arrested and jailed as the Chinese authorities cracked down.

As for the “junkets”, well, basically they’re a bunch of criminal syndicates whose profession is combining high roller recruitment with the facilitation of money laundering and every other form of sophisticated cross-border criminal activity imaginable. Crown was in bed with a bunch of them and its due diligence processes were a poorly concealed joke.

It has to be said that Crown has passed six probity reviews by Victorian casino regulators since it began operations there, as well as the NSW government’s initial investigation into its suitability to hold the second Sydney licence. According to the regulators, it’s been a model casino operator.

In a sense, that’s true. Casinos the world over have always performed two social functions: the wholesale redistribution of wealth from addicted gamblers to casino owners (with a healthy clip going to the governments who license them); and making life easier for organised crime. The last emotion we should feel about the revelations pouring out in the current inquiry is surprise.

Bergin’s task is to determine whether Crown is a “suitable person” to hold a casino licence. One could ask the rhetorical question, is anyone? Even so, the baseline for suitability surely is that Crown can be trusted to ensure that organised crime is kept outside the shiny revolving doors, and that the casino does nothing worse than relieve people of their savings.

Packer’s evidence to the inquiry should at least reassure us of three things. First, when he decided to sell 20% of Crown to Melco, although he knew about Stanley Ho’s indirect interest and the conditions prohibiting Ho from being associated with Crown in any way, he “just didn’t give the matter any thought. I had forgotten it”.

Second, although he was chairman of Crown while it was busily building up its illegal operations in China, he had no knowledge of any of that or the fears the China-based employees had been voicing for some time before they were arrested. Apparently, that was all kept from him.

Finally, after he stepped down from the board, he continued to have constant direct contact with Crown’s senior executives, receiving daily financial updates from the finance director and making regular “requests” on operational matters. Most unusual for a mere shareholder in a public company.

Packer finished up his three-day grilling yesterday by conceding he may be forced to sell down his stake in Crown to secure the casino’s license to operate in Sydney. He also said he would not return to the Crown board or continue to receive background information on the company’s financial performance.

Will that be enough to save the license?

Packer says his bipolar disorder is the cause of his memory loss, which can be accepted and protect him from criticism to a sensible degree. However, casino licence suitability, like being an airline pilot, is a public trust with a necessarily harsh standard (at least, in theory).

Bergin will have to pick through the evidence to work out who is really running Crown; whether its board and executive team are genuinely performing their functions or doing someone else’s bidding; whether Crown’s direct acts of criminality, and its lax allowance of itself to be co-opted by organised crime in entirely predictable ways, render it unsuitable to hold a casino licence at all.

It’s an unsavoury spectacle — and very, very Sydney.