Second Reading

Mr D O’BRIEN (Gippsland South) (12:37): It is a pleasure to rise on my first bill as the Shadow Minister for Gaming and Liquor Regulation and to speak on the Casino Legislation Amendment (Royal Commission Implementation and Other Matters) Bill 2022. In doing so I will begin with a bit of background. This is the third tranche of legislation in what has been a fairly sordid story when it comes to Crown Casino and the Labor government in this state. I would like to pay credit to my predecessor, the member for Euroa, for her role in helping to push the government towards action on what has been going on at Crown for a number of years that ultimately resulted in the Finkelstein royal commission. The royal commission, whose report was handed down last year, came about as a result of the Bergin inquiry in New South Wales. So it was not something that actually was highlighted by the Victorian regulator or the Victorian government but it was pressure from an inquiry in New South Wales which highlighted many issues with respect to Crown, including that Crown Melbourne facilitated millions of dollars to be laundered through a bank account of one of its subsidiaries and that Crown Melbourne allowed operators with links to organised crime to arrange for junket players to gamble at the casino. That finally brought about the institution of the Royal Commission into the Casino Operator and Licence, as it is formally known, overseen by commissioner Ray Finkelstein AO, QC. He handed down his final report in October last year, and there were 33 recommendations. A couple of statements from the commissioner really get to the nub of what had been happening at Crown and its behaviour. He said:

… for many years Crown Melbourne had engaged in conduct that is, in a word, disgraceful. This is a convenient shorthand for describing conduct that was variously illegal, dishonest, unethical and exploitative.

Those are pretty strong terms to reflect on what had been going on at Crown Casino under the Labor government and under the watch of the then Victorian Commission for Gambling and Liquor Regulation (VCGLR). It was probably no surprise to most Victorians who had been paying any attention to what had been going on with Crown, and I will come to that in a moment. What the commissioner then did was he basically, although Crown was found to be an unsuitable operator of the casino licence in Victoria, stopped short of recommending that that licence be taken away from it, predominantly because of the risk that the cancellation of Crown Melbourne’s licence would cause considerable harm to the Victorian economy and innocent third parties, and that includes the thousands of staff, obviously, at the casino, and the suppliers, contractors and many others of course that rely on the casino.

The government agreed in principle to all the royal commission’s recommendations. We have had two sets of legislation, the first last year that acquitted nine of the recommendations, including establishing the special manager, who was ultimately appointed in January this year as the very respected Stephen O’Bryan QC, and also establishing the Victorian Gambling and Casino Control Commission to replace the Victorian Commission for Gambling and Liquor Regulation. Then there was a second tranche of legislation in June just gone that implemented a further two recommendations, while another recommendation has been actioned directly by the VGCCC.

This legislation implements a further 12 recommendations of the royal commission, but I would like to just return to some of the background to this. We first had concerns raised, I guess, about the casino’s behaviour in 2016, when 19 Crown employees were arrested in China for allegedly promoting gambling illegally. That set off significant alarm bells. There was concern obviously within Crown, but significant reports of what was actually going on in Crown’s attempts to get the high rollers over here set off some concern.

In 2017 the Auditor-General found that money laundering by high rollers at Crown was not being properly scrutinised by the regulator. So it is a concern that the Victorian Commission for Gambling and Liquor Regulation was not doing its role in actually properly oversighting the casino, particularly with respect to money laundering, but there were various other areas that I will come to. In 2018 the VCGLR itself completed its sixth casino review, and it included the line:

The VCGLR, other regulators and law enforcement agencies are aware of the significant potential risks of money laundering through casinos, particularly through junket operations.

It was something that was on their radar, but clearly there was very little that actually happened. In 2019 we had then Fairfax and 60 Minutes—so the Nine group—run an exposé in which they alleged Crown was working with junket operators backed by organised crime. This was another alarm bell ringing here. Then in the same year we had the ABC obtain leaked footage of a man literally carrying in a blue cooler bag and pulling out bricks of cash—$50 and $100 notes—at the casino and just handing them over, and there was not a question raised and there was no-one batting an eyelid. This is a further concern.

All of this was happening at a time that the Andrews government was in charge and that the VCGLR was meant to be oversighting the casino. It only came about from evidence at the New South Wales Bergin inquiry that there were serious problems and the government acknowledged that there were serious problems. I go back to what the Premier actually said in relation to some of these issues that were raised in the media. On 30 July 2019 the Premier said:

They’ve got the powers that they need. And anyone who’s got any concerns around Crown or any other operator within our gaming industry should with confidence go forward either to Victoria Police if they think it’s a criminal matter or go to the VCGLR …

So the Premier was effectively saying, ‘Nothing to see here. Let’s all move along. There is no particular issue’. I think that is symptomatic of the problem. We then had questions raised at the Public Accounts and Estimates Committee. The minister said in response to those questions:

… the independent regulator has undertaken an enormous amount of work. Without a doubt they have been incredibly thorough in their investigations and also, too, been working through a pretty robust process.

We had allegations of organised crime links and allegations of money laundering, and yet nothing was actually done because the minister thought that there was a ‘pretty robust’ process underway. This is where credit goes to the member for Euroa—the opposition started to raise concern and take action here in this Parliament. It was not until it looked like there would be the numbers established in the other place to establish a select inquiry into Crown, into the government and into the regulator that the government was finally forced to act. The member for Euroa did her own research at the time and discovered that in the last 20 years there had never been a royal commission announced without the Premier of the day. Yet in this case it was the minister sent out on her own at 4 o’clock on a Friday afternoon to announce the establishment of this royal commission. Everyone in politics knows that Friday afternoon is taking out the trash time. It was deliberately designed to limit exposure for the government, and the Premier was nowhere to be seen. We can only speculate why this has always been the case, but we know that the government has been pretty close to Crown over the years. Indeed, going back to the 2014 election, the casino founder, Lloyd Williams, told the Premier—unfortunately for him within earshot of the cameras—that James Packer was going to ‘kick every goal he can’ for Labor at that year’s election. The full quote was:

You should probably know I am the executor of the Packer estate, and James—


is going to kick every goal he can for you …

I will let Victorians draw their own conclusions as to why the Labor government was so absolutely bereft of action when it came to Crown Casino and the illegal activity that was going on there.

Members interjecting.

Mr D O’BRIEN: I am hearing tut-tutting from those opposite. Can I say it again—Crown had:

… engaged in conduct that is, in a word, disgraceful. This is convenient shorthand for describing conduct that was variously illegal, dishonest, unethical and exploitative.

What did the government do about that? For years, they did nothing. They did nothing. Finally, when it looked like an upper house inquiry would be established—

Mr Edbrooke: On a point of order, Acting Speaker, I am reluctant to be on the record as saying ‘tut-tut’ and being misquoted. My question actually asked for the opposition to show the Hotmail email from the Leader of the Opposition.

The ACTING SPEAKER (Mr Blackwood): That is not a point of order, and you well know that.

Mr D O’BRIEN: I do not really know what the member for Frankston is on about. That was simply bizarre, and I am glad he has left the chamber. ‘We’re bad, but look at you’—that seemed to be the comment that was being made. The government has got plenty to be embarrassed about here. There is absolutely no question that their failure of oversight of Crown has been well and truly exposed by the royal commission that was ultimately established.

I want to go to the bill itself now in some detail. There are 12 recommendations of the royal commission that are implemented by this bill. I understand further recommendations will be implemented in the next 12 months, including one more through legislation. It is up to the government to explain why that is not occurring in this legislation, but as I said, this is the third piece of legislation to implement the recommendations of the royal commission. Part 1 and much of the first part of part 2 are minor technical amendments. In clause 6, with respect to reports of the special manager, there are changes to the time lines. I will come back to the detail on clause 6 because it is important when it comes to the reports of the special manager.

Further into this part is the implementation of a supervision charge. Effectively this is requiring Crown to be responsible for the costs of oversight by the VGCCC. As I understand through both the legislation and the briefing that we received, at the end of the financial year the VGCCC will tally up its ‘reasonable costs’ and then a charge will be applied retrospectively to the casino for those costs. I understand that there will be verification of those costs from the Department of Treasury and Finance, but I do note that there is no appeal mechanism at all for the casino to challenge whether those costs are reasonable or not, and that is interesting. I would hope that the word ‘reasonable’ is applied judiciously.

Division 2 of the bill makes changes with respect to associates and changes the meaning of an associate as it relates to the casino and its ownership. There are, further into this division, the clauses with respect to corporate ownership. What the bill does in effect is implement recommendation 28, which is to ensure that no-one holds more than 5 per cent of the casino ownership without approval from the VGCCC. Again, there is a process for any person or corporation seeking to own more than 5 per cent, and again, the bill enables the costs of any investigation to see whether those people or organisations are a suitable person to be recovered, and I do not have any issue with that.

New division 3 going into the principal act, the Casino Control Act 1991, implements recommendations 29 and 30, and that is to ensure that directors and executives of the casino are in fact independent. That is to address the issue raised in the royal commission about the influence of a significant shareholder—in the case previously, with respect to Crown, of James Packer—and the influence that he exerted both on directors and staff. There will now be a requirement for independent directors and staff.

Division 3 goes into the transition provisions for the management of the casino. In effect, if Crown is unable to satisfy the conditions that have been put through in this bill and previous legislation as well and it does not qualify to retain its licence, then there need to be some transition provisions. These are appropriate. Effectively it is putting in a manager that will run the casino in the interim until such time as there is a sale or transfer of assets. The bill sets out the actual area of the casino that this applies to and also the rules by which the manager will operate. That includes dealing with third parties. It includes providing a fair rate of return to Crown in the interim while a manager is in operation and indeed also includes, not surprisingly, that any profits that may be remaining after that are returned to the Consolidated Fund. There are also obligations for the casino operator with respect to third parties. I can understand that. I would be concerned that if there were a situation where Crown were to lose its licence, there would be a whole lot of contractors and suppliers turning up wanting their equipment and wanting their payments and everything. The arrangement for a manager in a transition period will allow us to manage that.

There are a number of other changes. There is the introduction of exclusion orders and fines. Part 5 is a change to the Tobacco Act 1987, which is to ban smoking. That is a nice little headline in the minister’s media release, but the reality is that Crown had already done that. Where it had an exemption for its high-roller rooms, that exemption is now being legally removed as well. Given that Crown had already chosen to do that, it is legally important but practically redundant at the moment.

Division 5 is probably the most significant part of the bill, and that is with respect to the changes to how people can gamble—so the introduction of carded play and precommitment. This will be a world first—so the government says; I understand New South Wales has recently passed some similar legislation. The effect of these, as I understand it—and I am not a casino punter—is that if you want to play the pokies or play a table at the casino, you will have to go up to a cashier or a window, for example. You will need to provide your ID. You will need to get a card. You will need to set a limit. You will not be able to put more than $1000 cash onto that card. And then you will go to an electronic gaming machine or a table and play. The challenge with this is that the technology for implementing this does not yet exist, and that is why there is a three-year period. I am not sure whether that is going to be enough time, but I hope that this will be enough time for the casino and for suppliers around the world to deliver this.

I now want to just go back to part 2, clause 6—the reports of the special manager. As I said, this section changes some wording on the timing of when the special manager should report. As it stands, the minister or the VGCCC may release those reports if they believe it is in the public interest to do so. We think on this side that it is important to actually ensure that it is available to the public, and so under standing orders I wish to advise the house of amendments to this bill and request that they be circulated.

Opposition amendments circulated by Mr D O’BRIEN under standing orders.

Mr D O’BRIEN: The amendments effectively ensure that the reports that are produced by the special manager into how Crown Casino is meeting its obligations to this legislation and prior legislation should be tabled in this place. As I said, at the moment section 36G(4) of the Casino Control Act 1991 basically says it is up to the minister to decide. We think that should be publicly declared, publicly provided, because it is an important principle of transparency and accountability. As I demonstrated earlier, there has been very little transparency and accountability from the government as to the oversight of the casino or to the performance of the former VCGLR, and in that context in particular we think that the reports of the special manager should in fact be made public and done so by tabling them in this house and the other place. I go to the point that was actually mentioned in the second-reading speech by the Minister for Consumer Affairs, Gaming and Liquor Regulation, that:

… Commissioner Finkelstein made clear in his final report, holding Victoria’s casino licence is a privilege, not a right.

Well, we agree, and in that context we think it is the right of Victorians to have full transparency on the assessments of whether Crown continues to deserve that right or not. We know that once again the government is refusing us the opportunity to go to consideration in detail and to actually debate this amendment. There are other questions I would have. I would be more than happy to go into consideration in detail with the minister and further prosecute the 60-odd pages of this legislation and to ask some of the detail of how the government intends it to actually work and certainly to debate those amendments.

We moved similar amendments to the bill in 2021 to ensure that these reports were tabled, and of course the government decided not to support those amendments. As it stands, Victorians will not get to see the reports of the special manager unless the minister or the VGCCC actually believes it is right to do so. If there is something a little bit controversial or a little bit embarrassing for the government in what the special manager has found with respect to Crown’s management of the casino, it will be locked away until we know the final decision as to whether Crown will get to keep its licence. So we think it is very important for transparency and accountability that these reports are made public.

There are a series of reports over the next few months, and clause 6 outlines the details of when they should be. I would encourage all members in this place and indeed in the other place as well, when the opportunity comes, to support those amendments. But we are not opposing this legislation. We have also agreed in principle to the royal commission’s recommendations, and we look forward to its passage.

Sitting suspended 1.00 pm until 2.01 pm.

Business interrupted under sessional orders.

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