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RUBY:

From Schwartz Media, I’m Ruby Jones. This is 7am.

Earlier this year, a blistering Royal Commission report found that Crown Casino in Melbourne had links to organised crime, enabled money laundering and behaved in ways that were ‘illegal, dishonest, unethical and exploitative’.

Despite all that, Crown managed to keep it’s licence - for now, though it's been forced into a two year probation period.

So how has it managed to evade serious consequences for misconduct?

Today - senior fellow of the Centre for Public Christianity, Tim Costello, on the relationship between politics and gambling, and how Crown Casino ultimately became too big to fail.

It’s Tuesday, November 9.

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RUBY:

Tim, you were voicing concerns about the development of Crown Casino right at the very beginning, when it was first proposed. So can you take me back to that time - what was the tone of the conversation around the development? What were politicians saying about it?

TIM:

Well, they all knew that in 1983, Francis Xavier O'Connor, a Supreme Court judge, had done an enquiry into should there be a casino in Melbourne, and he had said absolutely no because organised crime will follow.

But in the 90s, we had an economic crisis really in Victoria.

There'd been trams that had all stopped in the city and people on strike. And ‘The guilty party’ is the campaign that Kennett ran against Labor and he promised to get the city humming again.

Archival tape -- Jeff Kennett:

“Ladies and gentlemen, it's been a long, long road.

But it is a great state. It has known better days and it will know better days in the future.”

TIM:

And so there was sort of a rather than an enthusiasm, a resignation of we've got to get economic activity going. So what had been unthinkable because it would just bring in organised crime in 1983 suddenly became thinkable. And so the temporary casino opened in 1994, and I might say that's what what got me really agitated.

Archival tape -- Reporter:

“The sound you're hearing now in the background is part of the multi-million dollar fireworks display. We're told it's one of the biggest to have ever been staged in the southern hemisphere.”

TIM:

I saw Jeff Kennett then premier opening the temporary casino while they were building. the permanent one opened in 1997, and a current affair followed the opening. And Jeff Kennett said This casino is a beacon of hope. This casino represents the new spirit of Victoria...

Archival tape -- Jeff Kennett (1997):

“It is therefore with great pleasure that I declare Melbourne's Crown entertainment complex officially open.”

[Crowd cheers]

[Crown event music fades out]

TIM:

And it was like an electric shock through my body. Hope? And he's talking about a casino? That was the moment where I thought, something's profoundly wrong here.

RUBY:

Hmm. And you became quite vocal in your opposition to Crown, can you talk me through that and perhaps through some of the things that you were saying, particularly I'm thinking about when you went on air with Neil Mitchell?

TIM:

Yes. So I became, I guess, the leading opposition to Crown.

And when Crown organised its 20 million plus opening party, I organised the week after a not the casino party where we had Archie Roach and a whole lot of musicians come and sing.

So when in 1997, the permanent casino, the one we now know opened, Neil Mitchell was broadcasting from Studio 3AW Studio in the casino. I remember it had glass and people were watching us as we started to lock horns and as we locked horns and the volume went up. I remember looking at one point and saying it had gone from a couple of people or about 100 people watching it, because I said to Neil, Look, there's so much money here, there's so much power here. It's going to buy all of us. It’s going to buy the media.

Neil took that very personally. I'm not bought. How dare you? And threw me out mid-interview.

RUBY:

Wow.

TIM:

So the sense that you were meant to be in the compulsory cheer squad for Crown because it was just so wonderful for Melbourne and reviving our economic fortunes was very strong then.

RUBY:

So can you tell me a bit more then about what your criticisms and what your fears were at this point in time? Because it seems like you were standing in opposition to others in the media and also those in politics as well?

TIM:

Yes, then I was a very lone voice. I actually remember The Age in 1996 before Crown opened, editorialising against me and saying, Go away, you're a wowser, you're a killjoy. And I felt very alone.

Look, my concerns were twofold. They were that Crown's business model really was organised on effectively high rollers, laundering their money, enabling organised crime. And secondly, built upon pokies that I'd already suddenly realised were built for addiction.

RUBY:

Hmm. So 25 years on, would you say that your fears have borne out?

TIM:

Absolutely. And I don't say that with any pleasure. This has damaged so many Victorian lives, tens of thousands of Victorians' lives. And my my fears were were borne out.

Look, I knew back then the casinos were they basically existed worldwide to launder money. That's what the Francis Xavier Corner report in 1983 warned. And I'd seen that and read that I then had my own personal experiences with people who didn't have problems and then suddenly were addicted.

My concerns were the Crown's whole business model was built upon effectively laundering money and addicting, vulnerable people with it two and a half thousand pokies. The very two things that the Finkelstein Royal Commission found. And he was unsparing in his criticism of Crown for its doing damage to so many Victorians through its pokies and enabling organised crime.

RUBY:

We’ll be back after this.

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Archival tape -- 60 minutes:

“Tonight, the culmination of a six month long joint investigation. We reveal a corporate scandal involving Australia's largest casino operator Crown.”

RUBY:

Tim, in 2019, 60 minutes broadcast a report, making public a lot of allegations about misconduct at Crown.

Archival tape -- 60 minutes:

“We've obtained tens of thousands of documents from inside Crown's corporate headquarters…”

RUBY:

Things like enabling money laundering, connections to organised crime syndicates.

Archival tape -- 60 minutes:

“They show a lust for profits drove an arrogant culture where almost anything, including courting people with ties to the criminal underworld, was not only allowed but encouraged.”

RUBY:

That report eventually led to a Royal Commission. Can you tell me about what that Commission found?

TIM:

So the Royal Commission investigated Crown's links to organised crime, its junkets, its non-compliance with the money laundering requirements under law and found that they'd failed.

It recognised the harm, particularly Crown pokies were doing to Victorians. And that's why the commissioner, in his recommendation, said it's outrageous, they're predatory. They exist really to addict people.

So the recommendations firstly said it's unfit to hold a licence but then because there's 12,000 jobs at stake, they should be given two years under a special manager unprecedented in any corporate law in Australia.

Crown really is on notice to see if the new board can change the culture and function as it should function within the law and really prove that though it is so big, it is a law abiding citizen.

RUBY:

Right, and what has the response been like to the report - what has the Victorian government said? And will it implement the Commission’s recommendations?

TIM:

So the government said of the 33 Finkelstein recommendations, they are immediately implementing nine and saying now with two years of probation for Crown with this special manager Stephen O'Brien, the presumption is Crown will lose its licence at the end of two years unless Stephen O'Brien says they have reformed, and he made recommendations that the fines should be $10 million for breaches. The government said No, we're making them $100 million.

He said that anyone who plays Crown Pokies has to have a membership card and they have to set a limit on their losses and be locked out for 36 hours if they go over that.

And we are now going to see in this most unusual structure whether Crown can on probation reform itself. Back in 1997, when I was really disturbed by what was happening with the size of Crown, I'd never heard of the phrase too big to fail. Of course, we now all have with the global financial crisis and the banks, particularly in America, being bailed out and really suffering no penalties. That's in my view, what this Royal Commission has shown about Crown.

Everything the commissioner said said it should lose its licence. The counsel assisting the commissioner said it should lose its licence. He found it should lose its licence, and Crown has kept its licence, proving too big to fail here in Melbourne.

RUBY:

So if it’s your view that Crown is too big to fail -- what should be done? Do you think it’s power needs to be diluted?

TIM:

Absolutely. Yeah. Look, the truth is that we have known all this for the last 25 years.

We have known about this for a long time, why did nothing happen? One, because the regulator was utterly captured. Secondly, because political parties were absolutely captured, the spruiking of Jeff Kennett, which I was very critical about, Jeff and I exchanged a lot of love messages in the media toward each other over Crown Casino. But he just said, you know, this is just so good for Melbourne.

And then Labor that used to cheer me on for attacking Crown and saying, well, if we win, power will be clipping its wings Tim. As soon as they got into power, they fell under Crown’s spells straight away. They started having the fundraisers at Crown. I was aghast.

How? It's the donations of Crown. It's the sense that it now controls the culture of Melbourne, from the Brownlow to the walkley’s to everything. And that power is just too dominant and it's too dominant because Crown is just too big.

The rest of the world look at Australia, and they say it's no wonder they have the greatest gambling losses per head of any country in the world. 40 per cent higher losses than the nation. The come second. If America's blind spot is guns, ours literally is gambling, and it's seen essentially in Crown, the size of Crown and how it got to that.

RUBY:

Hmm. And how confident are you that this is a moment in time in which some of this will change because it sounds like you would have hoped the recommendations from the Finkelstein report would have gone further. And I also wonder if you think that there needs to be more action taken as well from the Victorian government. Do you think that this is a missed opportunity?

TIM:

Look, I think there's a chance this can work. However, my fear really is Ruby that if you look at the banking commission, just as Haynes did a fantastic set of recommendations already, so many of them a few years on have been weakened. This is what happens to Royal Commission recommendations.

I'm still troubled when you ask about the government. Though they said way we accept all 33 recommendations. They've only legislated nine 33 and I fear that they might start to weasel aways with time we forget. Crown remains very powerful. So dominant.

You know, the complex, down there on SouthBank is the biggest public building in Australia, twice the size of the second biggest, which is our federal parliament. It does say something about our values, gambling and democracy and that power, I still have fears may start to find wriggle room despite these recommendations.

RUBY:

Tim, thank you so much for your time.

TIM:

That's a pleasure.

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RUBY:

Also in the news today,

The federal government has flagged that its not expecting children between the age of 5 and 11 to receive a Covid-19 vaccine before the end of the year.

The Federal health minister Greg Hunt said on Monday that Pfizer was yet to submit all its paperwork and that the ‘critical thing is a full and thorough assessment”.

And, in the US - police are now investigating Astroworld Festival in Texas after at least eight people were killed and hundreds injured in a surging crowd while rapper Travis Scott was performing on stage.

One question authorities will investigate is whether the show could have been stopped sooner, after it allegedly continued for close to 40 minutes after the mass casualty event.

I’m Ruby Jones. This is 7am. See you tomorrow.