Can Crown survive abusing the government it bought? Yes

Crown was meant to confine its abuses to ordinary citizens. Instead it has treated the Victorian government with the same contempt.

Has Crown found a way, finally, to offend even the politicians it has spent so much money purchasing the acquiescence of in recent years?

Crown has traversed a path familiar to watchers of industries where user-friendly, pro-corporate regulation bought by political influence and large donations has resulted in abuses so extraordinary that politicians have been forced to reregulate them.

The big banks, energy companies and the aged care sector have ended up facing royal commissions or dramatic reregulation after their systematic abuses of lax regulatory frameworks came back to bite them. Then it was Crown’s turn as it faced a major inquiry in NSW — the one state where it had failed to butter up politicians with donations — followed by a Victorian royal commission.

Far from being the superfluous sequel to the NSW show many of us expected, the Victorian royal commission has unearthed a scandal worthy of displaying along with the money laundering, organised crime links, poor governance and failure of Chinese staff that have already been paraded by the NSW inquiry and Austrac.

The company may have underpaid the Victorian government by more than a quarter of a billion dollars by adding in the costs of freebies to gamblers to its gambling losses — without checking that the gambling regulator was happy with the formula. That attitude is unsurprising given that Victorian governments of both flavours have ensured that Crown faced minimal threat from the entirely toothless Victorian Commission for Gambling and Liquor Regulation.

But traditionally the abuses perpetrated by large, well-connected and generous corporate donors to political parties have been reserved for ordinary Australians: customers ripped off by banks; dead clients charged fees by super funds; households overcharged for power; seniors abused and neglected in aged care facilities.

When it comes to handing tax to governments, if anything, the big banks and energy companies tend to pay full freight compared with other large corporations, given their main assets and customer base are in Australia and they function more like utilities.

Crown is the first to extend its abuse of its power to governments — and where it hurts.

Crown also differs from the big banks, energy companies and aged care providers in that it is not a pseudo-utility. Finance, energy and care for seniors who are no longer independent are all essential services in a modern economy. Part of the power wielded by companies in those sectors springs from the fact that either they are too big to fail or the consequences of their failure would be disruptive and embarrassing — particularly in regional areas where there is less competition and the closure of, say, an aged care facility would mean locals had nowhere to turn.

Crown, on the other hand — well who would miss it vanishing, apart from gambling addicts and the few high rollers who might be able to fly into Australia?

Well, as The Australian’s John Durie notes, in fact about 11,600 people would — namely those employed by the company in Melbourne. Durie suggests there’s no way the Victorian government — which not merely enjoys a lucrative flow of tax revenue from Crown, albeit lower than it should, but which is politically joined at the hip with the company — will allow Crown to shut its doors in Melbourne.

There’s hope for Crown under chair Helen Coonan, however. Since the NSW inquiry humiliated most of the board and forced the departure of a slew of executives and directors, the company has been working hard to look like it has turned over a new leaf on corporate governance and compliance with regulation.

That’s what the big banks did after being exposed and humiliated by the banking royal commission. And look at them now. A couple of years on, and the government is furiously reversing its post-royal commission regulation of the sector. The Hayne era was only brief before business as usual resumed. NAB even started making political donations again as the banks resumed their role as the biggest donors to political parties.

If Coonan and Crown can just hang on, things may be different indeed a couple of years down the track.

What do you think about Crown? Let us know by writing to letters@crikey.com.au. Don’t forget to include your full name if you’d like to considered for publication.