Australian casino mogul James Packer and his 11-man Crown Casino board have received unsatisfactory ratings for risk management capacity and corporate governance.
Federal government-owned Australian Superannuation Corporation has published the Regnan report after Chinese gambling regulators have reprimanded 18 Crown Casino employees. The Crown Casino arrests were initiated after reports that its VIP marketing team is soliciting Chinese high rollers to gamble abroad. Enticing Chinese high rollers to play abroad are prohibited by the Chinese government.
Regnan Report Points Out Areas for Improvement
News Corp Australia says that the confidential Regnan report has cited that Crown Casinos needs to augment their risk management and corporate governance. The report has indicated areas for improvement after the Regnan report gave it poor ratings which saw 2 out of 5 for the quality of the popular casino’s board members.
An excerpt from the Regnan reports, says: “Regnan maintains concerns over the absence of a lead independent director, lack of specific industry skills among independent directors and over commitment issues for some directors which could reduce director capacity to effectively discharge their duties.”
The report also pointed out that Crown’s board lacks operational experience in gaming and in Asia. This supports Crown’s annual report, which showed that only three of its 11 directors had any experience in executive management or risk management.
Crown’s Commission-Base System Scrutinized
The Regnan report has also mentioned that the Crown China arrests have look into the commission-based system of the casino. It is has been found out that it has operated illegally in order to entice lucrative high rollers to gamble abroad for employees to receive commission.
“Following the arrests, a database of Crown’s customers was submitted to the police. A reduction in the number of VIP high-rollers from mainland China could impact Crown’s earnings,” the report said.