The Crown Resorts Ltd (ASX: CWN) share price is sliding lower today. This comes as counsel assisting the Victorian Royal Commission into the suitably of Crown Melbourne's casino license argues Australia's largest gaming operator is not fit to hold its gambling licence in the state.
At the time of writing, Crown shares are trading at $10.48 – down 2.42%. By comparison, the S&P/ASX 200 Index (ASX: XJO) is only 0.68% lower.
Today's closing arguments by Adrian Finanzio SC are the culmination of months of caustic evidence presented against the company. This includes potential money laundering as well as credit card fraud, tax evasion, and endangering the well-being of problem gamblers.
The royal commission in Victoria was itself sparked when the New South Wales Independent Liquor and Gaming Authority found Crown Resorts unsuitable to hold a gaming licence in the state back in February.
Let's take a closer look at today's news.
"…Crown Melbourne is not fit to hold a licence now."
Mr Finanzio not only slammed the company, its culture and leadership but at one point questioned whether it was even possible for Crown to reform. His arguments were even more damning than those presented in the NSW Bergin inquiry.
Investors appear unimpressed, sending the Crown share price lower on Tuesday.
Particular scorn was reserved for chair Helen Coonan and Crown Melbourne CEO Xavier Walsh.
"[Walsh], along with Ms Coonan, cannot be the critical face of the change required at Crown, if it is to remain the licensee," counsel assisting said.
"If Crown is to retain its licence, it would be open to the Commissioner to make a finding that Ms Coonan is not a suitable associate of Crown Melbourne."
He added on Mr Walsh:
In the time since he's been thrust into positions of greater authority he has, with respect, not risen to the occasion in a way which can give any confidence that he has the necessary qualities to be a suitable associate of Crown.
The royal commission was meant to hand its findings to the Victorian Government on 11 August but this was pushed to October on the recommendation of Commissioner Raymond Finklestein.
At the time, the Acting Premier, James Merlino, said the extension was necessary due to the "seriousness of evidence produced through hearings and submissions to date".
The Victorian Government has previously indicated it will follow all the recommendations made to it by the royal commission.
Given today's closing arguments, it now appears genuinely possible Crown may be stripped of its Victorian license. Investors look to be concerned over this eventuating, thus selling down their Crown shares.
Crown share price snapshot
Over the past 12 months, the Crown share price has increased by around 17%. Twelve months ago, the company was still recovering from the first COVID lockdowns, during which it was severely impacted financially.
Crown is not only facing multiple investigations by authorities, it is also the subject of multiple takeover bids – including one by competitor Star Entertainment Group Ltd (ASX: SGR).
Crown Resorts has a market capitalisation of around $7.1 billion.
