New Crown CEO grilled at royal commission

Crown Resorts’ new chief executive officer, Steve McCann, was almost reduced to tears during the Victorian royal commission hearings on July 6, waving off the need for a break, but forced to take one by Commissioner Ray Finkelstein.

The Australian Financial Review reports that McCann had been on the stand for more than two hours and counsel assisting the royal commission, Meg O’Sullivan, had shown him no mercy.

O’Sullivan gave Steve McCann, just five weeks into the job, the third degree about what he knew about gaming regulation and what the Sydney-based, long-time former chief executive of Lendlease could do to overhaul Crown’s culture.

McCann said: “I’m working about 100 hours a week at the moment” and “reading a massive volume of materials” and have “educated myself as well as I could in those five weeks”.

He appeared emotional at various points in his evidence but appeared to stop mid answer and eb on the verge of tears as he discussed how he could turn Crown’s culture around.

He could still be recalled after chairman Helen Coonan gives evidence in coming days.

Combine Crown’s bad week with Victorian Premier Daniel Andrews talking tough that “the prospect of Crown losing its licence is very, very real” and their troubles appear to be growing by the day.

McCann’s evidence started badly with a protracted debate on whether he is technically Crown CEO at all.

He is still waiting for probity checks to be signed off by the regulator.

Problem gambling and potential tax underpayment prove problematic

It ended just as badly, as Commissioner Finkelstein said it was a “serious problem” Steve McCann was not based in Melbourne, amid the obligation under their licence to have a “Melbourne-run show”.

It was a strong sign of Finkelstein’s thinking that he may want greater separation between Crown Melbourne and their other casinos.

“I’ve committed to spend 50 per cent of my time in Melbourne. I’ll relocate to Melbourne if I have to,” the Melbourne-raised McCann offered.

McCann was then grilled about the details of what he knew about the Bergin report in NSW and other recent regulatory penalties.

“I would struggle to disagree with much in the Bergin report,” he said.

Perhaps the most damning was what he knew about a potential $270 million tax rort, which McCann only learnt about from media reports a week into the job.

The new CEO was then grilled on his letter to Victoria’s Department of Treasury and Finance, estimating the tax liability was about $8 million.

How did that stack up with other tax advice from MinterEllison, Neil Young, QC, and also Alan Archibald, QC, received only on July 5, suggesting the amount was many millions more.

“Do you think this was an honest letter to write?” Finkelstein asked.

“Based on the earlier advice this amount was completely wrong.”

“I was being honest when I wrote the letter,” McCann said.

He added they would be paying the higher amount of two different tax estimates.

Finkelstein finished by asking McCann how he would solve an inexorable problem.

“If you send away problem gamblers, aren’t you losing money and isn’t that just an inherent conflict you will never be able to solve?”

McCann, described by some as the “perfect choice” when he was appointed, given his record as a cleanskin, finished stronger, arguing unless Crown was aligned to better behaviour, they would ultimately lose their social licence or real licence and “go out of business”.