Australia has a long and sordid reputation for weak state-based and federal gambling regulators who let the big operators rip off punters.

The all-pervasive nature of the predatory industry is so great that $25 billion was lost to gambling in 2019, the most in per capita terms of any country in the world.

NSW has long been the most captured of all, having tolerated poker machines since 1956.

It was also the first jurisdiction to allow two casinos in the one city when James Packer somehow persuaded both Liberal and Labor in 2012-13 that his Crown Resorts should be allowed to build a dedicated $2 billion high-roller casino on Sydney’s Barangaroo peninsula.

On Wednesday, in stark contrast to all of this history, Adam Bell SC, counsel assisting the Bergin inquiry into Crown Sydney, recommended that Crown be stripped of its NSW licence due to massive governance failures related to money laundering, business partnerships with criminals, risky practices in China, and James Packer’s dominance of communications and personnel selection.

Counsel Assisting is clearly targeting Mr Packer but it was remarkable that he called for the whole of Crown to be banned from running its Sydney casino.

But will this actually come to pass?

The under-construction Crown Sydney skyscraper at Barangaroo. Photo: AAP

There is still a long way to go before Crown will be forced to sell and the recommendation may simply be an attempt by the commission to bring Crown to the table for some negotiated concessions, such as the complete departure of controlling shareholder Mr Packer.

If a forced divestment was required of the casino complex itself, the most obvious buyer would be crosstown rival Star Entertainment, which could then return to a monopoly over table gambling in Sydney, something that should never have been broken in the first place.

However, this outcome would raise the domino issue – namely that if Crown isn’t fit to hold a licence in Sydney, why should it be allowed to keep running its Perth and Melbourne casinos?

An alternative scenario would be a takeover of the whole company with Mr Packer selling his 37 per cent stake to the new owner.

And the most likely bidder for the whole company would be Crown’s second largest shareholder, the private equity outfit Blackstone, which bought a 10 per cent stake from Mr Packer last year, via his great friend Lawrence Ho.

The other alternative would be a negotiated outcome whereby Mr Packer agrees to sell down to a stake of less than 10 per cent and surrender his current status of effectively handpicking the entire board, whilst having three out of 10 directors formally representing his CPH outfit on the Crown Resorts board.

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Commissioner Patricia Bergin is still yet to make her formal recommendation to the NSW Independent Liquor and Gaming Authority, which has the power to cancel the licence.

But you would expect ILGA to turn to Gaming Minister Victor Dominello, who would then need to persuade the Cabinet and the NSW Parliament to go ahead with cancelling the licence, which was created by an act of Parliament.

That would be a lengthy process going well into next year and if Crown wanted to hang on, you can imagine it would be in the courts at every opportunity.

NSW Premier Gladys Berejiklian said she was seeking legal advice on the question of whether Crown Sydney can open its doors on December 14 as planned.

Crown has 60,000 retail shareholders and it would potentially be unfair on them if the NSW government ordered a fire sale of a never-opened casino when the owners of 63 per cent of the company have done nothing wrong.

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The solution here is a board, management and shareholder clean out to expunge the toxic influence of Mr Packer over Crown.

His threats of violence against private equity executive Ben Gray in 2015 were absolutely disgraceful and anyone capable of that should not be allowed unfettered control over three of Australia’s biggest casinos, where gamblers will lose more than $3 billion a year going forward.

The tough line by ILGA raises many issues for Victoria’s poodle-like regulator, the VCGLR, which has been a soft touch on Crown Melbourne for its entire 25-year history under both Liberal and Labor governments.

It’s a similar story with Crown Perth and the WA regulator, which has been largely silent as the revelations rolled out regularly ever since 19 Crown employees were arrested in China four years ago for illegally promoting gambling.

It was noteworthy that independent federal MP Andrew Wilkie, who produced some of the evidence via whistleblowers that led to the Bergin Inquiry, was on Wednesday calling for Crown’s Perth and Melbourne casinos to be suspended.

Such a move would be particularly tough, but there’s no doubt that Crown needs to sweep away all but one or two of its current directors, along with anyone from the management team who has been involved in the various scandals.

Stephen Mayne is an independent journalist, founder of Crikey.com, shareholder activist, Crown shareholder and local government councillor who can be reached at [email protected] or via Twitter @maynereport