Source : THE AGE NEWS
Casino operator Crown is suing a multinational insurance giant for allegedly refusing to make good on a policy the company needs to help fund a $72 million class action settlement tied to the scandals it has encountered in recent years.
The dispute relates to a deal Crown struck last year to settle a class action lawsuit that Maurice Blackburn had filed in 2020 to compensate shareholders after the company’s share price was battered by state-based governance inquiries and money laundering allegations.
Those inquiries were triggered by reporting in this masthead, including allegations of VIP Asian junket operators linked to the casino facilitating money laundering, with cash proceeds from organised crime allegedly brought into its Melbourne resort en masse.
Crown’s share price suffered a significant decline after the anti-money laundering regulator AUSTRAC announced it was investigating the business in October 2020. The shareholder-led class action lodged two months later sought damages as a result of Crown’s alleged failure to inform the market about its anti-money laundering compliance shortcomings.
The class action was resolved in 2025, when Crown agreed to settle it for $72.5 million without making any admissions of wrongdoing. Crown, which operates its flagship casino in Melbourne as well as locations in Sydney and Perth, is no longer on the ASX, after American private equity firm Blackstone bought it for about $8.9 billion in 2022.
Crown had multiple layers of directors and officers insurance, which covers against lawsuits brought by shareholders as well as protecting board members and executives from personal financial loss.
In the lead up to the class action settlement, Crown effectively maxed out its primary level, with insurer AIG paying out $7.5 million.
However, Crown had organised multiple layers of additional insurance policies designed to give it a higher level of coverage.
Riverstone International held 50 per cent of the risk on the fourth and fifth level excess policies, but has refused to pay Crown.
In documents filed in the Supreme Court of Victoria, Crown has claimed that Riverstone, along with other insurers, told the casino company to act as though it was “uninsured” during discussions to settle the class action. It is not clear why Riverstone issued that instruction, and it is yet to lodge its defence in the case.
As part of the fresh legal action against Riverstone, Crown is seeking the payout on its excess policies, plus interest.
The exact amount that Crown believes Riverstone owes was not disclosed in the documents. Riverstone declined to comment. Crown did not respond to requests for comment.
Crown’s conflict comes at a time of tumult for Australia’s casino operators, with a focus on its rival Star Entertainment’s governance, leadership and cultural issues.
Last week, the New South Wales and Queensland extended a suspension of Star’s license to operate its Sydney casino for a further nine months, with a manager appointed to allow for external oversight and continued trading.
Also last week, the Queensland government announced that it would defer an impending 90-day suspension of The Star’s licence to operate its Gold Coast casino. The suspension was set to take effect from September 30, but the six-month deferral gives the operator more time to demonstrate its remediation efforts.
Those developments followed reporting from this masthead last month that a leaked recording of Star Entertainment Group’s most senior executives had captured top staff complaining of the risk and compliance measures forced on the scandal-ridden firm by regulators as it attempts to retain its licence in NSW and Queensland.
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Elias Visontay is a National Consumer Affairs Reporter at The Sydney Morning Herald and The Age.Connect via email.
