After surviving being shot, the boyish Williams found his inner killer, although he preferred others to pull the trigger. He was bent on revenge and aimed to wipe out the entire Moran family. He hired Andrew Veniamin, a volatile young man with a penchant for guns, as his assassin. Veniamin had a ‘Jekyll and Hyde’ mentality and seldom considered the repercussions when his anger boiled over. Not surprisingly, shots rang out around Melbourne’s suburbs, as payback and pre-emptive murders cleansed the city of many of its most dangerous criminals.

  As he built his own lucrative drug empire, Williams had been financially backed by the biggest of the drug kingpins, Tony Mokbel. The two formed an alliance. Mokbel, the son of Lebanese immigrants, acted as banker to Williams and hid the young up-and-comer’s wealth among his legitimate businesses, all of which had been created from drug money. He also allegedly took a cut of all drugs sold by Williams.25 Mokbel was so cocky he named one of his companies – a fashion label – LSD (supposedly for ‘love, style and design’).

  Mokbel was a compulsive gambler and a regular face in the Mahogany Room.26 It was a thrilling pastime for the gangster, who’d dragged himself up from the grind of walking his mother to her job at the meatworks every morning at 4.30 am. Despite widespread allegations in the press about the criminal activities of Mokbel and others, Crown kept its door open to them. There is no evidence that the company took any action to have these characters excluded from the premises – until Commissioner Nixon took decisive action. Mokbel was later charged and jailed for drug offences, but, at the time of writing, he’s been released and is seeking to have his convictions overturned on the basis that flawed evidence was given at his trial.

  In mid-2001 the Australian Crime Commission, along with specialist sections of Victoria Police, had begun surveillance operations against suspected organised crime figures frequenting Crown. When Commissioner Nixon claimed, just before issuing the bans on Williams and Gatto, that criminals were laundering money at Crown, it sparked an angry denial from Crown’s management, which cited a lack of evidence. A standoff followed, but Nixon upped the ante by claiming that the evidence showed that money laundering was occurring at Crown.27

  Nixon promised more resources to the police to aid them in tackling the problem, but no action followed. Such was the power Crown now exerted on both sides of politics that, according to Tim Costello, ‘no amount of stories about gangsters and crime could touch Crown. There was never any political will to investigate the crime going on.’28 Consequently, Crown maintained its reputation as ‘one of Australia’s least policed and regulated casinos’.29

  Criminals took full advantage. Mario Condello was one who exploited Crown’s welcoming culture towards suspected criminals. He was a drug trafficker, loan shark and money launderer with close links to the Honoured Society, a confederation of mafia groups in Australia, and to Melbourne’s underworld figures. Vain and manipulative and a fan of the television series The Sopranos, Condello saw it as his mission to launder money for the mafia.30

  Even though he had no legitimate source of income, Condello was welcomed into Crown’s Mahogany Room. With only 300 members, this catered for gamblers who collectively gambled hundreds of millions every year. In September 2004 Victoria Police banned Condello from Crown after he was arrested for plotting to kill Carl Williams.

  Following Condello’s arrest, Crown was asked why its vetting process had not excluded such a dangerous character; a spokesperson said it was the job of the police to inform them about criminal suspects.31 This reply was entirely self-serving, of course, but does raise the possibility that police chose not to inform Crown of Condello’s background.

  Condello became another victim of Melbourne’s vicious gangland wars when, two years after his arrest, and just hours before he was due to appear at the Victorian Supreme Court for his trial, he was gunned down in his driveway. The screams of his wife rang out around the neighbourhood. His lawyer, Robert Richter QC, had to inform the court: ‘Unfortunately, I announce my client won’t be answering bail, he was murdered last night. He died confident of his acquittal.’32

  Thus, nothing happened to dissuade Crown from its tolerance of money launderers. It was too easy for the company to get away with embracing international drug criminals who spent big at its casino tables.

  The reason Crown could get away with this was the gaping holes in Australia’s anti-money-laundering and counter-terrorism financing regimes. AUSTRAC was not effective in preventing money laundering outside the banking sector. It did not routinely collect data on the real estate, gambling, luxury goods or other cash-intensive industries. Transparency International Australia noted that Australia’s doors were ‘wide open’.33 Crown took full advantage, yet the company faced no consequences.

  Exploiting the vulnerable

  Turning a blind eye to drug dealers had been a lucrative but risky part of Crown’s business model. Similar risks applied to Crown’s failure to ask questions of gambling addicts who brought stolen funds into the casino. Crown’s Code of Conduct was supposed to minimise harm to gamblers and, thus, to society in general. However, it was predictable that the company’s light-touch approach would fall short. In truth, gambling addicts were also part of the company’s business model.

  In 2004 The Age collated the cases of nine people who, in recent years, had been convicted for stealing large amounts from their employers to feed their gambling habits at Crown Casino.34 One of the most prominent was Frank De Stefano, an accountant and former Geelong mayor, who stole $8.6 million of his clients’ funds and became a regular at Crown’s Mahogany Room. He was jailed in 2003 for a minimum of seven years.

  Crown was happy to let big-time gamblers lose large amounts of other people’s money without asking any questions about its origins. But these were only the cases that made it to court. A 2002 survey of fraud by consulting firm KPMG found that a rise in white-collar crime was being driven by increased access to gambling.35 Compounding these people’s addictions were the incentives Crown gave them through loyalty programs of bronze, silver and gold membership.

  The fact that all but one of the people in the above cases were jailed for stealing showed that, in the eyes of the law, a pathological gambling habit was not a defence against criminal liability for theft. The worlds of law and psychiatry were at odds on this issue.

  The Diagnostic and Statistical Manual of Mental Disorders (DSM) published by the American Psychiatric Association had first included ‘pathological gambling’ as a psychiatric disorder in 1980. The DSM, which functions as the most authoritative guide to mental disorders, maintained that a ‘gambling disorder’ was a maladaptive addiction disorder. In other words, it was arguably a mitigating factor in cases of gambling-related stealing.36

  Australian courts, asked to adjudicate on such cases, saw things differently. In a series of judgements, justices found that moral culpability overruled any symptoms of personality disorder. They ruled that the acts of theft by so-called gambling addicts were sophisticated, devious and the result of extensive planning. In other words, offenders had a large degree of choice.37

  What constituted a gambling addiction came to the fore in 2006 in the case of 33-year-old Kate Jamieson, an employee of Bendigo Bank. Over a three-year period, she embezzled $3.5 million, nearly all of which finished as profits for Crown Casino. In summing up her predicament, Judge Roland Williams was scathing of Crown’s culture. He found that even though her gambling habit had barely begun, she was met with inducements from Crown management to keep gambling. She became a VIP member, and that was where ‘the snowballing really began’. Jamieson was seduced by this enticing lifestyle, as Williams described:

  You were waited on, you were supplied with free meals, with free drinks, with entre with friends if you wanted it to the Mahogany Room, free car and limo supply, tickets to sporting events … with free extras so you could take friends … All the while of course you were gambling more and more, losing more and more.38

  Nonetheless, the judge jailed Jamieson for seven years.

  What of Crown’s Code of Conduct? It turned out not to be worth the paper it was written on, because, unlike in Singapore and other jurisdictions, Crown’s management didn’t take it upon themselves, and were not legally required, to assess a person’s capacity to gamble or where they might have obtained their funds.

  The Bendigo and Adelaide Bank believed Crown should have been held responsible for the money Jamieson stole. It began legal action against Crown to return the stolen funds. The bank argued that Crown must have known the money was stolen, because Jamieson could not possibly have afforded to spend as much as she did. Some days she lost more than $20 000.

  The bank argued that the casino ‘wilfully and recklessly failed to make such inquiries as an honest and reasonable person would make as to the source of the funds wagered or bet by Jamieson at the casino’. However, after pursuing the case for six years, the bank judged that it had little chance of victory and walked away.39 Legal attrition is its own form of power.

  In 2008, and in another example of favouritism to Crown, it was exempt from all of the Victorian government’s newly announced problem-gambling measures. ‘In Victoria we have got so used to Crown getting whatever it wants,’ Tim Costello lamented.

  Crown has always been a protected species. The reason is its political power and its financial power. Right back in the early days when Ron Walker and Lloyd Williams, friends of Jeff Kennett, won the licence, now of course owned by Packer, there has been a special status which is only explained in terms of both money and political power.40

  Crown Casino in the dock

  One gambling addict pushed back against Crown’s practice of luring and retaining gamblers with inducements. Harry Kakavas, a Gold Coast property tycoon, is rated as one of the modern world’s biggest gambling losers, having blown more than $30 million in an extravaganza of gambling at Crown between June 2005 and August 2006. Kakavas had been diagnosed as a pathological gambler with an impulse-control disorder.41 When he sued Crown for $35 million, alleging that the casino had wilfully exploited his gambling addiction, his case raised two parallel questions. Can casinos be legally held to their own codes of conduct? And is it even ethical for them to offer inducements for people to gamble? The corporate gambling business model was on trial.

  Kakavas’s gambling habit began after he completed his university degree when he was working for a real estate firm next to Melbourne’s Rialto Tower, which had a sports betting facility. He started by placing small bets and soon learned that he loved the punting lifestyle. Graduating to Crown Casino, he became infatuated with baccarat and was soon hooked.

  Trouble followed. In 1998 Kakavas committed a $286 000 fraud against his then employer, a finance company, to feed his growing addiction to the game. He served four months in jail. In an attempt to lessen his sentence, Crown’s management offered supportive evidence of Kakavas’s gambling addiction – principally, it seems, because he had a longstanding friendship with Crown employee John Williams, son of Crown founder Lloyd Williams.42 In the mid-1990s John Williams was a trainee blackjack dealer at Crown. He and Kakavas played pool together at a strip club, the Men’s Gallery.43 By 1999 Williams was made executive general manager of international gaming.

  So it was clear Crown knew about Kakavas’s problem. Management also knew that, following his stint in prison, Kakavas had self-excluded from all Australian casinos from the late 1990s until 2005. During that time, he relocated to the Gold Coast and found his calling as a property developer, amassing a fortune. Alongside his talent for salesmanship, Kakavas was a complex character. Journalist Paul Barry interviewed him several times and described Harry as ‘brash, confident and loquacious’ but also ‘volatile, angry and even scary’.44

  Kakavas later admitted that at times he was desperate to be allowed back into Crown. On the surface, at least, he appeared to be able to stop his gambling habit. But he had occasional gambling sprees in Las Vegas and, according to Sydney Morning Herald journalist Heath Aston, it was on one of these jaunts in 2004 that he was spotted by Kerry Packer. Aston claims that the gambling and media magnate immediately rang John Williams to ask why Kakavas wasn’t losing his money in Melbourne instead.45 Williams’ bonuses were partly based on attracting high rollers to Crown and keeping them there. Following the call from Packer, Williams emailed colleagues telling them that Kakavas had just ‘dropped’ three or four million in Vegas and asked what needed to be done to get him back.46 It looked like Crown was salivating at the prospect of Kakavas’s return.

  Crown’s management swung into action – although in later court proceedings it denied that it had devised any strategy to lure Kakavas back to its venue. A Crown employee flew up to the Gold Coast with a letter for Kakavas to sign – it stated that he no longer had a gambling addiction.47 And Williams tendered an email to the later court proceedings in which he had written: ‘I’ve now got Harry to agree to conditions that … won’t come back to bite Crown.’48

  For his part, Kakavas allegedly appeared keen to negotiate a deal to get back to Crown’s baccarat tables. To smooth the path, he was offered a slew of lucrative inducements by Crown management to do so: free accommodation, meals and tickets to sporting events. He was even flown to the Philippines on Crown’s Lear jet to ‘refresh’. Kakavas alleged that he was also offered cash grants to kick-start his gambling at Crown, said to total $500 000 in various instalments. Labelled ‘lucky money’, Crown’s inducements to Kakavas are said to have amounted to $10 million, and, as Paul Barry put it, ‘they worked a treat’.49

  Having drained his accounts and facing a pile of debts, Kakavas took his case to the Victorian Supreme Court in 2009, where he found Justice David Harper unsympathetic to his plight. Harper dismissed outright the claim that clubs and casinos had any responsibility to protect gamblers from themselves, because there was no legislative requirement for them to do so. Harper seemed unable to understand the nature of addiction itself. He thought Kakavas should have just said no to gambling and behaved with discipline and vigilance – a view questioned by Paul Barry in his critical assessment of the case. ‘[T]his is precisely what a gambling addict is incapable of doing,’ he pointed out.50

  Kakavas was granted an appeal in the High Court in 2013, where he was represented by top Melbourne silk Allan Myers QC. Myers argued that Crown, by allowing Kakavas to gamble, had ‘exploited his inability, by reason of his pathological urge to gamble, to make worthwhile decisions in his own interests while actually engaged in gambling’. He highlighted that Crown trumpeted its commitment to protect problem gamblers. Myers thought the evidence was so compelling that he had the judgement in the bag.51

  But Chief Justice Robert French thought differently. Rejecting the gambling addiction defence, he held that Kakavas’s gambling problem did not put him at any ‘special disadvantage’ of exploitation by Crown, agreeing with the Victorian court that ‘Crown was entitled to accept the appellant as he presented himself to it: a successful businessman entirely capable of making decisions in his own interests … including deciding from time to time to refrain from gambling altogether. Crown did not knowingly victimise the appellant by allowing him to gamble at its casino.’52

  Crucial to French’s decision was his identification of Kakavas as a high roller. By definition, French argued, such people had an abnormal interest in gambling, making it impossible for casino management to determine who was a pathological high roller and who was not. However, in Kakavas’s case, the evidence showed clearly that Crown knew about his gambling addiction.

  Community opinion on the decision was sharply divided. Barrister Ian Freckelton QC, who had expertise in the intersection between law and psychiatry, supported the High Court’s decision, arguing that Kakavas did not have a strong case: it was far from clear that he was a gambling addict without the capacity to make reasoned decisions about his gambling.53 Online newspaper Crikey claimed that the High Court had endorsed misconduct by the ‘top end of town’. It questioned whether Crown was fit to retain its licence as a casino operator.54

  Gambling reformer Tim Costello, calling on his own legal background, believes that had the case been taken to the High Court after the 2022 Finkelstein Inquiry into Crown Casino, set up in the wake of a Four Corners investigation into money laundering, Kakavas might well have won his case because of the direct link between his experience and Crown’s appalling record of exploiting problem gamblers. ‘Kakavas was pointing to things that were later established in the Royal Commission,’ he observes.55

  Whatever the merits of the Kakavas case, in striking it down the High Court handed casinos a green light to treat gamblers as they wish, however heavy the burden on those who are addicted.

  The scandals that enveloped Crown in the first decade after its opening highlighted the extent of state capture by the company. During these years, the Victorian Casino and Gaming Authority (VCGA), the state’s gambling watchdog, gave the company a clean bill of health, describing its approach to problem gamblers as ‘among the best in the world’.56

  How could Crown’s inner workings be penetrated? In 1999 Tim Costello had a whistleblower from the watchdog contact him to detail the extent of the influence government had over its operations. In typical fashion, Costello went public. He said the VCGA was ‘craven to the Premier’ and had been ‘probably the weakest statutory authority, the most politically captured body in the past 20 years’.57

  His stance ushered in a world of legal pain for Costello. The VCGA slapped a libel suit on him and hired top silks to take the case. Costello feared losing his house. The matter only ended when Labor leader Steve Bracks replaced Jeff Kennett as premier after the 1999 state election and Bracks instructed the VCGA to drop the case.58

  In 2009 a further testament to Crown’s influence on government was made public. As the various scandals facing the company wound their way through the court system, Crown was awarded a big expansion in the number of gambling tables it could operate – from 350 to 500 tables. James Packer was involved in the expansion negotiations with John Brumby’s Victorian Labor government. Some of the new tables housed fully automatic games that normally would be classified as poker machines. But the government labelled these as table games because Crown wasn’t allowed any more poker machines.59