News: CWN UPDATE 1-Australia's Crown Resorts 'not suitable' to hold gambling licence - report

(Recasts and updates throughout with details from report)

SYDNEY, Feb 9 (Reuters) - Australia's Crown Resorts Ltd (CWN) was not a "suitable person" to hold a gambling licence for its Sydney casino, a report commissioned by an industry regulator said on Monday, although it added the casino giant could become compliant if it made changes.

Crown was granted a gambling licence for a A$2.2 billion ($1.70 billion) casino tower in Sydney several years ago, but Independent Liquor and Gaming Authority (ILGA) suspended the licence pending a review prompted by media reports alleging company dealings with organised crime groups.

The report by retired judge Patricia Bergin stated "no" in response to a question about whether the company was determined to be "a suitable person" to hold a gambling licence.

However, Bergin added that Crown could engage in a process of "conversion to suitability" that would require a restructure of its board.

"If Crown is to survive this turmoil and convert itself into a company that can be regarded as a suitable person ... there is little doubt that it could achieve a fresh start and emerge a very much stronger and better organisation," Bergin wrote in the report.

Bergin recommended a 10% limit on casino shareholdings in the state without specific approval, a limit well below the 35.9% holding of Crown's largest shareholder, James Packer.

The New South Wales state ILGA began a review of the complex's gambling licence in 2019 following media articles about Crown's Melbourne casino that alleged the company knowingly did business with organised crime groups and turned a blind eye to money laundering.

Crown initially denied the reports in full-page newspaper advertisements. But company executives testifying at the ILGA inquiry acknowledged the possibility of money laundering taking place at the Melbourne casino.

The company has pegged its future growth to the 75-floor tower complex, which is Sydney's tallest and houses a hotel, retail shops, restaurants, bars and residential accommodation along with the planned casino. The company pressed ahead with a December grand opening of the tower, designed to impress tourists with sweeping harbour views although Australia's borders remain closed because of COVID-19.

($1 = 1.2943 Australian dollars)