Crown Resorts’ plans to open the doors to its new $2.2 billion casino in Sydney next month have been crushed, after the NSW gaming regulator found it would pose “unacceptable risks”.

The NSW Independent Liquor and Gaming Authority decided on Wednesday to withhold regulatory approval for gaming at the facility until an extraordinary probity inquiry into Crown’s fitness to run the casino finishes in February 2021.

Crown suspended trading in its shares ahead of the announcement.

ILGA chair Philip Crawford told a press conference that the ILGA was greatly concerned Crown had potentially enabled drug trafficking and financing of terrorism by allowing money to be laundered through its accounts.

“When we talk about money laundering, what does that really mean? It basically means proceeds of crime,” he said.

In a bombshell admission on Wednesday, Crown admitted that dirty cash had likely been laundered through two of its accounts, offering up two expert reports with that finding to the inquiry.

Inquiry commissioner Patricia Bergin was critical of Crown’s service of those reports on the inquiry at 11pm on Tuesday without notice.

Mr Crawford said in his press conference the late service showed the board was not “picking up the vibe” of the inquiry.

Crown had planned to open the flagship Barangaroo facility next month, but the future of the casino hangs in the balance as a long-running ILGA inquiry continues to hear damning arguments and evidence about Crown’s fitness to run the new venue.

Ms Bergin will make recommendations in February about whether Crown is suitable to run the casino.

Crown’s barrister Robert Craig SC admitted in closing submissions that it was more likely than not that two of the company’s bank accounts had been used for money laundering.

The Riverbank and Southbank accounts have been a key focus of the inquiry after media reports alleged they were used to launder dirty cash.

Banks repeatedly closed the accounts because of money laundering fears, but those fears were not escalated to the board.

Crown also admitted to shortcomings and mistakes in its anti-money laundering processes, but vowed it was cleaning up its act with a series of reforms, only some of which have come before its board.

Mr Craig advised Ms Bergin not to get “bogged down” in the question of whether money laundering actually occurred, saying it was a distraction from the “fundamental point” that large cash transactions should be deterred because they give rise to serious risks, and that Crown’s new policies were directed to those risks.

Ms Bergin replied that the inquiry’s terms of references demanded she consider whether money laundering happened.

Earlier on Wednesday, Crown counsel Neil Young QC denied that billionaire James Packer was a de facto director of Crown once he left the board.

“He was receiving some information and expressing some views, but that is a long way short of making actual operative decisions,” Mr Young said.

Mr Young argued that Crown could not be blamed for any flaws with an agreement by Mr Packer’s privacy company to sell 19.99 per cent of its shares to Hong Kong firm Melco Resorts in May 2019.

The company did not know about the transaction and had no power to stop it, he said.

He vowed the relationship between Crown and its major shareholder, Mr Packer’s private vehicle, would be “stock standard” from now on, influencing the company only through its appointed directors.

Crown on Tuesday announced it would stop dealing with all junket operators, subject to consultation with gaming regulators in Victoria, Western Australia and NSW.

Counsel assisting the inquiry has recommended findings that Crown and Mr Packer are not presently fit to be associated with the new casino.

The inquiry continues.