A West Australian probe into whether Crown should be allowed to continue operating its Perth casino will search for evidence of law-breaking and take months to complete.
WA's Gaming and Wagering Commission has formally recommended an inquiry into Crown Perth following a NSW report into the company's operations.
The state solicitor will prepare terms of reference for the investigation, which will have the powers of a royal commission.
In a report to the NSW gaming authority, Independent Commissioner Patricia Bergin found Crown was not suitable to hold the licence for a Sydney casino because it facilitated money laundering through bank accounts held by subsidiaries.
Serious concerns were raised about the company's Perth and Melbourne operations.
A retired Supreme Court judge and a senior former public servant have been approached to lead the WA inquiry.
Premier Mark McGowan on Wednesday said it would take about four months to complete but it was yet to be determined how much it would cost.
"It's important that we get to the bottom of all of these issues, whether there are any West Australian-specific issues and what should be done in terms of making sure there's no illegality and no unlawfulness at our casino," he told reporters.
"Crown will continue to operate because if we take the licence away, 5500 people lose their jobs overnight. And we're not going to do that."
Racing and Gaming Minister Paul Papalia said the inquiry would be established as soon as possible.
"The McGowan government takes these issues extremely seriously and will ensure the independent inquiry has the full powers it requires," he said.
"We also support the commission's decision to issue directions to prohibit junkets at Crown Perth."
The GWC said it had contacted NSW and Victorian regulators about a working group to ensure best practice across the three jurisdictions and to engage with federal agencies responsible for policing alleged money laundering.
"The GWC acknowledges the seriousness of the findings and has been working co-operatively with the Bergin Inquiry since it came to light," the WA regulator said.
In a statement on Wednesday, Crown executive chairman Helen Coonan said the company would fully co-operate with the WA inquiry.
"Crown is determined to play a constructive role with all of its regulators as it works to restore public and regulatory confidence in its operations," she said.
Department of Local Government, Sport and Cultural Industries deputy director-general Michael Connolly last week stood aside from his role as WA's chief casino officer amid questions about his friendships with Crown staff.
Mr Connolly took Crown employees, who were not senior managers or executives, fishing on his trailer boat in a social setting.
The department's director-general Duncan Ord on Monday said Mr Connolly had fully declared any potential or perceived conflict of interest arising from the friendships.