SYDNEY, Nov 5 (Reuters) - An Australian regulatory inquiry raised the prospect on Thursday of cancelling the casino licence of gambling giant Crown Resorts Ltd over alleged corporate governance failures, casting a shadow over the company weeks before a $1.6 billion resort opening.

The lawyer conducting hearings into the allegations also called for restrictions on the influence of Crown's billionaire founder and 36% owner James Packer, including rethinking Packer's status as a registered associate and forcing him to sell down his stake.

Although the summing-up remarks by the lawyer, Adam Bell, are not binding, they show the inquiry contemplating the most damaging response possible for a company that has pegged its future to a 75-floor Sydney complex since a mass arrest of staff in China four years ago forced it to abandon its offshore ambitions.

As it nears the Sydney launch next month, a state gambling regulator is holding an inquiry into whether it should keep its licence since media reports accused Crown of dealing with tour operators with ties to organised crime, among other allegations.

If Crown could not work with the authorities to meet the criteria of a "suitable" casino licensee, "one option may be for the authority to suspend the licence, coupled with the conditions ... that if satisfied would bring suspension to an end", Bell told the inquiry.

"Another option ... is cancelling the licence," he added.

The hearings have scrutinised Packer's influence over the company, including claims he received frequent trading updates and gave directions despite holding no role at the company, and threatened business associates as he sought, unsuccessfully, to take the company private.

"You should recommend to the (casino) authority that it reconsider its approval of Mr Packer as a close associate of the licensee with regard to his conduct," Bell said.

Packer had, in hearings, cited mental illness as a reason for sending threatening emails to an unnamed business associate, but "there's been no medical evidence presented to this inquiry by Mr Packer to support a causal connection between his conduct... and bipolar disorder or any other medical condition", Bell added.

"The evidence presented to this inquiry demonstrates that Mr Packer's profound influence ... had an adverse impact on its good governance, and culture and accountability."

Bell suggested enforced limits on Packer's shareholding, voting rights, board influence and access to confidential company information.

The retired judge overseeing the inquiry gives formal recommendations by February. The hearing continues.

($1 = 1.3947 Australian dollars) (Reporting by Byron Kaye; Editing by Lincoln Feast and Raju Gopalakrishnan)