Casino operator makes progress
In February this year, a New South Wales (NSW) inquiry deemed Crown Resorts unfit to hold a Sydney casino license. The judgment, which focused mainly on evidence of money laundering, has prevented James Packer’s company from opening the gaming floor on its AU$2.2bn (US$1.7bn) Barangaroo casino project.
now attempting to regain the trust of the region’s regulator
Crown is now attempting to regain the trust of the region’s regulator and earn its Sydney license once more. According to a Thursday announcement by the NSW Independent Liquor and Gaming Authority (ILGA), Crown has reportedly agreed to end junket operations and introduce cashless gaming at its casinos to counter those money laundering issues.
Additionally, the ILGA confirmed it has reached an agreement with Consolidated Press Holdings “to address issues around its influence and control over the management of Crown.” The private investment group, owned by Packer, currently holds 37% of Crown shares. Along with its billionaire owner, the firm took a considerable amount of the blame in the ILGA’s ruling.
Details of the agreement
The NSW inquiry’s report, otherwise known as the Bergin report, resulted from a year-long investigation into Crown. In her final judgment, Commissioner Patricia Bergin noted evidence of money laundering at Crown’s Perth and Melbourne casinos through high roller programs. The report also linked the operator to junkets with ties to organized crime.
As reported by The Guardian, ILGA chairman Philip Crawford confirmed on Thursday that Crown had made progress in addressing these issues. In addition to ending junket operations and going cashless, Crown has already suspended its high roller programs. The casino operator has also agreed to pay AU$12.5m (US$9.6) towards the cost of the Bergin inquiry and begin contributing an annual supervisory levy of AU$5m (US$3.9m) for two years.
Despite reaching an agreement with Crown, Crawford has confirmed that the ILGA will not make a decision over Crown’s license until an independent body confirms structural changes have taken place.
Concerns prompt bidding war
The ILGA has not yet confirmed the details of its agreement with James Packer’s Consolidated Press Holdings. However, Bergin raised several concerns over its leadership of the company in her final report.
She described Packer as “deeply flawed” and found that his influence had “disastrous consequences for the company.” Partly, this centered around threatening behavior displayed by the business mogul – something he admitted to during a virtual inquiry hearing in October 2020.
Oaktree Capital Management offered to help buy back Packer’s shares for a total of AU$3bn (US$2.32bn)
Since Bergin’s ruling, Crown has received bids from multiple companies offering to buy out the billionaire’s shares. The Blackstone Group made a AU$8bn (US$6.2bn) bid to buy Crown outright in March this year, while private equity firm Oaktree Capital Management offered to help buy back Packer’s holdings in the company for a total of AU$3bn (US$2.32bn) last month.
Earlier in May, Australian casino company Star Entertainment proposed a merger, offering an implied potential value of AU$14 (US$11.02) per Crown share. The business said that the agreement would lead to annual company cost savings of AU$150m-$200m (US$115m-$154m).
Blackstone upped its own offer around the same time, raising its bid to AU$8.36bn (US$6.58bn), or AU$12.35 (US$9.72) per share.