Ticking another box
Blackstone Group is moving ever closer to taking over Crown Resorts after the Victoria and New South Wales (NSW) regulators deemed the private equity firm suitable for a casino license. It means that Blackstone can own and operate the Crown Sydney and Crown Melbourne casinos upon completion of the acquisition.
subject to a wide-ranging probity assessment
US-based Blackstone was subject to a wide-ranging probity assessment by NSW Independent Liquor & Gaming. According to the regulator’s chairperson Philip Crawford: “The probity assessment has also resulted in certain persons being approved to become “close associates” of Crown Sydney.”
As well as meeting the probity standards, Blackstone also demonstrated that it would fully implement the recommendations that came from the Bergin Inquiry. This is the inquiry that initially deemed Crown unfit for a Sydney casino license last year.
Last year, an independent investigation into Crown Resorts found the company unsuitable for a Sydney casino license due to links to organized crime and money laundering.
has still not opened its gaming floor
The commissioner of the inquiry, Patricia Bergin, outlined significant changes that Crown Resorts would have to make to its corporate governance structure and culture before it could regain a Sydney license. The AU$2.2bn (US$1.6bn) Crown Sydney casino resort has still not opened its gaming floor as a result of the complications. It has opened its restaurants and hotel, however.
Crown Melbourne also has curtailments as a result of failings, including mandated government supervision. The Victorian Gambling and Casino Control Commission has found Blackstone suitable to operate the casino, just a few weeks after issuing a record AU$80m (US$57m) fine to Crown. The financial penalty relates to the Melbourne venue’s money laundering failures and the breaking of Chinese currency control laws.
Getting the deal over the line
Blackstone is still waiting to hear from the Western Australian gaming regulator before the AU$8.9bn (US$6.4bn) Crown Resorts takeover can proceed. Once this happens and there is approval for the deal from the Federal Court, Blackstone will then take Crown private, meaning it will no longer have a listing on the Australian Stock Exchange. Crown Resorts shareholders have already given their approval to the transaction.
As part of the deal, Crown Resorts founder and billionaire James Packer will no longer serve as a shareholder. He is set to receive AU$3.26bn (US$2.3bn) in return for his 37% stake in the company.