Still a few chips to fall for Crown bid to pass

The fate of the $8.9 billion US private equity bid for troubled Crown Resorts now rests in the hands of WA regulators after the Victorian and NSW regulators approved the deal on Thursday.

The Victorian and NSW casino watchdogs both gave green-light to Blackstone’s offer (which is being made with a group of managed by the US giant).

The WA regulator (WA’s Gaming and Wagering Commission (GWC) will have to give a determination after the state government makes a decision (and releases) and the final report from the Royal Commission into Crown’s Perth Casino and its activities.

But there is also the ongoing court case launched by financial intelligence regulator AUSTRAC.

In early March, AUSTRAC, served Crown Perth and Crown Melbourne with an 863-page statement of claim after its own investigation.

The agency outlined 547 alleged breaches of Australia’s anti-money laundering and counter-terrorism financing laws.

The sums involved are more than $1 billion (one case involved $310 million) and the size of the AUSTRAC penalty could derail the deal if it is more than $750 million (that would allow Blackstone to withdraw, though not force it to).

Crown told the ASX on Thursday it had received approval from the New South Wales Independent Gaming and Liquor Authority (ILGA), Crown shareholders have approved the Blackstone offer.

The Victorian Gambling and Casino Control Commission (VGCCC) has approved the Blackstone Group as a suitable associate of Melbourne’s casino operator and its takeover of Crown as a major change in the state of the casino operator’s affairs, following “comprehensive probity investigations” into the group and its affiliates.

The determination comes with several conditions that have all been agreed upon by Crown and Blackstone, including the following:

  • Strengthening of Crown’s governance through the mandatory application of the ASX Corporate Governance Principles and recommendations, including that Crown Melbourne have a majority independent board of directors;
  • Enhanced reporting of anti-money laundering and responsible gambling activities and additional auditing requirements on Crown;
  • New role requirements for Crown Melbourne’s CEO and key executives and non-interference requirements;
  • Improved information sharing with law enforcement agencies that Blackstone cannot change its corporate structure and funding arrangements without VGCCC approval, meaning Blackstone will not be able to introduce new investors into the structure without VGCCC approval; and
  • That Blackstone invests in, and maintains Crown Melbourne as the flagship casino in Australia.

All conditions are legally enforceable by the Victorian regulator.

Crown shares rose nearly 2% to $13.


In an interview with Nine/Fairfax media this week, Crown Resorts CEO Steve McCann said the company’s remediation efforts have produced possibly the best gaming environment in the world as it prepares for the approval of its casino licence at Sydney’s Barangaroo.

“We are very close,” he said of work with the regulator and NSW government to get approval for its casino licence.

“But what I think is more important is that we can really assure the government, the regulators, but also the community in general, that this will be the best gambling environment – certainly in the country – and probably in the world.”

The NSW Government t is expected to sign off on a strict conditional licence for the gambling giant later this month.

The proposed licence is expected initially to be for a two-year period and the agreement would also take Blackstone a step closer to buying Crown.