The takeover of casino operator Crown Resorts by US financial services giant Blackstone Group is all but assured after Victoria and New South Wales (NSW) state gambling regulators approved the deal.
The Victorian Gambling and Casino Control Commission (VGCCC) and the NSW Independent Liquor & Gaming Authority (ILGA) announced the green light for the takeover within hours of each other on Thursday morning (June 9).
With Crown shareholders approving the takeover on May 20, the remaining material hurdles for the deal are Western Australia state’s gambling regulator and a final sign-off from the Federal Court.
But neither of these appear likely to scuttle the process, despite all three state inquiries finding the company to be an unsuitable gaming licensee.
Still, the VGCCC has imposed several conditions for the takeover on top of strict, unfolding legislative controls imposed by the Victoria state government, following a Royal Commission’s withering assessment of Crown Melbourne operations.
The new, enforceable “protections” require Blackstone Group to fully apply Australian Securities Exchange principles and recommendations for companies, including the presence of a majority of independent directors on the board.
Other enhanced compliance measures include tougher responsibilities for Crown Melbourne’s CEO and other executives, more diligent reporting of anti-money laundering matters and responsible gambling benchmarks, tighter auditing requirements and closer liaising with law enforcement agencies.
Blackstone will not be able to alter the corporate or funding structures of Crown without VGCCC approval, including addition of investors, while ensuring that it “invests in and maintains Crown Melbourne as the flagship casino in Australia”.
Key operating conditions recommended by the Royal Commission and since made law will remain in place, including the government-appointed, veto-wielding “special manager” appointed for a two-year probationary period and passing a corporate suitability test in 2024.
Meanwhile, in Sydney, ILGA chairperson Philip Crawford said in a statement: “Blackstone has been required to demonstrate the highest standards of probity as well as a commitment to deliver the full suite of operational changes recommended by the Bergin Inquiry.”
But the ILGA did not elaborate on “certain conditions under a private equity model of ownership” that Blackstone had to meet to secure the green light.
Adding to the unusual volley of good news for Crown is a likely imminent announcement by the ILGA permitting Crown Sydney’s casino to launch operations after a 19-month suspension.
“Separately, [the ILGA] has worked closely with Crown on plans for a conditional opening of gaming at Crown Sydney,” Crawford said.
“This would allow the authority to monitor the implementation by Crown of its obligations under revised internal control measures.”
The ILGA blocked the scheduled opening of the casino ahead of the Bergin Inquiry’s findings on the suitability of Crown to hold a casino licence in NSW.
In the time since, the company leadership has been transformed, with almost all senior management and board members falling on their swords amid ongoing company fines and damaging revelations of incompetence and indifference to compliance, including evidence of facilitation of crime and negligent attitudes to staff safety.