SS Silver, an entity owned by funds managed or advised by private equity giant Blackstone, has secured regional approval from gambling regulators in New South Wales and Victoria to proceed with its proposed acquisition of Crown Resorts.
The NSW Independent Liquor & Gaming Authority (ILGA) and Victorian Gambling and Casino Control Commission (VGCCC) both signed off on the deal and also approved Blackstone to operate a land-based casino in each of the Australian states.
Blackstone first submitted a bid of AUS$8.02bn (£4.63bn/€5.33bn/US$5.64bn) to acquire Crown in 2021. This initial bid was rejected but an increased bid of $8.87bn was approved by the Crown board.
The offer came at a time when Crown was faced with a number of inquiries. In February 2021, Crown was deemed unsuitable to operate a casino in Barangaroo, Sydney, after an investigation uncovered evidence of money laundering in its facilities.
Later in the year Crown was also ruled as unsuitable to operate a casino in Victoria, with an investigation ruling Crown had engaged in “illegal, dishonest, unethical and exploitative” conduct.
In addition, in February of this year, the Perth Casino Royal Commission found Crown was “unsuitable” to operate its Crown Perth resort in Western Australia but opted not to recommend revoking its licence and instead proposed a series of measures for the operator.
Blackstone still requires clearance from the Perth regulator to complete the acquisition of Crown, but as this approval remains outstanding, it is not yet clear when the purchase will complete.
Last month, the majority of shareholders in Crown Resorts voted in favour of the takeover. Some 92.05% of shareholders present and voting were in favour of the acquisition, and 99.91% of the votes cast by shareholders backed the acquisition.
Speaking about the decision to approve Blackstone’s takeover proposal and to operate the Crown Sydney site, NSW ILGA chairperson Philip Crawford said Blackstone was subject to an extensive probity assessment that examined its capacity to address the risks and issues of concern identified in the Bergin Report.
“The probity assessment has also resulted in certain persons being approved to become ‘close associates’ of Crown Sydney,” Crawford said. “These approvals are a key step in the Authority’s ongoing work to ensure Crown Sydney is able to fully meet its undertakings for major operational, governance and structural reforms.
“As the prospective owner of Crown Resorts, 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.
“This commitment is vital to ensure Crown Sydney is free from criminal influence and properly manages the risks of harm associated with casino activities.”
VGCCC chairperson Fran Thorn also outlined the regulator’s decision to approve, saying that both stone and Crown had to agree to an extensive list of accompanying conditions and protections.
These included strengthening Crown’s governance through the mandatory application of the ASX Corporate Governance Principles and recommendations, enhanced reporting of anti-money laundering and responsible gambling activities, and new role requirements for Crown Melbourne’s CEO and key executives and non-interference requirements.
Other conditions included improved information sharing with law enforcement agencies, Blackstone not being able to change corporate structure and funding arrangements without VGCCC approval, and Blackstone being required to invest in and maintain Crown Melbourne as a flagship casino in Australia.
These will be in addition to many of the conditions imposed on Crown Melbourne as a result of the investigation last year, with remaining measures to include requirements to operate under an appointed special manager and to the VGCCC’s suitability assessment in 2024 in order to retain its licence
“In reaching this decision, our specialist team put in many months of work investigating the suitability of the Blackstone Group to become an associate of the Melbourne casino operator,” Thorn said.
“Our approval comes with stringent conditions which balance delivering stronger controls on the casino and ensuring it continues to be the flagship casino in Australia. We will take action should any of these conditions not be met by either Blackstone or Crown.”
The decision came after the VGCCC last week also issued Crown with a fine of AU$80.0m in relation to payments made using China Union Pay (CUP) cards. Between 2012 and 2016, the Crown Melbourne casino allowed patrons to use CUP credit or debit cards to access funds to gamble, which the VGCCC said was illegal and facilitated access to nearly $164m, from which the operator derived an estimated revenue of more than $32m.
Original Article
