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HomeBusinessAustralian casino operator Crown braces for adverse misconduct investigation findings

Australian casino operator Crown braces for adverse misconduct investigation findings

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SYDNEY – Australian casino company Crown Resorts Ltd may be declared ineligible for its primary gambling license when an investigation reports its findings on Friday, but is expected to be allowed to remain open with conditions due to its huge economic role. .

Investors have largely taken into account the wide-ranging adverse findings of an investigation ordered by the state of Victoria, home to its Melbourne casino, which accounts for three-quarters of its winnings.

The investigation, known as the Royal Commission, has heard detailed reports that Crown allowed money laundering and failed to act on regulatory concerns and is the second such investigation after one in neighboring New South Wales. heard similar stories.


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That earlier investigation led to the suspension of Crown’s gaming license in Sydney before its AU $ 2.1 billion skyscraper complex opened in December 2020. It continues to operate with restaurants, bars and a hotel, but no casino games. random.

However, the Melbourne casino could somehow keep the game going, albeit with oversight, investors say.

They point out that it is one of the state’s largest employers with 11,500 employees and that the government would loathe further damaging tourism at a time when the country is preparing to reopen the borders after two years of COVID-19 restrictions.

“The expectation is that they will be deemed unfit, that’s what the majority of the market is telling you,” said John Ayoub, a portfolio manager at Wilson Asset Management, which owns shares in Crown. “The unknown is: what does that mean?”


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“There is a balance between (addressing wrongdoing and) the jobs and tax revenue that casinos generate. Tourism will be a great way to get out of the state debt holes that they are in. It is a critical infrastructure, “he added.

Crown declined to comment.

In both investigations, which included billionaire James Packer, Crown’s largest shareholder with a 37% stake, broadcasting live evidence from his yacht, executives acknowledged misleading the public by stating in full-page newspaper ads that he had no association. with tour operators with criminal ties.

They also said they were mending regulatory relationships and severing ties with tour operators. After losing its CEO, president, most of its board and many top officials to the investigations, the company argues that it is under new management.


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In the latest investigation, Crown’s attorney accepted that a finding of “inappropriateness” was possible, but urged not to recommend breaking or unconditional termination of the company’s license.

Crown has had three approaches to mergers and acquisitions since the Sydney investigation. He turned down an offer from US private equity firm Blackstone that valued the company at $ 6.2 billion and his favorite buyer, rival Star Entertainment Group Ltd, has since walked away. Talks for Oaktree Capital to fund a change of control have also collapsed.

This week, media reports accused Star of failing to act on money laundering risks and that has reduced the chances that Crown will be ordered shut down, said Angus Gluskie, managing director of White Funds Management, which has shares. by Crown.

Regulators “will need to make constructive recommendations. They can’t suspend the entire industry, ”he said.

Crown’s shares have fallen 27% since the media reported wrongdoing in 2019, valuing the company at A $ 6.3 billion ($ 4.7 billion).

($ 1 = AU $ 1.3541) (Byron Kaye Report; Edited by Edwina Gibbs)



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