UPDATE 1-Australian casino operator Crown braces for adverse findings from misconduct inquiry

- Advertisement -

(Adds Victorian Government statement in 9th paragraph)

- Advertisement -

SYDNEY, Oct 14 (Businesshala) – Australian casino company Crown Resorts Ltd could be disqualified for its main gambling license when an investigation submits its findings to the government on Friday, but is expected to be out of shape due to the conditions. will be allowed to remain open. economic role.

- Advertisement -

Investors have largely taken note of the widespread adverse findings from an investigation mandated by the state of Victoria, which is home to its Melbourne casino, which accounts for three-quarters of its profits.

The investigation, known as the Royal Commission, has heard detailed accounts of the Crown enabling money laundering and failing to act on regulatory concerns, and heard similar accounts in the neighboring New South Wales state. This is the second such investigation after this.

- Advertisement -

An earlier investigation suspended Crown’s Sydney gambling license before the $2.1 billion skyscraper resort opened in December 2020. It continues to operate with restaurants, bars and a hotel, but no gambling.

Investors say that Melbourne Casino, however, with oversight can somehow keep gambling afloat.

They note that it is one of the state’s largest employers with 11,500 employees and that the government will be prepared to make a dent in tourism at a time when the country prepares to reopen borders after two years of COVID-19 restrictions. Used to be.

“Hopefully they will be considered unfit, that’s what the market is telling you,” said John Ayoob, a portfolio manager at Wilson Asset Management. “Unknown: What does it mean?”

“There is a balance between (addressing wrongdoing and) the jobs and tax revenue that casinos generate. Tourism is going to be a big way we can get ourselves out of the state’s debt hole. The framework is there,” he said.

Crown declined to comment. The Victorian government said it would consider the findings of the report and release the document publicly by the end of the month.

In both inquiries, which involved billionaire James Packer – Crown’s largest shareholder with a 37% stake – livestreaming evidence from his yacht, officials admitted to misleading the public by claiming in full-page newspaper ads that its There was no connection with tour operators with criminal ties.

They also said they were repairing regulatory ties and severing ties with tour operators. After losing its CEO, chairman, most of its board and several senior employees in questioning, the company argues that it is under new management.

In the latest inquiry, Crown’s attorney acknowledged that an “inappropriateness” finding was possible, but urged against recommending a company breakup or unconditional licensing.

Crown has had three M&A approaches since the Sydney inquiry. It rejected an offer from US private equity firm Blackstone, which was valued at $6.2 billion and its preferred buyer, rival Star Entertainment Group Ltd., has since left. Negotiations for a change of control to Oaktree Capital have also collapsed.

Media reports this week accused Star of failing to act on money laundering risks and making Crown’s closure less likely, said Angus Glusky, managing director of White Funds Management, which holds Crown shares.

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

Shares of Crown have fallen 27% in 2019 since media reports of alleged wrongdoing, valuing the company at $6.3 billion ($4.7 billion).

$1 = 1.3541 Australian Dollar Reporting by Byron Kaye; Editing by Edwina Gibbs


- Advertisement -

Stay on top - Get the daily news in your inbox

DMCA / Correction Notice

Recent Articles

Related Stories

Stay on top - Get the daily news in your inbox