The Blackstone Group have their sights set on acquiring Crown Resorts, and are one step closer to finalising the deal.
Two of the three regulatory bodies in Australia have backed Blackstone, leaving the Federal Court to rubber stamp the deal.
The Victorian Gambling and Casino Control Commission (VGCCC) and the New South Wales Independent Liquor and Gaming Authority (ILGA) agreed to the deal.
The deal is now dependent on the ruling of the Federal Court of Australia in Western Australia, where Crown Resorts holds the license for Crown Perth, the only gambling venue in the state
Crown Resort shareholders voted in support of the proposed deal last March, but the company has continually been in the news for breaches of Australian laws committed against the Australian gambling regulations.
The cost of the deal, which investors view as a fresh start, is estimated to be around $6.5 billion.
Despite the recent regulatory woes, Crown Resorts was given the green light by two of the three state regulators, who believe the company has now cleaned up its issues. Both regulatory bodies painstakingly took time to go over the proposed deal to ensure total compliance.
Crown Resorts was recently fined $57 million for their role in illegal money transfers to Crown Melbourne from China. This lead to several high-profile changes at the top at Crown Resorts and renewed scrutiny from the state regulators.
The Victorian Gambling and Casino Control Commission (VGCCC) stated that they will follow up and ensure that both Crown Resorts and investment company Blackstone remain compliant.
“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,” they 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 act should any of these conditions not be met by either Blackstone or Crown”
VGCCC has appointed a Special Manager, tasked with overseeing the activities of their Melbourne outfit. If there are no negative reports after one year they will call off the special monitoring.
In a separate press statement, the NSW Independent Liquor & Gaming Authority Chairperson Philip Crawford stated that they are working round the clock to ensure that Crown Resorts is devoid of any illegal activities in NSW.
“This commitment is vital to ensure Crown Sydney is free from criminal influence and properly manages the risks of harm associated with casino activities,” he said.
“The probity assessment has also resulted in certain persons being approved to become ‘close associates’ of Crown Sydney.
“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.
Crown Resorts was indicted for the role it played when China Union Pay was used to access gambling funds by its customers and also involved in money laundering activities. The company was slammed with the highest fine in the Australian gambling industry.
Blackstone and the current CEO of Crown, Steve McCann, have renewed their commitment to ensure the company does not go back to its dark days of unaccountability.
The sale of Crown Resorts would position Blackstone nicely to take advantage of any regulated online casino industry in Australia, with the current ban on real money gambling sites, putting the country at odds with much of the western world.