Interesting Times for Crown Resorts Amidst Licensing Issues and Takeover Bids

Crown Resorts Australia has been in the news lately - like with their transformation - but it hasn’t always been for positive reasons. The latest news of the real money casino comes as a takeover bid from Blackstone Group is underway for a total of $6 billion USD. This move is currently happening in parallel with regulators' investigation into whether to rescind the casino’s licenses.

More About the Takeover Bid

Blackstone Group, an American investment firm, has made an offer of AU$11.85 a share for Crown Resorts, about a 20% premium to its closing share price from the previous week. However, this offer comes with some conditions, namely that the Australian governing legislators will allow Blackstone to own and subsequently continue operating Crown Group’s casinos located in Perth, Melbourne, and Sydney.

But Crown is not rushing to accept the offer. The board is still planning to sit and decide whether to back the deal once they access Blackstone’s offer. Blackstone is not a stranger to Crown Group, as it already has a 10% stake in the casino group. Blackstone has confirmed that it has issued the proposal and that the ball is now in Crown’s court.

Blackstone’s Other Gambling Interests

Blackstone already has multiple real estate assets in Australia. The group also owns several casinos, such as the Cosmopolitan casino and resort in Las Vegas. The move to acquire Crown Resorts will complement both these aspects of the group’s growth strategies well.

Additional Inquiries into Crown

Last month, following an inquiry headed by the gambling regulator from New South Wales, it was decided that Crown was not eligible to run a new casino on Sydney’s waterfront. Adrian Finanzio, the lawyer who spearheaded the investigation, had these sharp words to say about Crown: "After the evidence listed in these hearings, it remains clear that Crown Melbourne is not fit to hold a license now."

Finanzio expressed "little confidence" in Crown's new chair, Helen Coonan, stating that her "record as a director of Crown Resorts makes clear that her inaction in the past contributed to the problems" and that her actions since the Sydney inquiry "give little confidence that she is the right person to shepherd the extent of change required."

Finanzio has more to say about his assessment of Crown being able to handle running the new casino: "programme of corporate rebirthing that Crown says is underway is insufficient and so uncertain as to lead this commission to the conclusion that there is a sufficiently clear pathway to suitability."

Crown in Hot Water in Victoria, Too

Crown Resorts has also been fined A$120 million by regulators in the state of Victoria for "extensive, sustained, systemic, and very serious" misconduct. The main concerns that were raised in the report indicate that Crown Resorts did not do enough to assist and prevent problem gambling habits from worsening amongst its clientele. This includes:

Failing to prevent gambling harm by allowing the client to gamble continuously for 12-hour stretches or more.
Allowing some clients to even gamble for 24-hour stretches.
Allowing profiled problem gamblers to enter the casino and escape attention.

Australia in the Spotlight for Problem Gambling

Problem gambling is rampant in Australia and the licensing bodies are clamping down seriously on casino and gambling operators. The major players in the industry, of which Crown Resorts is one of them, should be making more of an effort to combat problem gambling and follow the suggested measures laid out by the authorities.