With its brand new casino in Darling Harbour having sat idle since construction was completed in 2020, Crown Resorts (ASX: CWN) can finally welcome punters to the Barangaroo tower after being granted conditional approval by New South Wales regulators today.
The NSW Independent Liquor and Gaming Authority (ILGA) today gave Crown Sydney’s casino operations a temporary green light while it conducts the final phase of a gaming licence suitability assessment.
Meanwhile in Western Australia, a bill will be introduced to the state’s parliament today designed to give the casino regulator more powers to monitor casinos and allow it to impose penalties as high as $100 million; the same limit now available to regulators in Victoria, while in Queensland new laws will cap penalties at $50 million for operators that misbehave.
The conditional approval is the final stage of CWN’s return to ILGA’s good books, following the 2021 Bergin Inquiry which found Crown unsuitable to hold a casino licence in Sydney.
Since then, the company underwent a major restructure in terms of board and executive leadership, and entered into an $8.9 billion merger with US investment firm Blackstone which was approved by the Federal Court last week.
“Under the authority’s supervision, Crown has rebuilt its gaming model from the ground up, which has meant deep structural change around governance, anti-money laundering measures and corporate culture,” ILGA chairperson Philip Crawford said.
“After more than one year’s work with Crown, the authority is pleased to have reached a stage where Crown can open its casino operations on a conditional basis.
“Given the need to observe the changes in operation as well as ensure changes are embedded in the business, the authority will consider approval of Crown’s suitability until the end of the conditional gaming period, which could run between 18 months and two years.”
Crawford said the Bergin Inquiry highlighted the scale and scope of issues to be remediated by Crown, with potentially billions of dollars having been laundered through its casinos.
“Crown has been required to implement a raft of stringent controls to prevent money laundering and criminal infiltration in its NSW business model. What was happening in Crown’s interstate operations will not be repeated in NSW,” Crawford said.
“With a complete clean-out of the board and senior executive, Crown has made significant progress and has agreed to ongoing work to regain its casino licence.”
The news has been welcomed by Crown today, which notes the commencement of gaming in Sydney means the casino will soon hire more than 2,000 people once all of the tables and machines are operational.
“Today is an important day for Crown, our customers and our people, who have been eagerly awaiting this announcement for some time and cannot wait to share the full Crown Sydney experience with the world," CWN CEO and managing director Steve McCann said.
“Over the past 15 months, we have worked closely with ILGA to ensure we have the right measures in place for the commencement of gaming in Sydney and we will continue to work with them on our reform program, to showcase our suitability as a casino operator and demonstrate our ability to deliver exceptional experiences in a safe and responsible environment.
“We will now finalise our opening plans and look forward to shortly announcing the details and timing of our launch.”
The conditional approval comes as the ILGA also approved CWN’s new owner Blackstone as being suitable to hold a casino licence in NSW today.
ILGA gave its blessing to the merger of Crown and Blackstone earlier this month, coinciding with conditional approval from the authority’s counterpart in Victoria and, one day later, a green light from the Western Australian gambling regulator.
The final stamp of approval was granted by the Federal Court one week ago, meaning the shareholder-backed deal - which will see James Packer exit the company - will come into force on Friday.
While the buyout will see Crown delist from the ASX, the casino giant will be subject to “tough conditions” that align with recommendations from the Perth Casino Royal Commission (PCRC), as well as several conditions set out by the Victorian Gambling and Casino Control Commission (VGCCC).
Both Royal Commissions followed the 2020-21 NSW Bergin Inquiry, which probed the group’s operations and deemed the company unsuitable to hold a casino licence.
Since then, the Crown Resorts tower in Sydney has only been open for non-gaming activities and areas such as accommodation, restaurants, bars and entertainment.
The news also comes after the Queensland Attorney General Shannon Fentiman announced last week that an independent expert review would be undertaken into the suitability of Crown's main Australian competitor The Star (ASX: SGR) to hold casino licences in Queensland.
For The Star, the review will be its second moment under regulatory scrutiny this year, following on from the Bell Review in NSW which has held public hearings into ongoings at the company's Sydney casino.
Counsel assisting the Bell Review, Naomi Sharp SC, highlighted ongoing ‘systems failures’ and ‘very significant cultural problems’ within the senior the ranks of the company with evidence showing they had caused the company to breach the Casino Control Act.
New casino legislation to be introduced to WA Parliament
The Western Australian Parliament will today see new legislation introduced that will give the state’s casino regulator more oversight of the industry and sharpen its teeth with a major increase in penalty limits.
Under the proposed legislation, an independent monitor will be installed to oversee casino remediation and an independent chair will be appointed to the state’s casino regulator.
The legislation also imposes harsher penalties for non-compliance, lifting the maximum fine from $100,000 to $100 million.
Once passed, the legislation will empower the Racing and Gaming Minister and Gaming and Wagering Commission to enact remediation processes within the casino.
Other key measures within the bill include:
- a provision for the WA Government to recoup costs for the independent monitor from Crown/the casino operator;
- additional offences and penalties relating to providing false or misleading information to the independent monitor;
- enabling an independent chair to be appointed to the Gaming and Wagering Commission;
- enhancing powers for the Minister to direct the Gaming and Wagering Commission; and
- enhancing Gaming and Wagering Commission powers to direct the Perth Casino.
"This legislation is a direct response to the Royal Commission and will ensure the WA Government can hold the casino operator to account,” WA Racing and Gaming Minister Tony Buti said.
"Greater integrity is not optional - the WA Government will have a new independent monitor and much higher penalties to ensure the highest standards are upheld."
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