Foamy water noticed near Crown Melbourne

By Ethan Anderson Updated
Royal commission hears that Crown was reluctant to implement tighter money laundering controls

Melbourne Water said it is aware of foamy water being discharged into the Yarra River near Crown Casino and is on site investigating.

The water provider said it understands the visible foam in the river is causing concern and apologies for the current situation.

Water tests are being conducted to confirm the cause and Melbourne Water is in cooperation with the Environmental Protection Authority, it said.

Melco sells Crown shares to US-based group

Casino investor Melco Resorts and Entertainment has sold its 9.99 per cent stake in Australian gaming operator Crown Resorts to an entity “owned or managed” by US-based asset management firm The Blackstone Group.

GGR Asia reported in April that the sale was at a 37.3 per cent discount compared to the price Melco paid in May last year.

In a Wednesday filing to the Australian Securities Exchange, Crown Resorts said it had been informed that an entity linked to The Blackstone Group had acquired 67,675,000 Crown Resorts shares from Melco Resorts – representing its entire stake.

The shares were sold at a price of A$8.15 per share.

The sale amounted to more than half a billion dollars in aggregate.

In May last year, Melco Resorts said it was paying A$13 per Crown share to CPH Crown Holdings.

The latter company, controlled by Australian businessman James Packer, was a major shareholder in Crown Resorts.

The acquisition price per share represented an aggregate investment of nearly A$879.8 million for the 9.99 per cent stake in Crown Resorts.

The management of Melco Resorts had already flagged earlier this year the sale of the Crown Resorts stake was a “potential source of liquidity” in case Melco Resorts had additional “capital needs”.

When it first announced the deal, Melco Resorts was to acquire a 19.9 per cent stake in Crown Resorts, in a deal valued at A$1.76 billion.

In February, Melco said it had decided not to pursue the purchase of a second tranche of shares in the Australian company because of the “impact of the coronavirus pandemic”.

The latest announcement comes amid an inquiry into Crown Resorts’ suitability to hold a gaming licence in New South Wales.

The company is currently developing a casino complex at Barangaroo in Sydney.

The New South Wales gaming regulator had launched a public inquiry into the Melco Resorts deal, as well as to probe whether Crown Resorts breached the terms of its gaming licence for its Barangaroo project.

The inquiry has been temporarily halted due to the coronavirus pandemic.

Crown Sydney’s pokies fate sealed

The New South Wales government has cemented the near term financial fate of James Packer’s Crown casino at Sydney’s Barangaroo, according to the Sydney Morning Herald.

The government inked a deal with rival The Star, confirming it as the exclusive casino rights operator of poker machines for the next 21 years.

Crown’s lobbying efforts to alter the terms of its existing agreement that would have banned pokies had been determined and abiding.

Over the year, the lobbying was spearheaded by Crown executive and former national secretary of the Labor Party Karl Bitar and former federal Labor minister Mark Arbib.

Government insiders have suggested that Crown came close to signing a memorandum of understanding a few years ago with then-NSW opposition leader Luke Foley to revisit Crown’s poker machine restriction.

Under the government agreement signed with The Star, if the exclusivity deal is altered, the incumbent casino pokie operator will receive nonspecific compensation.

Many casino analysts had assumed a strong likelihood Crown would ultimately be successful in its quest to remove the slot ban.

The Star’s share price initially spiked more than four per cent Monday and the regulatory certainty on slots was one of the main reasons.

The partial reopening of Star’s Sydney casino complex on Monday and a new tax deal with the NSW government were the other two pieces of news that sent shares higher.

For Crown, having its poker machine ambitions thwarted places additional pressure on the economics of its Sydney casino, whose licence approval was originally successful on the basis that it would be an ultra-VIP casino that would cater to Asian high rollers rather than the Australian market.

Not only did the international VIP market fall after Crown employees were arrested in China in 2016, but COVID-19 has successfully killed international tourism for an unknown period, impacting all Australian casinos.

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