Perth Casino Royal Commission wraps up 

By Noah Taylor Updated
Crown Resorts off the ASX as Blackstone takeover confirmed

The Perth Casino Royal Commission in Western Australia wound up its inquiry in early March, though it’s likely to be another month before Crown Resorts hears whether it will be deemed suitable to retain its licence.

Asia Gaming Brief reports the three commissioners in Perth will present their findings and recommendations to the state government, which will make the decision on Crown’s suitability.

It’s the third such inquiry into the Australian operator, which was found to be unsuitable in both New South Wales and Victoria, after the probes revealed shocking lapses in corporate governance.

In the former state, it’s working towards achieving suitability for its new Barangaroo resort, while a special administrator was appointed in the latter to oversee operations for a period of two years.

Counsel for Crown urged the Western Australian commission not to focus on the findings of the prior two hearings in its decisions, but to consider the steps the company has taken towards remediation, according to local media reports.

In early March, Australia’s financial crimes and anti-money laundering watchdog announced it had begun civil penalty proceedings against Crown Resorts for “serious and systematic” breaches in the law.

AUSTRAC launches investigation into Crown Resorts

AUSTRAC alleges Crown Perth and Crown Melbourne contravened their obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 following an investigation that began in October 2020.

Crown Resorts said its properties had cooperated fully with the investigation and it warned shareholders last year that it was expecting the probe to result in financial penalties.

The company’s management has recommended a takeover from US investment group Blackstone.

AUSTRAC said ongoing failures to properly vet risky customers, including those brought in from overseas by junket operators and locals with links to people already banned from Crown’s Melbourne and Perth casinos, accounted for 547 breaches of anti-money laundering laws.

Each alleged breach of the law, if proven, could attract a penalty of up to $22.2 million, meaning Crown faces a fine that could theoretically exceed $12 billion.

However, if AUSTRAC’s action succeeds, a far smaller penalty is likely.

The current record fine is $1.3 billion, which Westpac agreed to pay to settle allegations by AUSTRAC that the bank breached AML/CTF laws more than 23 million times, including allowing a dozen customers to transfer money to the Philippines in a way consistent with child exploitation.

From March 2016, just 60 high-risk customers turned over $70 billion at Crown’s casinos, pumping $1.1 billion in losses into the company’s coffers, AUSTRAC said.

Crown selling itself short with Blackstone valuation

Blackstone’s $13.10 per share offer for Crown Resorts, which the Crown board has endorsed undervalues the company according to one of Australia’s leading investors.

Anton Tagliaferro, head of investment at Investors Mutual, which holds just over two per cent of Crown stock, said he won’t definitively endorse the Crown board-backed offer until seeing the scheme booklet and other contenders are ruled out.

Mr Tagliaferro said he holds out hopes of counter-bidders, with a long-term view of the casino giant’s profitability entering the fray.

He also said rival casino operator The Star could dust off its plans to lob a merger while others “would be closely watching on”m to see if there is an opening for a counter-bid.

Crown’s board signed a binding sale agreement on February 14, announcing to the market it had unanimously backed Blackstone’s $13.10-a-share offer after a 12-month battle for the casino giant, which has been mired in scandals that led to separate royal commissions in Victoria and Western Australia.

Mr Packer, a known seller, whose private investment vehicle Consolidated Press Holdings owns 38 per cent of the beleaguered casino empire, declined to comment on Monday’s announcement.

However, it is understood that CPH is pleased with the offer and will support the deal unless another bid is made or regulatory hurdles emerge.

Long-time major Crown shareholder Perpetual, which holds 9.29 per cent, endorsed Blackstone’s bid when the offer landed in mid-January.

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