The Crown Sydney skyscraper at sunset in Sydney, Australia, July 12, 2021. REUTERS/Loren Elliott
By Byron Kaye and Harish Sridharan
(Reuters) -Australia’s biggest state on Wednesday cleared casino operator Crown Resorts Ltd to take bets at a A$2.2 billion ($1.5 billion) Sydney casino, a breakthrough after a years-long money-laundering scandal crippled its growth plans.
The decision by the New South Wales gambling regulator ends a state of limbo for Crown’s new waterfront resort, which had its licence suspended just before opening 17 months ago amid claims of shirking anti-money laundering rules and dysfunctional governance at its other assets.
It also brings a bittersweet resolution for the company’s billionaire founder and 37% shareholder James Packer, who spent years campaigning for permission to build the skyscraper, Sydney’s tallest, which he once called his gift to his home city.
In the fallout of what became three state regulatory inquiries into Crown, all of which found it unfit for a gambling licence, the company accepted an A$8.9 billion buyout by private equity giant Blackstone (NYSE:BX) Inc, below its market value before the probes began and COVID-19 movement restrictions squashed its revenue. Blackstone takes control of the company on Friday.
“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,” said NSW Independent Liquor & Gaming Authority Chair Philip Crawford.
“With a complete clean-out of the board and senior executive, Crown has made significant progress,” Crawford added in a statement which also noted that its licence approval would remain conditional for up to two years.
In Victoria and Western Australia, the states where Crown already had operational casinos before the inquiries, the regulators let the company continue taking bets under two years of government supervision, citing the need to protect jobs.
A representative for Packer was not immediately available for comment, while Blackstone declined to comment.
Crown said it had worked closely with regulators and government to overhaul its business and that it remained focused on finishing its reform programme. The company expected to employ more than 2,000 people in Sydney, helping the city’s hospitality industry in the wake of the pandemic.
Chief Executive Steve McCann, who started in the role in October 2021, 10 months after the Sydney resort opened without its casino, said the company was finalising plans for a full opening.
($1 = 1.4422 Australian dollars)