Crown Resorts and Perth Casino takeover gets green light from WA, but not done yet

Blackstone cleared a final major hurdle in its planned $8.9 billion takeover of Crown Resorts, with the WA government announcing it had given regulatory approval to the deal.

The American private equity giant was waiting for the green light in WA, after Thursday’s announcement that regulators in New South Wales and Victoria had approved him as a suitable casino licensee.

If the takeover is approved by the Federal Court, the sale will likely result in a $3.36 billion payday for majority shareholder and Crown founder James Packer.

WA Racing and Gaming Minister Tony Buti said on Friday morning that he and the state’s casino watchdog, the Gaming and Betting Commission (GWC), had approved the acquisition of Crown by Blackstone, but with strict conditions.

These include the requirement that institutional investors in Blackstone cannot be involved in the day-to-day operations of Crown Perth.

The company would also be subject to enhanced reporting on anti-money laundering and responsible gambling activities, as well as additional audit requirements.

“These conditions align with a number of recommendations from the recent Perth Casino Royal Commission,” he said.

“The state government has already made significant improvements to the regulatory regime and remains committed to establishing an even stricter regulatory and governance framework to ensure that anyone who owns or operates Perth Casino is held accountable.”

Mr Buti said the conditions, combined with forthcoming reforms, would ensure proper standards were met at the Perth casino.

The Victorian Gambling and Casino Control Commission (VGCCC) has also imposed conditions on Blackstone, including that it maintain Crown Melbourne as its flagship Australian casino.

Crown will become a private company

Crown told the ASX on Friday that if the Federal Court approves the takeover at a hearing scheduled for Wednesday, it would announce a timetable for closing the deal.

This would mean Crown Resorts would become a private company and no longer be required to report to the ASX.

Dr Buti said he had directed Blackstone to operate with “the highest standards of governance and operation”, including applying ASX corporate governance principles.

The company will also be required to report all investigations by regulators in Australia and overseas, seek approval of any new investors and strengthen its audit and anti-money laundering reporting.

GWC chair Lanie Chopping said evaluating Blackstone’s bid had been a “detailed and complex process”.

“Probity approval from the Gaming and Betting Commission has been granted subject to a number of conditions designed to ensure that the commission exercises oversight and the ability to monitor any changes in the management or ownership of the licensee. license,” she said.

What do we know about Blackstone?

Blackstone is the second largest private equity fund in the world.

In 2021, it reported revenues of over US$20 billion (AUD $28 billion) and owns several notable global companies.

According to its website, the company has $915 billion in assets, nearly a third of which is in real estate.

In 2007, Blackstone bought hotel operator Hilton Worldwide and has since purchased the Bellagio, MGM Grand and Mandalay Bay resorts in Las Vegas.

He also owns the Spanish company Cirsa, which operates 147 casinos in Spain, Italy and Latin America.

Business won’t operate with impunity, expert says

Finance professor Raymond Da Silva Rosa of the University of Western Australia says the company’s size and power could allow it to operate with impunity, but he doesn’t think it will.

“There were some pretty egregious, on the face of it, violations of the terms of its license. And what I’m saying is that being a public company hasn’t actually stopped that from happening. .”

Professor Da Silva Rosa said the extent of Blackstone’s business interests provides the government with leverage when it comes to ensuring it follows the law.

“If it decides to act or not to act in accordance with the law, it becomes much more difficult for this company to do business in Australia,” he said.

“In some ways being a big private equity firm, with a lot of interest in Australia, gives the government more clout, they have more pressure points to apply to the company if they don’t meet the law.”

He said the only way to ensure more accountable governance was for the government to improve its oversight.

“My feeling is that it’s not so much the existing governance requirements that are the problem, but rather their enforcement.”

He said it was the regulators, rather than the ASX, that failed to provide adequate oversight of the Crown.

“And so I would advocate for tighter disclosure requirements as a condition of the operating license.”