Crown Resort’s owner Blackstone declares: “We’re in it for the long haul”

Turning the ship around at the casino was always expected to be measured in years, says its new $US1 trillion owner Blackstone.

The turnaround of Crown Resorts is now entering the “next phase” with the ambitious rebuild always planned as a multi-year journey, according to the $US1 trillion ($1.5 trillion) Wall Street giant which bought the casino operator from James Packer.

Blackstone global president and chief operating officer Jon Gray told The Australian he “made a long-term commitment” to rebuilding Crown, even in the face of short-term pressures on the business.

Jon Gray is the global president of Blackstone Group, the $US1 trillion asset manager that recently acquired Crown Resorts in Australia. Picture: John Feder/The Australian.

As one of the world’s biggest investors, Blackstone paid $8.9bn for Crown in mid-2022, taking charge of casinos in Melbourne, Sydney and Perth just as they were facing intense regulatory heat.

Mr Gray said the near two-year ownership of Crown and rebuild has been positive, where the aim has been to win back the confidence of regulators in NSW and Victoria, which had both put the operator on probation. In recent months both regulators have separately declared Crown again suitable to hold a casino licence.

Through this period the casino has also been hit with fines running into the hundreds of millions, namely from financial crimes agency Austrac for its past behaviour.

“The first priority was make sure we ushered in this era of safe gaming,” the Blackstone boss said in an interview in Sydney.

“That was the most important thing — that we operated at the highest standard and we’ve now got suitability.

“Now we’ve got to focus on operating the business efficiently and delivering a great customer experience, while maximising value over time.

“That’s the next phase of this and we don’t view this as an overnight thing. This is a journey, when you buy something that was unfortunately broken before, you’ve got to put in a lot of effort and capital to get it to the right spot.”

Now the attention will turn to the business of running a casino, which he concedes needs “a little more energy” given the slower recovery out of the Covid pandemic.

His comments follow Crown this month outlining plans for a major restructure, involving cuts to as many as 1000 jobs across its three properties, citing the economy and subdued trading as driving the shake-up.

Mr Gray wouldn’t be drawn on whether Blackstone would bid for Star Entertainment’s license in Sydney if it was available given the NSW’s regulator’s increasingly damning assessment of the rival operator.

Star is facing an intense regulatory probe and in March saw the exit of its chief executive, while chairman David Foster stepped down from the board this month.

Star has a full license which allows for poker machines, while Crown’s license restricts it to table play.

“Our focus continues to be on Crown,” the Blackstone boss said.

Mr Gray said the recovery of international travel into Australia is slower-than-expected, though CBDs of the capital cities — Melbourne in particular — are now starting to recover. However, there is more work to be done in rebuilding the properties.

“I would say we’re always striving to make things better. We’re very comfortable with the progress we’ve made around compliance and safety,” said Mr Gray.

Crown’s multi-billion Tower at Barangaroo in Sydney. Picture: Nikki Short

“I’d say operationally, we want to get better, we want to get more customers, we want the businesses to thrive more over time. And that will be a process.

“I think the cyclical pressures in Australia will abate … more people will travel internationally here. I think people will do better domestically.

“Obviously, right now, with (interest) rates elevated that hurts spending, fewer people have been coming into Melbourne. In particular, I think some of these things will turn around.

“As a long-term investor, we’ve made a long-term commitment to these assets. We’re sticking with it. And that’s our focus.”

Blackstone has more than $US1 trillion in assets under management around the world from real estate, private equity, credit funds and a fast-growing energy and digital infrastructure book.

With Crown, Blackstone is expected to use the ‘invest and build’ playbook which worked for the asset manager’s stunning turnaround of The Cosmopolitan in Las Vegas, that was sold four years ago for $US5.7bn.

Mr Gray has said he wants Crown to be a “best in class” entertainment company operating at the highest standard possible.

Originally published as Crown Resort’s owner Blackstone declares: “We’re in it for the long haul”