Crown to get conditional licence for Barangaroo casino; Blackstone takeover to go ahead

The NSW gaming regulator is set to hand over a highly conditional licence to open its Barangaroo casino, and allow its suitor Blackstone to acquire the company.

The agreement between the NSW gaming regulator and Crown, if approved by cabinet, would allow Crown to open the VIP gaming floor at the $2.2bn Sydney casino. Picture: NCA NewsWire / David Crosling

The NSW gaming regulator is set to hand Crown Resorts a highly conditional licence allowing it to open its Barangaroo casino – if the agreement is ratified at a state cabinet meeting on Monday.

The proposed licence would be for a set period – potentially up to two years – after which it would become fully credentialed, The Australian has confirmed.

Under the agreement between Crown and the Independent Liquor and Gaming Authority, the company’s suitor Blackstone will also be given the green light to acquire the business.

The timing of the announcement has yet to be set, but is expected to be next week.

Crown’s shareholders – including its major investor James Packer – late in May overwhelmingly approved the $8.9bn sale of the company to Blackstone.

But the purchase has been stymied by the private equity firm’s difficulties in gaining approval from the three regulatory agencies in the states where Crown Resorts operates – NSW, Victoria and Western Australia.

In April, Crown delayed a shareholder vote on the deal after disclosing that approvals had “not yet been obtained”. The vote went ahead on May 20 despite Blackstone still awaiting approvals.

Mr Packer stands to receive a $3.2bn windfall for his 37 per cent stake in the company, which has had a decades-long association with his family.

The agreement with ILGA, if approved by cabinet, would allow Crown to open the VIP gaming floor at the $2.2bn Sydney casino,

However, the company has been given no guarantee that it will keep the conditional licence if it fails to demonstrate it should be allowed to operate. The conditions have been described as onerous in discussions, The Australian was told on Thursday.

“It will be a very high hurdle for them,” a source close to the process said. The NSW government will also consider a new ­casino commission, as recommended by the Bergin inquiry, which would have significant powers to “step in” and to suspend or cancel licences.

The Bergin inquiry was established after Mr Packer’s Consolidated Press Holdings agreed in 2019 to sell a 19.9 per cent stake in the company to Melco Resorts, a company associated with Stanley Ho, a Hong Kong businessman with alleged links to criminal organisations. The inquiry last year concluded Crown was not suitable to hold a licence to operate a casino in Sydney.

A Victorian royal commission separately concluded that the company should be stripped of its licence in that state – although it was allowed to keep operating if it agreed to strict new conditions.

ILGA, chaired by Philip Crawford, had previously said Crown could receive its licence in Sydney by the end of 2021. However, this timeframe was extended – both the regulator and the company privately expected by that gaming would be given the green light this financial year.

Some of the conditions that the company has agreed to – described to The Australian as unprecedented – include strict controls to prevent money laundering. There will be an independent monitor, a similar approach taken by Victorian officials.

Crown funds the independent monitoring body in Melbourne.

There remains the possibility, however, that members of the Perrottet government will push back on finally issuing a conditional licence – a process which began with the lobbying of then NSW premier Barry O’Farrell by Mr Packer in early 2012.

And Blackstone will still ­require approvals from regulators in Victoria and WA.

An ILGA spokesman declined to comment on Thursday.

While Crown has overhauled its board and executive – and Mr Packer has agreed to sell down his stake in the company – those reparatory works have been overshadowed by a growing scandal at rival Star Entertainment.

Earlier this week, the Bell inquiry was told Star was not suitable to hold a gaming licence in NSW despite an exodus of its management and directors.

Naomi Sharp SC, the counsel assisting the inquiry, said Star executives had been evasive in hearings, “prioritised money making over compliance” and presided over a culture that was “indifferent” to money ­laundering.

“It is not enough to bring a corporation into suitability simply to terminate the employment of or part company with a number of senior officers,” she said.

The inquiry heard that Star deliberately disguised almost $1bn worth of illegal transactions on debit cards as hotel charges over a seven-year period, misleading the National Australia Bank and the Bank of China.

Crown was hit with a $80m fine from the Victorian regulator this week over a similar practice.