Crown Resorts Will Contemplate Leasing Properties If Licenses Gets Suspended
Crown Resorts is currently being investigated in Victoria and Western Australia. The Australian casino operator is awaiting the results of the investigation and knows that it could end up losing its flagship Crown Melbourne license as well as licenses for its other properties in Sydney and Perth.
Crown Resorts tried in the past under former CEO Helen Coonan to indirectly warn the Victorian government that suspending its Melbourne casino license would result in over 10,000 job losses and a default in loan payments. That threat did more harm than good for Crown Resorts who now has a new CEO in Steve McCann.
McCann said they had taken into consideration that they might end up losing their casino licenses. If that turns out to be the case, they will have to look to salvage their shareholders’ investment and one of main ways to do that is by leasing out their casinos.
There have already been some inquiries coming in from potential partners and buyers. McCann says he’s willing to explore those options depending on what the outcome of the investigations. One of Crown’s licenses is suspended already. Its new A$2.2 billion Barangaroo casino in Sydney was not allowed to open after a New South Wales inquiry confirmed that money laundering was happening at Crown properties and that there were some major ties to organized crime.
Crown Barangaroo was allowed to open its non-gaming facilities but its casino remains closed. It’s been another tough year for Crown Resorts. There was a point when it had two acquisition offers one from U.S. investment group Blackstone and the other from rival operator Star Entertainment. Crown rejected Blackstone as the offer from Star Entertainment was better.
However, Star Entertainment decided to withdraw its offer after more violations came to light regarding Crown Resort’s Melbourne and Perth casinos.
If Crown does lease out their casinos, then they won’t be the first casino operators to go down that path. However, Mr. McCann insists that Crown Resorts would only lease the casinos out if they lose one of their licenses and were not given a chance to get it back.
The ultimate goal is to retain their gambling licenses and rebuild their business. Crown Resorts has taken a beating in the last few years and the Australian public no longer have faith in the brand. The market value of Crown Resorts has plummeted by 30 percent since the start of the year and now stands at $6.4 billion. Market analysts claim that if its stripped of its licenses, its market value could drop to $4.8 billion.