Troubled Australia Casino Operator Crown Resorts See Shares Plunge
Most casino operators across the world are struggling due to COVID-19 and the significant financial losses suffered during the lockdown. Australian casino operator Crown Resorts is facing all of these challenges plus even bigger issues with regards to multiple violations of gaming regulations.
The embattled operator has faced a long and drawn out inquiry by the Liquor & Gaming NSW regulator. Crown Resorts made a number of admissions including admitting to money laundering and ties with individuals who had connections to the crime syndicate in Asia.
Those admissions caused Crown Resorts shares to drop and has also cost Crown Resorts the license to open its A$2.2 billion Crown Barangaroo casino in Sydney. Crown Resorts share price was just over $12 per share mid-Jan 2020 but the price has now dropped to $9.30.
ABC News (Australia)
Crown Barangaroo which was set to open in June 2020 postponed its opening date to November 2020. However, the gaming regulator in light of the admissions decided to prevent Crown from opening its Barangaroo casino. The gaming regulator in Victoria is also taking a closer look at its flagship casino Crown Melbourne as a number of violations have also happened at this property.
There is a big push for gaming regulators to strip Crown Resorts of its casino license in Australia. Its former chairman James Packer has also faced a lot of criticism as he had personally brought on board junket operators who had ties to organized crime. Packer is the largest shareholder in Crown Resorts and has 36 percent stake in the company.
There is a push for Packer to relinquish ties with Crown Resorts fully in an effort to show gaming regulators that Crown Resorts is going to completely overhaul operations.
Blackstone Group Interested In Acquiring Crown Resorts
Blackstone Group is reputed to be the biggest investment firm in the world. Blackstone purchased a 10 percent stake in Crown Resorts in early 2020. This happened when James Packer tried to sell 20 percent of his stake to Melco Resorts and Entertainment and failed. Blackstone seized the opportunity then and is now looking to take over Crown Resorts.
Given the fact that Crown Resorts will most likely have to change its entire top level management to appease regulators that the change comes from the top down, it opens the door for Blackstone to takeover and save Crown Resorts.