Crown Resorts bans high rollers after they fail probity checks
Crown Resorts has swung the axe on a big proportion of its Australian high rollers.
The Age reports the casino operator has banned one out of every 10 of its Australian-based high rollers subjected to due diligence reviews because they could not explain where their money came from or raised other probity concerns.
The purge of big spending gamblers comes as the $6 billion group tries to clean up its operations and save its casino licences in Melbourne, Sydney and Perth following revelations of criminal infiltration, money laundering and irresponsible gambling policies.
Crown’s incoming chief executive Steve McCann said the company was “preparing for a range of possible outcomes” from royal commissions examining its licences in Victoria and Western Australia, including suspension or cancellation.
“We will consider all options to maximise shareholder value in the context of however the regulatory environment plays out,” Mr McCann said, including looking at any future takeover offers.
“Crown has three of the best integrated resorts in the world. I’m sure there will be people looking with interest at how things play out.”
Crown rejects Oaktree’s takeover proposal
Crown rejected an $8.4 billion takeover bid from private equity outfit Blackstone in May, while its Sydney rival The Star withdrew a $12 billion merger proposal in July citing the uncertainty about the future of its licences.
The licence for Crown’s new Sydney casino, which was set to open in December 2020, is suspended after an independent inquiry in NSW ruled it was unfit to operate a casino in February.
Mr McCann said Crown was close to finishing its “remediation plan” to win back its Sydney licence but declined to give a date for when the casino might finally open.
Meanwhile, a due diligence review of about 1800 local “significant” and VIP players had resulted in more than 250 being banned from its casinos, Crown said, because they could not explain the source of their wealth or they raised other probity issues.
The ongoing reviews were “far more significant and comprehensive than we’ve done before,” Crown’s chief financial officer Allan McGregor said.
CPH declines shareholder meeting with Crown Resorts
In a sign relations may be souring between Crown and its major shareholder James Packer, Mr McCann also revealed that the billionaire’s private company Consolidated Press Holdings, which owns 37 per cent of the company, has declined to meet with management to discuss its full-year results.
“We’ve offered a meeting as we have with all major shareholders. CPH has chosen not to take a meeting at this point in time, that’s their decision,” Mr McCann said.
Crown said it was no longer in discussion with private equity fund Oaktree about a proposal to fund a selective buy-back of Mr Packer’s shares. The billionaire has explored several deals to exit his stake in Crown over the past six years.
Crown revealed in late August that it had fallen to a $261 million full-year statutory net loss after the COVID-19 pandemic forced it to close or restrict operations at its Melbourne and Perth properties.
The heavy loss compares to a $79.5 million profit in 2020 and a $402 million profit in 2019.
Revenue collapsed to $1.5 billion in the year to June 30, down from $2.2 billion in 2020 and $2.9 billion in 2019.
Crown will not pay a dividend and has said it had agreed with its bank to not pay a dividend to shareholders for the first half of this year, or in the instance that one of its casino licences is suspended or cancelled, in return for extending $560 million of near-term debt maturities out to October 2023.
Crown Resorts wrote to the Victorian government in July warning it could default on its loans if its Melbourne casino licence was suspended as a result of Victoria’s royal commission.