After probity assessment

Blackstone gets suitability approval from NSW regulator to become Crown Sydney casino operator

Crown Sydney, Australia.
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The NSW Independent Liquor & Gaming Authority announced on Thursday it has approved funds manager Blackstone’s suitability to hold a casino license in New South Wales, thus paving the way for the company to become Crown Sydney casino’s operator.

Authority Chairperson Philip Crawford explained Blackstone has been subject to an extensive probity assessment that examined its capacity to address the risks and issues of concern identified in the Bergin Report, an inquiry that examined numerous instances of suspected failures by casino giant Crown. Crawford further stated the probity has also resulted in certain persons being approved to become “close associates” of Crown Sydney.

These approvals are a key step in the Authority’s ongoing work to ensure Crown Sydney is able to meet its undertakings for major operational, governance and structural reforms," an official Independent Liquor & Gaming Authority statement reads.

"As the prospective owner of Crown Resorts, Blackstone has been required to demonstrate the highest standards of probity as well as a commitment to deliver the full suite of operational changes recommended by the Bergin Inquiry," Crawford noted. "This commitment is vital to ensure Crown Sydney is free from criminal influence and properly manages the risks of harm associated with casino activities." 

ILGA's Chairperson Philip Crawford.

The authority’s regulatory approvals follow a meeting of Crown shareholders on May 20 that voted to accept Blackstone’s takeover offer, after which the company was also required to meet certain conditions under a private equity model of ownership.

Separately, the Authority said it has worked closely with Crown on plans for "a conditional opening of gaming" at Crown Sydney, which was blocked from launching its casino entity amid the Liquor & Gaming NSW investigation that commenced in 2020. This would allow the Authority to monitor the implementation by Crown of its obligations under revised internal control measures.

Crown Resorts agreed to Blackstone's takeover offer in February this year, with the company’s board, now chaired by Ziggy Switowski, unanimously backing the proposition. The firm is already Crown’s second-biggest shareholder, with a 9.9% stake.

Once completed, the takeover transaction will give high-profile billionaire James Packer, Crown’s major shareholder at 37% stake, an exit from the Australian giant, bringing an end to his era in the company. The American firm is acquiring Crown for AUD 8.9 billion ($6.3 billion). 

An independent inquiry into Crown Resorts last year found the company was “unfit” to hold a gaming license for its Sydney casino at Barangaroo after it heard allegations of money laundering and links to organized crime syndicates.

Commissioner Patricia Bergin said the company needed to make “sweeping changes” to its culture and corporate governance structure if it wanted to be considered a suitable operator”. Crown was only allowed to operate a hotel and restaurants at the AUD 2.2 billion ($1.6 billion) skyscraper.