Blackstone edges closer to Crown acquisition after Western Australia approval

| By Robert Fletcher
SS Silver, an entity owned by funds managed or advised by private equity giant Blackstone, has taken a step closer to completing its acquisition of Crown Resorts after the proposed deal was approved in Western Australia.

The Gaming and Wagering Commission of Western Australia (GWC) and Tony Buti, Racing and Gaming Minister in Western Australia, both signed off on the acquisition agreement earlier today.

Blackstone required local approvals in Western Australia, New South Wales and Victoria in order for the deal to move forward. Authorities in New South Wales and Victoria also gave the green light to the proposal this week.

Following these regional approvals, a final court hearing date in relation to the purchase has been scheduled for 15 June. Should the court also approve the acquisition, this would allow Crown to announce a timetable for completion of the deal.

Clearance in Western Australia means that should the acquisition proceed as expected, then Blackstone would assume both ownership and control of the Crown Perth property.

Upon approving the deal, Minister Buti set out a series of expectations for Blackstone’s management of Crown, including conducting activities with the “highest standard of governance and operations”, as well as investment in Crown Perth.

These would be in line with the recommendations set out during the Perth Casino Royal Commission, which in February this year found Crown was “unsuitable” to operate the Perth facility. The Commission opted not to recommend revoking its licence and instead proposed a series of measures for the operator. 

Other conditions Blackstone will face if the deal completes include enhanced reporting of anti-money laundering and responsible gambling activities, further auditing requirements, and an obligation to report any investigations by any Australian or overseas regulators.

Non-interference requirements would also be put in place to prevent any of Blackstone’s institutional investors from involvement in the day-to-day operations of Perth’s Crown Casino, while Blackstone could not change its corporate structure and funding arrangements without providing prior notice and relevant approvals.

“As the prospective new owner of the Perth Casino, Blackstone will be required to meet a number of stringent conditions,” Buti said. “These conditions align with a number of the recommendations stemming from the recent Perth Casino Royal Commission.

“The State Government has already made significant improvements to the regulatory regime and remains committed to establishing an even tougher regulatory and governance framework to ensure whoever owns or runs Perth’s casino is held to account.

“The conditions on Blackstone, combined with upcoming reforms, will ensure appropriate standards are upheld at Perth’s Casino.”

Gaming and Wagering Commission chair Lanie Chopping added: “Blackstone has been subject to an extensive probity assessment by the Gaming and Wagering Commission.

“This detailed and complex process undertaken since the application was submitted last year involved the comprehensive independent assessment of relevant Blackstone entities in accordance with the legislative requirements.

“The Gaming and Wagering Commission’s probity approval has been granted subject to a number of conditions designed to ensure that the Commission has oversight and the capacity to monitor any change in licensee management or ownership.”

Blackstone first submitted a bid of AUS$8.02bn (£4.63bn/€5.33bn/US$5.64bn) to acquire Crown in 2021. This initial bid was rejected but an increased bid of $8.87bn was approved by the Crown board.

The offer came at a time when Crown was faced with a number of inquiries. In February 2021, Crown was deemed unsuitable to operate a casino in Barangaroo, Sydney, after an investigation uncovered evidence of money laundering in its facilities.

Later in the year Crown was also ruled as unsuitable to operate a casino in Victoria, with an investigation ruling Crown had engaged in “illegal, dishonest, unethical and exploitative” conduct.

Last month, the majority of shareholders in Crown Resorts voted in favour of the takeover. Some 92.05% of shareholders present and voting were in favour of the acquisition, and 99.91% of the votes cast by shareholders backed the acquisition.

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