The proposed merger between The Star Entertainment and Crown Resorts will probably put more pressure on state Governments, gambling regulatory bodies and casino operators across Australia, especially when it comes to permanently end the use of junket operators that bring foreign customers to the country’s casinos.
The use of junket operators, also known as “junkets”, has already been seriously diminished because of the coronavirus pandemic that resulted in closures of national borders, but the recently published Commissioner Bergin’s inquiry in the state of New South Wales (NSW) once again emphasized how important it is to see this practice ended once and for all. Furthermore, the report pushed Crown Resorts to publicly say it would no longer work in collaboration with so-called junket operators, as the inquiry found such partnerships seriously increased the risks of organised crime involvement and money laundering.
Now, the merger offer that The Star Entertainment made to Crown Resorts is expected to renew the focus on more serious reforms for the Australian casino sector, which have also been recommended by NSW Commissioner Bergin. The changes included the establishment of a new independent casino authority in New South Wales, the implementation of stricter suitability requirements, as well as suspending deals between Australian casinos and junket operators.
Possible Deal between The Star Entertainment and Crown Resorts Marked with Uncertainty
Later this week, Phil Crawford, the chairman of the NSW Independent Liquor and Gaming Authority, is expected to make a public statement regarding upcoming probity checks for the operators that have expressed interest in Crown Resorts.
The gambling and liquor regulator in the state of New South Wales is also halfway through negotiations with Crown Resorts over some options that can make the Australian gambling giant once again suitable to hold a casino licence in the state after the damning report of Commissioner Bergin found it no longer suitable to do so.
The conditions under which Crown Resorts’ suitability for holding its Barangaroo casino licence could be restored include the company’s future relationship with junket operators, as well as some governance changes that would address the threat of links to organised crime and money laundering.
It still remains uncertain how such measures would apply to a merged entity. Furthermore, such a deal would also renew some questions regarding more effective regulation of casinos across the newly-formed company’s board on one hand, and how Australian states can improve their coordination of regulation, on the other hand.
The ongoing bidding war could take a year or so, and the whole situation with Crown Resorts still remains unclear. The main rival of The Star Entertainment – the US private-equity firm Blackstone – is still far from getting approval, not to mention that more bidders interested in the acquisition of the Australian casino company may emerge. On the other hand, The Star Entertainment has faced some criticism because of its own links with junkets.
A few months ago, the Chief Executive Officer of The Star Entertainment, Matt Bekier, explained that the casino operator intended to become more focused on its premium gamblers at its domestic market and overseas. Mr Bekier also shared at the time that the junket business was dead and the company would no longer use junket operators in order to attract customers to its casino venues.
- Author
Olivia Cole
