The Star Entertainment Group has dropped its offer to merge with its Australian rival Crown Resorts after the Victorian Royal Commission heard the casino giant had been involved in illegal conduct.
As Casino Guardian reported, in May, Star Entertainment, which currently operates its casinos in Sydney and on the Gold Coast and Treasury Brisbane, made a merger proposal to its main competitor. If successful, the deal would have created a gambling conglomerate worth about AU$12 billion.
However, earlier today Star Entertainment informed the Australian Securities Exchange (ASX) that some issues, which had been raised by the state’s Royal Commission investigating Crown Resorts could potentially affect the value of the Australian casino giant, including in case its Melbourne casino’s operating licence is retained. As explained by the company, it still believes in the benefits that the proposed deal would have had but the uncertainty surrounding the ailing operator is too big for The Star to keep its merger proposal in the form announced on May 10th, 2021.
In its turn, Crown Resorts issued a note to the ASX explaining that it was still willing to engage with The Star in terms of a potential merger agreement on conditions that would be acceptable to both companies. The company also shared it will continue to take into consideration any proposal it receives from now on.
Assisting Counsel Says Crown Melbourne Should Be Stripped of Its Operating Licence
Earlier this week, the Royal Commission was told that Crown Resorts should be stripped of its Melbourne casino operating licence because its efforts to reform its corporate culture were not enough.
The Royal Commission into the largest casino operator in Australia was officially announced by the Premier of Victoria Daniel Andrews in February 2021. The move followed the evidence received during the inquiry in Crown Resorts in the state of New South Wales (NSW), as well as years of media reports exposing some serious issues at the gambling operator.
Another Royal Commission and a separate investigation were established in Western Australia as well.
On July 20th, the assisting counsel of the Commission, Adrian Finanzio SC, recommended that Crown Resorts is stripped of its casino licence in Melbourne due to its proven engagement in illegal activities and poor corporate culture. Currently, the company holds the only casino licence in the state of Victoria. According to Mr Finanzio, the evidence found during the investigation revealed highly inappropriate conduct by the casino.
Previously, Crown Resorts itself has admitted that its bank accounts were used for money laundering. Furthermore, the gambling company also shared that the services of foreign junket operators it used in order to attract more visitors were infiltrated by organised crime in Asia. The casino giant also admitted that it had underpaid tax to the local authorities. The amount it owes to the state may amount to almost half a billion dollars, as heard by the inquiry. So far, Crown Resorts has agreed to repay AU$50 million.
According to the Royal Commission’s assisting counsel, the Australian casino giant had not made enough efforts to combat illegal money laundering. The deadline for the Victorian Royal Commission to announce its decision on the fate of Crown Melbourne was pushed back to October 15th.
- Author
Olivia Cole
