Things seem to be turning around at troubled gambling giant Crown Resorts under the ownership of US private equity giant Blackstone. Still, the company is expected to face a critical few months due to ongoing controversy over some of its operations.
Currently, Crown Resorts is headed by Ciaran Carruthers in the chief executive officer position and chaired by Bill McBeath, a veteran in the US casino industry. Following some impending critical regulatory difficulties, the Australian casino giant’s directors have warned that the company was facing a material uncertainty that might overshadow the group’s ability to continue as a going concern.
The aforementioned turmoil is associated with the upcoming assessments of Crown Resorts’ operations that a few gaming regulators across the country are set to issue in regard to the company’s suitability to hold a casino licence.
The two-year tenure of Crown Melbourne’s special manager Stephen O’Bryan is set to expire at the end of 2023. Then, he is expected to lodge his final report on the casino company’s operations to the local gambling regulatory body, with the watchdog set to make a final decision on whether Crown Resorts would be allowed to keep its casino licence or not. The company is set to face similar procedures in Sydney and Perth, with the gambling giant indicating that decisions for its venues in Melbourne and Sydney were not expected until early-mid 2024, and until later in 2024 for Crown Perth.
Australian Gambling Giant Faces Financial Troubles in the Wake of Regulatory Failures
Crown Resorts has been on the road to financial stability in the last few months. it piled losses of approximately AU$199 million in the 2023 financial year. In comparison, its losses amounted to about AU$1 billion the year before. Its revenues rose from AU$1.9 billion in the previous year to AU$2.78 billion in the 2023 financial year.
The remediation process, improved compliance measures, and financial penalties at the company’s casinos in Australia have been considered responsible for the loss experienced by the group over the last financial year. On the other hand, the increased cost of living has also taken its toll as it wiped out the company’s profits for a third consecutive year.
As previously reported by Casino Guardian, Crown Resorts has been hit by the negative effects of the Covid-19 pandemic. At the time, the casino giant was hit with a number of financial penalties and agreed to undertake an expensive overhaul to make sure it complied with federal and state laws after several probes unveiled historic anti-money laundering (AML) and counter-terrorism (CT) financing failures.
Despite the financial results’ improvement, the company’s auditor KPMG has agreed with Crown Resorts’ assessment of the coming months and also warned that the business could face material uncertainty. The troubled Australian gambling giant’s financials were audited by Rachel Gatt, a KPMG partner.
Considering the Crown Resorts board’s warning and the warning from the company’s auditor, it seems that the next few months could be tough for the operator.
- Author
Olivia Cole
