Crown Resorts is waiting to learn its fate in Victoria and Western Australia, as authorities in both Australian states consider what actions to take for the company’s history of improprieties. New South Wales (NSW) has already suspended Crown’s license and, if similar decisions are made in the rest of the country, the operator would have to figure out how to proceed. While the sale of assets has been talked about for several months, Crown would rather go a different route and retain the properties, but lease them out to other operators.
Crown Resorts Still Under Fire
Crown has been under scrutiny for the past couple of years after multiple reports surfaced that it had facilitated an environment of money laundering, tax evasion and equipment-tampering. Each Australian state where it has conducted operations has launched an investigation to determine what response is necessary, and both Victoria and Western Australia are expected to reach their decisions soon. If the states decide, like NSW, that Crown isn’t fit to serve as a casino operator anymore, someone will need to step in and take the reins.
Who that might be isn’t yet known, but Crown CEO Steve McCann has a plan. Should the company be deemed unsuitable in the latest rounds, it would be amenable to exploring lease deals with operators so it could at least hang onto the assets, according to comments the executive made to The Sydney Morning Herald. Royal Commissioner Ray Finkelstein is expected to deliver his findings from the Victorian Royal Commission next month and Victoria is close to wrapping up its investigation. Most analysts believe the two states will follow NSW’s lead and suspend Crown, at least temporarily.
Crown Continues to Operate in Limbo
Crown has no idea what the future holds. Previous talk about the company being sold to Oaktree Capital Management or Star Entertainment Group has fizzled amid the uncertainty, but McCann wants to make sure the company is prepared for any possible outcome. Leasing the casinos is an alternative, even if it isn’t one that the company would prefer. The CEO explained, “Clearly we have to anticipate a range of scenarios and be flexible enough to respond to the scenarios that are presented; [however, that] scenario would be sub-optimal for everybody because operating an integrated resort … is better achieved with everything together. It’s not an ideal scenario but it’s not something we’d rule out if we have to head in that direction.”
There is no decisive path for Crown’s future at this point. The company has gone through several executive restructurings over the past year as it tried to show regulators that it was making improvements. However, given that the ongoing investigations have shown that company leaders were aware of most of the questionable activity taking place for years, Victoria and Western Australia might decide not to show any leniency.