STAR WITHDRAWS CROWN MERGER BID

The Star Entertainment Group has withdrawn its bid to merge with Crown Resorts after a royal commission in Victoria heard Crown had been involved in illegal conduct.

Star Entertainment – which operates the Star casinos in Sydney and on the Gold Coast, and Treasury Brisbane – submitted a merger proposal to its main rival in May.

If successful, it would have created a $12 billion gambling giant.

But this morning it told the ASX “issues raised at Victoria’s Royal Commission into Crown Melbourne have the potential to materially impact the value of Crown, including whether it retains the licence to operate its Melbourne casino or the conditions under which its licence is retained”.

Star said the “uncertainty surrounding Crown is such that The Star is unable to continue at the present time with its Proposal in the form as announced on 10 May 2021”.

In response, Crown Resorts issued a note to the ASX which said it remained “willing to engage with The Star in relation to a potential merger” on terms acceptable to both parties.

Evidence of money laundering, infiltration from organised crime

The royal commission into Crown Resorts was announced by Victorian Premier Daniel Andrews in February.

It followed evidence before a New South Wales inquiry and years of media reports exposing serious issues at the casino and the gambling regulator.

Western Australia has also begun a separate royal commission into the gambling giant but has an additional focus on whether regulation of the casino is adequate.

Earlier this week, the commission’s lead lawyer said Crown should not hold Victoria’s sole casino license due to evidence it engaged in illegal activities, encouraged by a culture that put profit ahead of integrity.

Counsel assisting the inquiry, Adrian Finanzio SC, said in his closing submission that evidence revealed illegal and highly inappropriate conduct by the casino.

He added Crown’s executive chair Helen Coonan and chief executive Xavier Walsh were not suitable to lead the company’s reform.

Crown has admitted its accounts were used for money laundering, that overseas junket operations were infiltrated by organised crime in Asia, and that it had underpaid tax.

Crown may owe the state nearly half a billion dollars in unpaid taxes, the inquiry heard. It has agreed to repay $50 million.

Mr Finanzio said Crown had not tried hard enough to combat money laundering and that its cash was “carried by money mules serving criminal interests”.

The royal commission was meant to hand down its recommendations by August 1.

The deadline was pushed back to October 15 after serious evidence emerged during the first weeks of public hearings.

Crown’s legal team will deliver its closing arguments to the Commission early next month.

Source: www.abc.net.au/news/2021-07-23/star-withdraws-crown-merger-proposal/100317052