Crown Resorts

Crown Resorts Limited is one of Australia's largest gaming and entertainment groups which had, in April 2018, a market capitalisation of just over A$8.7 billion.

Crown Resorts Limited
Public
Traded asASX: CWN
ISINAU000000CWN6 
IndustryGaming, Tourism
PredecessorPublishing & Broadcasting Limited
Founded31 May 2007 (2007-05-31)[1]
FounderJames Packer 
HeadquartersSouthbank, Melbourne, Australia
Key people
Robert Rankin - Executive Chairman[2]
Ken Barton - Chief Executive Officer and Managing Director[3]
Revenue A$4.71 billion (2014-15) [4]
OwnerJames Packer (36.8%)
Blackstone Group (9.99%)
SubsidiariesCrown Melbourne Limited
Crown Perth Limited
Websitecrownresorts.com.au
Crown Melbourne serves as the global corporate headquarters

Crown wholly owns and operates two of Australia’s leading gambling and entertainment complexes, Crown Melbourne and Crown Perth.

History

The company was established in 2007 when Publishing & Broadcasting Limited (PBL) divested its gambling assets to Crown Limited. PBL was renamed Consolidated Media Holdings, retaining all of the remaining assets.[5]

In December 2007, Australian gambling company Crown Limited agreed to buy CCR for $1.75 billion.[6] The agreement was ended in March 2009, however, with Crown instead buying a 24.5 percent stake in the company for $370 million, and paying a $50 million termination fee.[6]

In 2008, Crown attempted to enter the Las Vegas gambling market by acquiring a 19.6 per cent stake in Fontainebleau Resorts for US$250 million, which resulted in a total loss the following year when other investors withdrew US$800 million financing, resulting in bankruptcy applications.[7] This was one of a succession of similar major losses in Gateway Casinos, Harrah's Entertainment and Station Casinos from which a total of $547.5 million was written off.[8]

In September 2013, the Sri Lankan government gave approval to Crown's then chairman and largest shareholder, James Packer, to invest in Crown Sri Lanka in the heart of the Sri Lankan capital Colombo. The project was to be completed by 2015. However, when a new government took office, President Maithripala Sirisena canceled all three casino licenses awarded by the previous administration; including the Crown Resorts project.[9]

In August 2014 Betfair completed the sale of their 50% stake in Betfair Australia to venture partner Crown Resorts, one of Australia's largest gambling and entertainment groups.[10]

On 5 August 2014 Crown bought the site of the New Frontier Hotel and Casino on the Las Vegas Strip for $280 million with the intent to build a new hotel beginning in 2015.[11]

In December 2014, James Packer signed a deal with Matthew Tripp, which gained Packer control over Tripp’s online betting platform BetEasy.[12]

On 26 June 2015, Crown officially announced that the new $6 billion hotel, called Alon Las Vegas, will be located in the former New Frontier site and plan to open it in 2018.[13] Crown announced in December 2016 that it was halting the project and seeking to sell its investment.[14]

In 2016, ground broke on Crown Sydney and will open in 2020.

In February 2017, Barry Felstead replaced Rowen Craigie as CEO Crown Resorts Melbourne.

On 21 March 2018, James Packer resigned as an executive chairman of Crown Resorts.[15]

In May 2019, Packer agreed to sell 20% of Crown’s shares, representing nearly half his personal stake in the company, to Melco Resorts & Entertainment, for A$1.76 billion (U.S. $1.22 billion). Melco is led by Lawrence Ho, Packer’s former joint venture partner in Melco Crown Entertainment. [16] On August 8, 2019, the gaming regulator in the state of New South Wales announced that it was conducting an inquiry into Melco’s deal for Crown’s shares[17] based on new information that Lawrence Ho was until June 28, 2019 a director of a company with which Crown was forbidden to associate.[18] The inquiry will also look into allegations made on a recent broadcast of Australia’s 60 Minutes television program.

Holdings

Former

Philanthropy

The company's Crown Resorts Foundation makes grants to the arts, community welfare, education, health care and the environment. In July 2014 Crown's chairman and largest shareholder James Packer launched a new initiative, the National Philanthropic Fund, to which his family foundation, and the Crown foundation would each contribute $100 million over ten years to support community projects in Australia.[23]

Controversies

Illegal advertising

In April 2016, the company's joint venture with Matthew Tripp, CrownBet pleaded guilty to five counts of breaching laws by publishing illegal betting advertising that offered inducements for NSW residents to gamble.[24][25][26][27] According to NSW Department of Justice, CrownBet "sought to have the matters finalised without conviction in Downing Centre Local Court yesterday but Magistrate Joanne Keogh said convictions were necessary for general deterrence to others in the industry and to protect the vulnerable. CrownBet was convicted of the five offences and ordered to pay a total of $10,500 in fines and also ordered to pay L&GNSW legal costs of $10,000."[24][26]

60 Minutes 'Crown Unmasked'

In July 2019, Nine Network's investigative TV program 60 Minutes aired a report titled Crown Unmasked which made allegations that Crown had violated Chinese law by promoting its casinos to mainland gamblers.[28] The investigation, which was assisted by The Age and The Sydney Morning Herald newspapers (which became sister businesses of Nine Network after Nine Entertainment Co. acquired Fairfax Media in 2018) and featured comments from former Crown employees, also questioned Crown’s relationships with certain junket operators — the middlemen who help recruit VIP gamblers and act as credit agents to get around China’s capital controls — that have been linked to Hong Kong’s triads.[29] The investigation also revealed the existence of an arrangement with Australia’s Department of Home Affairs to speed up processing of short-stay visa applications by Crown’s VIP gamblers.[30] Crown denied the report's claims, publishing advertisements in local newspapers calling the investigation “a deceitful campaign” that relied on “unsubstantiated allegations, exaggerations, unsupported connections and outright falsehoods.”[31] Federal and state authorities, including the Australian Commission for Law Enforcement Integrity and the Australian Criminal Intelligence Commission, have opened probes into the allegations.[32]

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References
  1. Crown Resorts Limited Archived 6 July 2011 at the Wayback Machine at ASIC National Names Index
  2. "Board of Directors | Crown Resorts - Crown Resorts". crownresorts.com.au. 30 June 2008. Archived from the original on 16 November 2012. Retrieved 7 August 2016.
  3. "Senior Management | Crown Resorts - Crown Resorts". Crownlimited.com. Archived from the original on 1 August 2010. Retrieved 7 August 2016.
  4. "Crown Limited Annual Report 2015" (PDF). Crownresorts.com.au. Retrieved 7 August 2016.
  5. "PBL Scheme and Demerger Scheme – Market Update" (PDF). 30 November 2007. Retrieved 16 December 2007.
  6. Stutz, Howard (13 March 2009). "Plan to buy Cannery Casino Resorts falls apart". Las Vegas Review-Journal. Retrieved 23 March 2012.
  7. Carson, Vanda Packer's US casino gamble in $250m loss Sydney Morning Herald, 11 June 2009
  8. Tabakoff, Nick Why James Packer attracts so much publicity The Australian Business, 7 March 2009
  9. "Sri Lanka's new government cancels new casino licenses". News.worldcasinodirectory.com. 3 February 2015. Retrieved 7 August 2016.
  10. "Betfair sells 50pc stake in Australian business". 13 August 2014. Retrieved 23 March 2014.
  11. Business (5 August 2014). "James Packer snaps up Las Vegas site". Smh.com.au. Retrieved 7 August 2016.
  12. "James Packer to Work in Collaboration With Matthew Tripp". Casino News Daily.
  13. "Vision for Alon Las Vegas, resort on former New Frontier site, is filed with county". Vegas Inc. 26 June 2015. Retrieved 7 August 2016.
  14. "Alon management exploring options after loss of backer". LasVegasSun.com. 15 December 2016. Retrieved 15 December 2016.
  15. Williams, Perry (21 December 2015). "James Packer resigns as director of Crown Resorts". The Sydney Morning Herald. Retrieved 23 July 2018.
  16. Nainan, Nikhil; Master, Farah (30 May 2019). "Casino operator Melco to buy 20% of Crown Resorts from billionaire..." Reuters. Retrieved 8 August 2019.
  17. "NSW Independent Liquor and Gaming Authority inquiry into Barangaroo restricted gaming facility licensee and its close associates". Liquor & Gaming Authority NSW. Retrieved 8 August 2019.
  18. Davies, Anne; Butler, Ben (8 August 2019). "Packer sold share of Crown Resorts to tycoon who was director of 'banned' company". The Guardian. Retrieved 8 August 2019.
  19. "Archived copy". Archived from the original on 16 September 2009. Retrieved 2009-01-03.CS1 maint: archived copy as title (link)
  20. "PBL announces split into separate listed gambling and media companies" (PDF). 8 May 2007. Archived from the original (PDF) on 27 September 2007. Retrieved 16 December 2007.
  21. "Crown Confirms it is in Discussions To Develop an Integrated Resort in Sri Lanka" (PDF). Asx.com.au. Retrieved 7 August 2016.
  22. "James Packer Wins Casino Deal in Sri Lanka". The Australian. Retrieved 7 August 2016.
  23. "James Packer leaves $200 million on the table". The Daily Telegraph. Retrieved 25 July 2014.
  24. "James Packer's Crownbet Fined For Illegal Ads". The Australian. Retrieved 7 August 2016.
  25. "CrownBet convicted of illegal advertising". Skynews.com.au. 22 April 2016. Retrieved 7 August 2016.
  26. "Crownbet Convicted of Illegal Advertising". Justice.nsw.gov.au. 22 April 2016. Retrieved 7 August 2016.
  27. "CrownBet Cops To Illegal Come-Hither Inducements | Online Gambling News". CalvinAyre.com. Retrieved 7 August 2016.
  28. "Crown Unmasked". 60 Minutes. 28 July 2019. Nine Network.
  29. Butler, Ben (1 August 2019). "Victorian government orders investigation into Crown casino crime allegations". The Guardian. Retrieved 8 August 2019.
  30. Harris, Rob; Crowe, David (29 July 2019). "Home Affairs had an agreement to fast-track visa applications for Crown". The Age. Retrieved 8 August 2019.
  31. Kaye, Byron (1 August 2019). "Crown Resorts takes out newspaper ads in attack on 'deceitful campaign' | Financial Post". Reuters. Retrieved 8 August 2019.
  32. McKenzie, Nick; Toscano, Nick; Tobin, Grace (31 July 2019). "Crime agency reveals a major investigation into organised crime at casinos". The Age. Retrieved 8 August 2019.
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