Shares in Crown Resorts Ltd (ASX: CWN) are in focus after news the company could potentially open its $2.2 billion casino in Sydney by the end of 2021. The Crown share price closed yesterday's session trading at $12.75.
Crown was deemed unfit to run Sydney's Barangaroo casino in February following a yearlong inquiry by Commissioner Patricia Bergin. The inquiry uncovered allegations of money laundering.
Now, Crown is working with the Independent Liquor and Gaming Authority (ILGA) to receive approval for a casino licence in the state of New South Wales.
Yesterday, ILGA chair Philip Crawford told media the verification of Crown's suitability to run the casino could potentially be completed by the end of the year.
The Crown share price didn't noticeably react to the news early yesterday afternoon when it was covered by a number of media outlets. Crown provided its own update regarding the matter to the ASX after market close on Thursday.
Commitments
Both Crown and Crawford said the gaming operator has committed to a number of measures in a bid to open the casino with the ILGA's approval, which it could possibly receive in the third quarter of this year.
The commitments include paying $12.5 million towards the costs of the Bergin Inquiry and working towards banning smoking indoors.
Crown must also "evaluate the necessary steps towards the introduction of cashless gaming alternatives".
It has already ceased dealings with international junket operations and agreed to pay a yearly $5 million Casino Supervisory Levy for this year and next, as advised by ILGA.
In yesterday's press conference, Crawford said Crown was on the right path, but not out of the regulatory woods yet. He said:
If we continued to meet [the resistance Crown showed the ILGA during the Bergin inquiry], it was my own thought that, it would be very hard to get them to suitability. It's just too hard to regulate someone who doesn't want to be regulated… we needed to see some good will on their part, and the ability to work with us. I must say that I've been pleasantly surprised…
I'm not here today to tell you that they're suitable, there is work to be done… first of all, there is an audit being done of their bank accounts — one of the primary focuses there is to make sure organised crime has not infiltrated the bank accounts of the Crown group…
Until we get sign-off that those accounts haven't been infiltrated then that's a key issue for us about suitability.
How long these audits will take? I don't know. It could be, probably ambitious to say, the end of June but probably it'll go just into the third quarter of the year. But, if you look back to February, there's no doubt that Crown working with us has achieved a lot.
Commentary from management
Crown's executive chair Helen Coonan commented on ILGA's confidence in Crown's potential suitability, saying it was welcome. Coonan said:
It's important to know we are well on track but I have assured the regulator there will be no complacency as we continue to embed the changes to improve our governance and compliance processes across the organisation.
Crown share price snapshot
Despite Crown's difficulties this year, its share price has performed well so far.
Currently, the Crown share price is up 32% year to date. It's also gained more than 40% over the last 12 months.
The entertainment company has a market capitalisation of around $8.63 billion, with approximately 677 million shares outstanding.
