The Crown Resorts Ltd (ASX: CWN) share price is surging higher today on news the comany will retain its casino licence following the Victorian royal commission into its suitability to run its Melbourne Casino.
However, commissioner Ray Finkelstein's final report calls for a major change to the company's share register. Additionally, the Victorian government has gone beyond the commission's recommendations to impose strict regulations on the company's casino licence.
It's safe to say Crown isn't out of the woods in Victoria yet.
At the time of writing, the Crown share price is $10.43, 7.97% higher than its previous close.
Here are the long-term changes Crown shareholders should know of in the wake of the 8-month royal commission.
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Crown share price might face another fight in 2 years' time
It appears Crown, and its share price, hasn't been let off the hook.
The company is facing several reforms over the next 24 months to retain the leniency shown by commissioner Finkelstein. He recommended that Crown's casino licence continue to hang in the balance as the company undergoes proposed changes.
Commissioner Finkelstein recommends a "special manager" be put in place at Crown. The manager will oversee the reforms and report back to the regulator. The regulator will then decide if Crown keeps its licence.
However, the Victorian government has gone "beyond the recommendations of the Royal Commission" this morning.
The state government announced it has initiated laws that will automatically cancel Crown's casino licence if the regulator isn't "clearly satisfied" Crown is suitable to operate Crown Melbourne. An announcement stated:
The onus will be on Crown to clearly demonstrate why its licence should not be cancelled by the regulator.
Stephen O'Bryan QC will be appointed as Crown's special manager if the Casino and Gambling Legislation Amendment Bill 2021, introduced to the Victorian Parliament today, is passed. O'Bryan was Victoria's first independent broad-based anti-corruption commissioner.
The bill is pushing to implement 9 of commissioner Finkelstein's 33 recommendations.
It proposes to ban junkets and impose stronger regulatory obligations on casino operators. It also looks to establish the Victorian Gambling and Casino Control Commission.
Further, it will increase the maximum penalty for disciplinary action under the Casino Control Act from $1 million to $100 million.
The Victorian government said it supports the remaining recommendations in principle. It will analyse and consult on them before further addressing them in legislation planned for next year. Safe to say, the Crown share price will be in focus then too.
Potential changes to Crown's shareholding
Additionally, the company's shareholding could undergo a drastic change if reforms proposed by the royal commission are put in place.
Commissioner Finkelstein has recommended the Casino Control Act be amended to stop any entity from owning more than 5% of a casino operator's outstanding shares.
However, the report recommends the ownership limit shouldn't apply to any entity that already holds more than 5% of a casino operator — with the exception of James Packer's Consolidated Press Holdings.
If implemented, the recommendation would mean Consolidated Press Holdings would need to sell most of its 37% holding in Crown.
Crown share price snapshot
It's not just the Victorian royal commission that could have been weighing on the Crown share price lately.
The company is also battling to get control of its Sydney casino and is waiting for the findings of a Western Australia royal commission.
The company's shares are currently trading for 5% more than they were at the start of 2021.
