Crown CEO Announces Progress Ahead of Sydney Casino Launch

Crown has reported that it has made substantial progress in implementing reforms outlined in the Bergin Report, which deemed the company unsuitable to operate a casino in Sydney's Barangaroo area. Key requirements included a AU$22.5 million settlement to the New South Wales Independent Liquor and Gaming Authority (ILGA). CEO Steve McCann expressed confidence in the company's trajectory, stating, "It's fair to say that the reform programme was well and truly under way before I joined Crown, and we have invested a lot of time and effort since then to continue on that path. I firmly believe the business has turned a corner and has been materially de-risked over the last 6 months." McCann highlighted the significant advancements on the remediation plan, including a complete overhaul of senior leadership and the board amidst ongoing challenges from COVID-19. All three of Crown's resorts are now open and operating. Crown has been under scrutiny from Victoria's Royal Commission, which also found the operator unsuitable for running a casino. An investigation in Western Australia has been extended until March 2022 to allow for additional inquiries. The company's remediation plan addresses concerns raised by regulators, focusing on areas such as culture, responsible gaming, risk management, and more. Recently appointed executives include Dr. Ziggy Switkowski as chairman, Simon McGrath as chief executive of Crown Sydney, and Danielle Keighery as chief corporate affairs and brand officer. McCann stated at Crown Sydney that gaming activities are expected to commence in early 2022, with the venue currently offering non-gaming options. The resort's two gaming areas are ready for a phased opening, subject to suitability determinations by ILGA. The staged opening will depend on current staffing levels, with Crown planning further recruitment for related roles. The gaming areas are set to feature 160 table games and 70 electronic table games. The hotel section of the resort has been operational since November, employing 1,300 staff during the pandemic. All three domestic venues in Perth, Sydney, and Melbourne have reopened with mandatory vaccination requirements for guests. Melbourne reported a 75% increase in main floor gaming revenue and a 65% increase in non-gaming revenue for the two weeks ending on December 5, compared to the latter half of 2020. Perth saw an 8% increase in gaming revenue and a 31% increase in non-gaming revenue. Crown has experienced a rise in revenue from local customers, with 100% of revenue coming from domestic business in 2021, up from 87% in 2020. Meanwhile, VIP program revenue fell to 0% this year, down from 13% in 2020. Crown is also considering a takeover proposal from Blackstone, a private equity firm valuing the company at approximately AU$8.46 billion. While Crown rejected the initial offer for lacking compelling value, they have invited Blackstone to present a new proposal. McCann commented on the Blackstone bid, mentioning, "We do now have an offer. We've made it clear that we don't think that the offer is compelling value. We'll be looking at every alternative to try and maximise value, but the very first step is getting open in Sydney and making sure the market can see the value of these fantastic assets and get trading up post pandemic."