According to the latest reports, the almost-AU$80-million monetary penalty that was faced by the Melbourne casino of Crown Resorts would hardly have an immediate negative impact on the property’s financial profile.
The leading provider of credit ratings, commentary, and research for global capital markets Fitch assessed the fine and its expected effects after the Victorian gambling regulatory body imposed the monetary penalty and, eventually, established that the Australian gambling giant is unlikely to suffer a lot from the ruling.
The note released by the credit rating agency earlier this week explained that, as a result of the AU$80-million fine, Crown Resorts will see its revenues’ adjusted net leverage grow from 0.2x to 0.4x on a post-pandemic basis. The expected increase would still be below the 3.0x level that Fitch codified in its Crown Resorts ratings, which, on the other hand, could make the credit rating firm consider taking down the gambling operator’s rating. For the time being, no such measure is planned by Fitch.
Fitch Does Not Plan to Downgrade Crown Resorts’ Credit Rating for Now
Previously, Fitch has been a bit doubtful regarding Crown Resorts’ decision to agree to the proposed Blackstone acquisition, citing the US private equity group’s financial performances in its domestic market. At the time, it noted that a downgrade of the Australian gambling giant would follow for sure should the proposed takeover deal with Blackstone is approved. However, the agency has not made any more comments on the matter even after the shareholders of Crown Resorts gave the nod to the acquisition.
Still, the credit rating agency highlighted the fact that the monetary penalty that was only recently imposed on Crown Resorts by the new Victorian gambling regulatory body was far lower than the adverse clause in the Australian casino company’s takeover deal with Blackstone. Fitch also noted that the fine would not weigh down on the US private equity firm’s plans to acquire the entire share package of Crown Resorts. The deal would still have to receive official approval from the local gambling regulators before it is allowed to take effect.
As Casino Guardian already reported, the Victorian Gambling and Casino Control Commission (VGCCC) issued the aforementioned fine following some adjustments brought to the law under which the newly-established watchdog was given bigger enforcement powers. As part of these powers, the regulatory body could pursue penalties of up to AU$100 million against companies that violate the gambling laws of the state.
The Melbourne property of Crown resorts suffered a monetary penalty over the breach and circumvention of a number of anti-money laundering rules and China’s currency controls in the period from 2012 to 2016. According to revelations, Crown Melbourne’s failures were linked to the China Union Pay credit and debit cards for gambling transactions, which were deliberately masked as accommodation and hotel expenses.
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Olivia Cole
