Crown Resorts' Chief Executive Boosts Company with Plans for Substantial Renovations by New Proprietor
The largest investment firm in the world, Blackstone, is issuing warnings about a possible credit squeeze in the US that could negatively impact the global economy. This won't deter Blackstone from pouring funds into one of their newest acquisitions, the Australian casino operator Crown Resorts.
In 2021, Blackstone acquired Crown after founder and primary shareholder James Packer agreed to sell the company. The acquisition came after an official probe uncovered violations of anti-terrorism financing and anti-money laundering laws. Although the probe found that Crown wasn't equipped to manage its casino operations, it managed to keep its licenses in New South Wales, Victoria, and Western Australia.
Blackstone remained hesitant to invest heavily in Crown due to ongoing legal issues. However, they're now ready to transform Crown Melbourne into a top-notch casino.
A New Dawn
When visiting the location for the first time since purchasing Crown, Blackstone President Jon Gray shared his belief with The Australian that the property has the potential to be one of the best casinos in the world. He acknowledged improvements still need to be made despite the long-standing popularity of the flagship property in Melbourne.
"We want to be a best-in-class entertainment company and hotel business," Gray stated about Crown Resorts in Australia. "We understand that there was a lot that wasn't done right and we've got to come in here and operate at the highest standard, the highest standard from a compliance standpoint, but then make them as attractive as possible to customers."
Gray sang praises for Crown Melbourne, calling it a unique spectacle due to its scale. He emphasized the city's notable progress and expressed his desire to significantly boost the property's assets. He also underlined the importance of these improvements in both the casino and the hotel industries.
Gray stated that due to the recent legal obstacles Crown has faced regarding its casino licenses in Melbourne, Sydney, and Perth, the company has been given a two-year leeway in each market to refurbish its public image. He believes Crown is meeting these requirements up to this point.
Gray believes Crown has a significant role to play in the flourishing tourism industry in Australia. He didn't reveal any specific changes, but stated, "It's a new day for the company".
Hang On for a Wild Ride
Gray made his comments while in Australia for the second yearly Australia's Economic Outlook event at Crown Sydney. The event, focusing on business affairs in a global economy, is organized by Sky News and The Australian and took place on Friday.
Gray doesn't believe the US recession will be as severe as the global financial crisis experienced a few years ago, but anticipates tighter borrowing practices across the banking industry.
He highlighted that even though global inflation is declining, it remains more restrictive than anticipated in the US and Europe. This could have consequences for the regional banking system in the US. The recent collapse of First Republic Bank and Silicon Valley Bank has already caused depositors to withdraw their funds from these financial institutions.
Gray also mentioned that the banking system is built on a faulty premise. He stated that the banking system relies on a certain level of activity to keep credit facilities available. As the activity decreases, it creates an impact on the lending sector. This means lenders will be pickier in their approvals. On top of this, the rapid decline in commercial property investments could make their selectiveness even stricter.
These ripples will disrupt the gaming industry as well, albeit not immediately. If commercial real estate becomes too expensive and cannot be used for growth, there will be an increased push for a move toward online gaming, according to Grey.
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