Western Australia is the missing link in US private equity giant Blackstone's planned $8.9 billion takeover of Crown Resorts gaming empire, including the Perth casino.
On Thursday, Crown announced that New South Wales and Victoria's gambling regulators had given the green light to the takeover.
But WA's casino watchdog, the Gaming and Wagering Commission (GWC), and the Racing and Gaming Minister are yet to give Blackstone approval — which is crucial for the deal to proceed.
The WA government is also keeping its cards close to its chest about how it plans to clean up money laundering, criminal infiltration and problem gambling at Crown Perth, three months after it was handed a royal commission report with 59 recommendations on how to do so.
It is yet to outline its full response to the Perth Casino Royal Commission and is still drafting its first tranche of laws to address some of the problems outlined in the report and which have been going on for many years.
New laws to be introduced imminently
These laws will allow the appointment of an independent monitor to oversee the state's monopoly casino and its operator, Crown Resorts.
"I will be introducing the legislation to parliament very, very shortly," Racing and Gaming Minister Tony Buti said.
"But we're going to take this seriously and carefully consider all the recommendations and make sure we get it right."
The royal commission was called last year in response to the Bergin inquiry in New South Wales, which found that international criminal syndicates were believed to have laundered hundreds of millions of dollars through Crown Perth from 2014, or earlier.
Its final report identified failings by the WA government and the GWC in overseeing the casino, as well as failings by Crown in its responsibilities to prevent money laundering, criminal activity and gambling-related harm.
"The public of Western Australia are entitled to have confidence that the licensee of Perth Casino and its associates will conduct and organise the gaming operations of Perth Casino in a socially responsible, lawful and efficient manner," it said.
Casino monitor some way off
An independent monitor was one of the key recommendations of the report, which found that Crown was not suitable to hold WA's only casino licence but should be given two years, under the supervision of the monitor, to show it had fixed its problems and was worthy of a licence.
It is unlikely the laws to enable the appointment of an independent monitor will be introduced to parliament until after the winter recess, even though the WA government received the final report of the royal commission in early March.
A spokesman for Dr Buti said the laws, which would also give the minister and the GWC powers to fix problems at the casino, were still being drafted.
"Under the proposal, the special monitor will have the appropriate powers to direct the casino to act on its recommendations," he said.
"Meanwhile, there will be additional powers for the [GWC] to regulate the casino."
In Victoria, where a royal commission last year also found that Crown was unfit to hold a casino licence, the government has appointed a special manager to oversee Crown Melbourne for two years.
After then, they will report to the regulator who will determine whether the company had reformed its operations enough to be deemed suitable to hold a casino licence.
Fears over return to 'business as usual'
Charles Livingstone, a gambling researcher and associate professor at Monash University in Victoria, said this manager had wide powers and the capacity to direct the operations of the casino quite closely.
But he said he feared that the casino would return to "business as usual" once the two-year period was over.
"Having a special manager in place is an important development and obviously means they've got to be on their toes," he said.
"I expect they will be on their toes and they'll stick to the book for the time being.
The Victorian Government has also given stronger powers to its casino watchdog, including allowing it to impose bigger fines.
For example, last month it fined Crown Melbourne $80 million for a breach of casino laws over its use of China Union Pay credit cards, which allowed the illegal transfer of funds from China for gambling.
Blackstone takeover could come before reforms
By the time WA's first tranche of casino reform laws are likely to pass through the Labor-dominated parliament, Crown Perth could be operated by Blackstone, whose takeover of Crown Resorts has been given the green light by shareholders.
But this deal depends on Blackstone being given the stamp of approval by the GWC, which has been considering the company's application since December.
The deal will also need Dr Buti's blessing.
Dr Buti's spokesman said he had not met with Blackstone but had met with Crown about the royal commission and "the need for Crown to remediate".
"While the WA government welcomes constructive engagement, neither Crown nor Blackstone will influence the WA government's response to the Royal Commission," the spokesman said.
"The full response will establish a regulatory regime and governance framework to ensure — regardless of who owns or runs Perth's casino — is held to account."
Dr Livingstone said it was unclear what Blackstone's long-term plans were for the Australian casinos.
"Essentially they're the sort of company that has a reputation for buying assets and dividing up into bits they can exploit to the max," he said.
"I wouldn't be surprised if they bought them and became landlords for somebody else down the track who will operate them."
Questions over some recommendations
Although the new laws are yet to be introduced to the WA Parliament, there have already been some changes in the regulation and operations of the casino since the WA royal commission started.
For example, there have been new appointments to both the GWC, including royal commissioner Colin Murphy, and Crown's executive ranks and boards.
But it is still unknown whether the WA government will implement some recommendations targeted at reducing gambling-related harm but which could hurt casino revenue, including:
- Applicants to the high-roller Pearl Room having to prove they had the finances to gamble – and show this on a regular basis
- Time limits for playing electronic gaming machines (EGMs), with a compulsory break after three hours of play, no more than 12 hours' play per 24 hours and no more than 28 hours' play a week
- Reduce the EGM minimum bet size to $10
- EGM players to pre-set weekly loss and time limits for gambling
- Mandate carded play on EGMs, which could highlight potential gambling-related harm and decrease the risk of money laundering.
