Bally’s Corp has received probity approval from the regulators in the Australian states of New South Wales (NSW) and Queensland, clearing the path for the United States-based casino business to take over troubled Australian gaming firm The Star Entertainment Group Ltd.
Shareholders of Star Entertainment approved in June an AUD300 million (US$193.5 million currently) rescue package.
The rescue bid is being led by Bally’s, and involves also the Australian conglomerate Investment Holdings Pty Ltd. The latter company, currently Star Entertainment’s largest shareholder, will subscribe for AUD100 million of the aggregate amount in the exercise.
Star Entertainment runs its core properties The Star Sydney (pictured in a file photo), and The Star Brisbane, in respectively NSW and Queensland.
In a Friday filing, the Australian casino firm said the approvals from the two state regulators “will now enable the conversion of Bally’s and Investment Holdings’ AUD300 million investment … into equity and the subsequent appointment of nominee directors” to the Start Entertainment’s board.
Star Entertainment said it “currently expects this to occur in the coming days,” with an update to be provided at the company’s annual general meeting on November 25.
Star Entertainment’s chairman, Anne Ward, said in prepared remarks that the company was “very pleased” to have received all regulatory approvals necessary for the investors to complete the strategic investment in the group.
“This is a critical step in The Star’s progress towards a return to suitability and financial stability,” she added. “We look forward to working with each of Bally’s and Investment Holdings to facilitate an orderly transition and to provide a pathway for a successful future for The Star.”
In a Friday statement, the NSW Independent Casino Commission (NICC) announced that Bally’s had successfully passed a comprehensive probity investigation, which assessed “a range of both financial and non-financial factors related to the company’s suitability and the suitability of key individuals involved in Bally’s”.
The Bally’s proposed corporate and individual close associates “have today been approved as ‘suitable persons’ to be associated with the management and operation of The Star Sydney casino, subject to appropriate conditions,” stated the regulator.
The regulator also said Bally’s had submitted a plan to improve the Star Entertainment’s financial performance, “which it will be required to report back on regularly as a condition of the approval”.
The announcement cited NICC’s chief commissioner, Philip Crawford, as saying: “Both the close associate approvals and the major change approval for The Star will allow Bally’s and Investment Holdings to move forward with their financial and operational commitments in respect of The Star which we anticipate will be happening very soon.”
In a separate statement, the attorney-general of Queensland, Deborah Frecklington, said the state’s Office of Liquor and Gaming Regulation had “deemed both Bally’s Corp and Investment Holdings to be suitable entities”.
“Following this investigation, and after careful review of the material presented to me, I have now granted the necessary regulatory approvals, which will allow Bally’s Corp and Investment Holdings to convert their debt into equity in The Star, at their discretion,” she added.
