Crown Resorts at Future Risk of Default, Auditor Warns on Going Concern

Auditor KPMG has said the various regulatory investigations swirling around castled casino giant Crown Resorts, joined with the pandemic effects, experience created “material uncertainties” virtually whether the operator canful carry on as a going concern.

The auditor warned that farther cancellations or suspensions of Crown’s gaming licenses inwards Commonwealth of Australia could do the companion to nonremittal on some of its debts.

Meanwhile, KPMG said Australia’s financial intelligence activity authority AUSTRAC was “very potential to commence polite penalty proceedings against Crown Melbourne and Crown Perth,” which it expects to result inward the casinos paying “significant civil penalties.”

The 2 casinos are currently under investigation past AUSTRAC’s Enforcement Team. That is examining potency non-compliance with the country’s Anti-Money Laundering and Counter-Terrorism Financing Act, and Anti-Money Laundering and Counter-Terrorism Financing Rules.

Bad Start Goes Downhill Fast

The auditor’s sobering analytic thinking was delivered inward Crown Resorts 2021 one-year cover to shareholders, published Thursday.

This twelvemonth was supposed to starting line brightly for the cassino giant, which planned to unfastened its US$1.6 1000000000 Crown Sydney just now inward time for the New Year celebrations. But its gaming permission for Sydney was pulled past the tell of New South Wales.

That’s after a regulatory investigating found Crown was shamefaced of “facilitating money laundering, exposing stave to the risk of detainment in a foreign jurisdiction, and pursuing commercial-grade relationships with individuals with connections to Triads and organised criminal offense groups.”

A similar inquiry inward capital of Seychelles has added revenue enhancement equivocation to the heel of complaints. Now Crown’s Melbourne permission also hangs inward the balance. The flagship Melbourne attribute generates upwards to 75 percent of Crown’s profits.

Damage Limitation

Crown embarked on a serial of reforms after losing its Sydney license, including a major leadership reshuffling as it sought-after(a) to realign its incorporated civilisation with regulators’ recommendations.

Crown has apologized for the failings identified through these various regulatory processes, and we are committed to doing everything inward our force to remedy them and garner support trust and trust,” wrote the plank inwards the yearly written report as it tried to assure investors.

The room also told shareholders it had negotiated waivers with its bondholders that would provide “a point of clip to negotiate with lenders or otherwise refinance the facilities.”

Additionally, it secured an duplicate A$250 one thousand thousand (US$184 million) debt facility allegiance with lenders, which could be used to repay its bonds, if necessary.

Crown Resorts CEO Steve McCann said earliest this month that the society could rent come out its properties to other operators should they lose their gambling licenses, although he added this was just now i of “a reach of scenarios.”