Crown’s $450m fine could point to lower-than-expected Star penalty
The $450 million penalty handed to Crown Resorts for breaches of anti-money laundering and counter-terrorism laws is pointing to a lower-than-expected fine for its ASX-listed rival, Star Entertainment.
That’s the view of Donald Carducci, an analyst at JPMorgan, who said the settlement between the Blackstone-owned Crown and AUSTRAC was “less severe than feared”.
“The market capitalisation of Crown, when they delisted, was $8.9 billion, so the final $450 million is 5 per cent market capitalisation,” he told The Australian Financial Review.
Others in the market, however, are more pessimistic. Morningstar’s Angus Hewitt said Crown’s fine “gives you a tighter, indicative range of what it means for Star”.
“Is [Star’s] $150 million provision sufficient for now? Maybe. But in light of the $450 million [fine handed to Crown Resorts], it’s probably in the lower end … of the likely fine,” he said.
Analysts have put an enterprise value of $798 million on Star Sydney – less than the Gold Coast and Queens Wharf casinos in Queensland. Bloomberg
Star is in a significantly more difficult financial position than Crown, with the Financial Review’s Street Talk column reporting last week that a handful of credit funds were preparing financing packages to offer the business amid concerns that an equity raising would not be enough to fix its balance sheet.
Both Crown and Star allowed money laundering to take place at their casinos as they attempted to lure high-spending gamblers to their venues. Separate inquiries in NSW, Victoria, Western Australia and Queensland resulted in findings against the companies and significant change in management and boards.
On Tuesday, Federal Court judge Michael Lee signed off on the $450 million fine levied
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