As a result, Blackstone will be investing in what it sees as a much-needed renovation in Crown Melbourne, following the $6.5-billion acquisition of Crown Resorts last year. This was carried out amid increased pressure on the property, as it faced probes into various offenses and breaches of Australia’s gambling laws.

Blackstone Outlines Future Success of Melbourne Property

However, Blackstone president Jon Gray said that he was confident in Crown’s prospects in a recent interview with The Australian, echoing a group-wide sentiment that despite its tarnished reputation, Crown Melbourne is a shiny jewel in global gaming and hospitality.

All it needs to get back to its once-favored status is a bit of a buff. According to Gray, Crown Melbourne is one of a kind, with its scale and significance undoubtedly capable of attracting crowds from the world over.

Despite regulatory headwinds, the property remains as important in Blackstone’s global gaming and hospitality strategy as ever. He added:

Melbourne is a physical turnaround story and our objective would be to invest significant capital there and enhance the asset, which we think will be great for the community and great for tourism there as well.

Blackstone president Jon Gray

Gray said that the regulatory heat Crown was facing was not really anything that worried it as of right now. Crown recently agreed to settle a $300 million (AU$450 million) fine imposed by AUSTRAC, Australia’s financial regulator. This too has not made Blackstone any less confident in the property’s prospects.

If anything, Gray has drawn parallels to The Cosmopolitan in Las Vegas, a property that the group acquired for $1.7 billion in 2014 only to sell years later for $5.7 billion. At the time, Blackstone went in with the same confidence, seeing the potential of the famed company despite its financial troubles.

Present Challenges Should Not Dissuade Investment Zeal

Gray said that it was a combination of factors that made The Cosmopolitan sale worked the way it did, because the company found the right managers to take care of The Cosmopolitan and break away from the same practices that drove the business into the ground in the first place. Investment was also needed to refurbish the venue and Blackstone was more than happy to cough up.

Ultimately, though, Gray said that there is nothing to suggest that Crown Melbourne and Crown, in general, would lessen its appeal. Australia’s tourism industry is one of the country’s main economic drivers with cities such as Perth, Sydney and Melbourne popular destinations that people want to visit.

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According to a 1947 law, gambling halls and casinos are supposed to be illegal in Mexico. However, hundreds of them exist and former President Vincente Fox was given powers by the courts to authorize licensing in order to create revenues through taxes as well as bolster the tourist trade.

Current president, Andrés Manuel López Obrador made no secret of his anti-gambling stance when he ran for and won the presidency, and has not personally authorized or issued any new licenses since he took office on December 1, 2018. In September of the next year, he re-affirmed his stance against issuing any new licenses in a gesture that was widely seen as an effort to reassure the Catholic church that he was on its side on the issue.

Casino Opposition Increased After Fire

The church and specifically Cardinal Rogelio Cabrera, head of the Mexican Episcopate, strengthened opposition to casino gambling after about 25 gunmen, purportedly members of the Los Zetas drug cartel stormed the Casino Royale in Monterrey, Nuevo León, Mexico. The men doused the casino in flammable liquids and lit it on fire trapping over 50 people inside. At least 50 people were killed in the tragedy.

At a recent press conference, the president stated that his government will not only refrain from issuing any new licenses but will also revoke any that may have been granted in the last four years. Mexican presidents are limited to a single six-year term.

At the presser, López Obrador declared he would request a report from the head of the Secretariat for Home Affairs, Adán Augusto López Hernández in order to take control of the current process for issuing licenses.

Prior to leaving office in 2005, the former Secretariat issued more than 750 licenses to gaming parlors across the country.

The president stated in reply to a reporter’s question about licensing and an upcoming casino industry conference: “Casinos should not be opened, we are not giving permission to open casinos. We are not. And I am going to ask the Secretariat for Home Affairs for a report because, if there is a new license, it is canceled, because the instruction is not to deliver any license.”

Licensing Process “Inadequate”?

It’s unclear if López Obrador will follow through on his threat to jerk existing licenses so far into his term. He had earlier asked Olga Sánchez Cordero, a prior Secretary of Home Affairs whether or not licenses issued under the previous administration had been under a lawful process. Obrador has stated in the past the process was “inadequate”.

Some legal scholars have differed on the legislative appendix process used to authorize deviance from earlier laws that specifically outlawed casino operations but in the 2000s many lawmakers were behind efforts to bring casino gambling to major coastal resort hotels. In recent years, some state governors have taken it upon themselves to issue more local licenses.
There is no unified federal framework for casino legislation, anti-money laundering controls, or even a unified tax code across the country. Online gambling is authorized loosely although there are no laws specifically authorizing it.

According to Thompson Reuters Law Guides: “Land-based casinos and online gaming are permitted. In Mexico, there are 36 land-based permit holders that are, or could be, allowed to operate online gaming.”

Source: President says he will revoke all casino licenses granted over the last four years, G3 Newswire, March 20, 2023

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