With the future ownership of Crown Resorts in limbo, one fascinating development thus far unknown is that Crown’s 10 per cent shareholder Blackstone has just applied to the NSW regulator to increase its holding.
Blackstone, which acquired its existing stake from Lawrence Ho’s Melco in April, appears to be positioning itself to have an option to take a controlling interest in the casino group.
Thanks to the possibility that James Packer will need to significantly sell down his 36 per cent stake, the share register of Crown is potentially in limbo and unstable.
While Blackstone is best recognised as a private equity player, it is also well known for its real estate assets - splitting the property assets of companies (including casinos) and retaining or selling the operating business.
If its application to increase its stake in Crown is part of a larger play, it is plausible it could also pursue fellow casino operator The Star down the track in order to bulk up the real estate trust. Such an outcome would lead to a massive consolidation of casinos in Australia.
It’s early days yet but it's fair to assume that the positioning has begun.
And it's also worth noting that investing in casinos in Australia is a long game. It can take years to receive probity approvals but for a party considered an investor rather than an operator the process is generally faster and less arduous.
At this point a major factor in understanding the value of Crown is what an investor would be buying.
"What confidence could the regulator in NSW have that it's appropriate to open the casino in Barangaroo in circumstances where you have just said that there are deficiencies in the culture of compliance that you don’t know how long it will take to fix?"
Demetriou whose forceful - even extreme - defence of the company and much of its behaviour departed from that of most previous witnesses, including Packer, insisted the Crown of today was more of a model corporate citizen than the organisation that has been depicted during the course of the inquiry.
(During a somewhat humiliating point in proceedings Demetriou was even pulled up by the commissioner for reading from a cheat sheet while giving evidence.)
He argued that various reviews of Crown’s practices, from its dealing with junkets and money laundering to its culture and compliance made it match fit for the opening of Barangaroo in two months.
Conventional wisdom to date has been that the Sydney casino will open in December. But as the damaging evidence mounts against Crown’s operation there will be additional pressure on the NSW regulator to act on an interim basis.
Adding to this pressure was Monday’s revelation the Victorian gaming regulator had issued Crown with notice requiring it to show cause why disciplinary action should not be taken in relation to an alleged non-compliance with its own internal control statement in relation to junket operations.
Commissioner Bergin said she understood Demetriou’s protestations that the company says it is addressing some of the now well-publicised failings but added one of the problems the inquiry has faced is that these problems have been exposed on multiple occasions for years.
"Has there been any admissions prior to the inquiry as to what was exposed (in the media) last year," Bergin asked.
Demetriou said there had and that these matters occurred years ago.
However, Demetriou was taken to a document showing the board had dealings last year with a Zhou Qiyun - a junket operator with alleged links to money laundering and was detained (not jailed) by Chinese authorities in 2012.
Demetriou was determined to stick to his defence of Crown, eager to convince the inquiry of the company’s upstanding cultural credentials.
"The fact is do you accept that it's not all in the past, it's in fact more recent than that... I’ll say it once again - do you accept that it's not all in the past? It's more contemporary than that, the problems we see here."
Demetriou ultimately conceded. "I accept there are issues that are contemporary," he said.