Star Entertainment Group has secured the necessary regulatory approvals for Bally’s Corporation to become a substantial shareholder.

The approvals from the New South Wales Independent Casino Commission (NICC) and Queensland’s Office of Liquor and Gaming Regulation (OLGR) enable the conversion of Bally’s and Investment Holdings’ A$300 million investment in Star Entertainment to be converted into equity.

The investment by Bally’s and Investment Holdings was agreed in April and is convertible into shares representing 56.7 per cent of the issued capital of Star Entertainment Group on a fully diluted basis.

Following the conversion, Bally’s will appoint directors to the board of Star Entertainment, with the appointments expected to occur in the coming days.

“We are very pleased to have received all regulatory approvals necessary to complete the Strategic Investment,” said Star Entertainment chairwoman Anne Ward.

“This is a critical step in The Star’s progress towards a return to suitability and financial stability. 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.”

Philip Crawford, chief commissioner at the NICC, commented: “Bally’s Corporation and its associated entities have undergone a rigorous assessment and ultimately satisfied the NICC that there are no adverse findings that would prevent them from becoming close associates of The Star.

“Both Bally’s and Investment Holdings have assured the NICC they will continue the essential remediation work required at The Star so that it can continue to remedy the serious concerns raised in the two Bell inquiries.”

The 2022 Bell report found significant anti-money laundering failings at The Star and determined that its management at the time were unsuitable to maintain licensure. This led to the suspension of the casino’s operating licenses in New South Wales and Queensland, and the appointment of a special manager to oversee the casinos operations.

The Star remains subject to remediation milestones and reporting conditions relating to its AML/CTF, gambling harm, governance and culture uplift programs, and continues to operate under suspended licenses.

Shares in Star Entertainment Group Ltd. (ASX:SGR) gained 22.09 per cent to close at A$0.11 per share in Sydney Friday.