(Adds Crown 's comment, inquiry cost payment; paragraphs 8-10)
By Paulina Duran
SYDNEY, May 13 (Reuters) - Australian takeover target Crown Resorts CWN.AX has committed to end international gambling tours, or "junket" operations, and go cashless in its casinos, the gaming regulator in the country's biggest state said on Thursday.
After being deemed unsuitable for a gambling licence in New South Wales in February, when an inquiry found Crown had enabled money laundering on its premises, the Melbourne-based casino operator has emerged as the target of a bidding war.
Star Entertainment Group SGR.AX proposed an all-stock buyout this week of its larger rival Crown that values it at A$9 billion ($6.96 billion), taking on private equity giants Blackstone (NYSE:BX) BX.N and Oaktree Capital Group OAK_pa.N for control of the troubled company. New South Wales Independent Liquor and Gaming Authority (ILGA), which would need to approve any potential merger, said on Thursday it had held talks with Star, which had also agreed to end junket tours.
The Sydney-based casino suitor had also agreed to work with the authority in moving towards cashless gaming, using a card linked to identity and to a recognised financial institution, it added.
"Any changes to Crown's ownership structure, including takeover or merger proposals, require the authority to consider a range of issues," the regulator's chairman, Philip Crawford, said.
These cover aspects such as how a merged entity would operate, and the extent to which any existing agreements with Crown would need to be reviewed, he added.
In a stock exchange filing, Crown said its pact with the regulator over its Sydney property provided for the firm to contribute A$12.5 million as the cost of the inquiry, along with an annual casino supervisory fee of A$5 million for two years.
It will consult the regulator over any supervisory fee from 2023 onwards, it added.
"While we recognise we have more work to do, we welcome ILGA's indication today that Crown's reform implementation is well advanced towards suitability to operate gaming at Crown Sydney," the firm's executive chairman, Helen Coonan, said.
Star's approach this week follows buyout giant Blackstone Group upping its all-cash indicative bid to A$8.4 billion, and Oaktree's proposal to bankroll a A$3 billion buyback of Crown's founder's stake to remove a regulatory concern. regulator had also struck a pact with CPH, a vehicle owned by founder and 37% owner James Packer, to tackle issues regarding influence and control, it added, without giving details. ($1=1.2948 Australian dollars)