Sharpcan Pty Ltd, a company in Australia, was the main recipient of all income from the Daylesford Royal Hotel Trust in 2012. Mr. Canny, who had experience in running hotels, owned and managed both Sharpcan Pty Ltd and the trust.
The trust owned a hotel business from August 2005 to November 2015. This business included various activities like providing accommodation, selling food and drinks, hosting gaming machines, and offering betting services.
Initially, the trust had an agreement with Tattersalls Gaming Pty Ltd, who owned and operated 18 gaming machines in the hotel. Tattersalls made money from these machines, and the trust received a share of that income as commission.
However, in 2009, there were changes to gaming laws in Victoria that affected the trust's operations. The new laws required the trust to directly manage the gaming machines and obtain special licenses called GMEs. Without these licenses, they couldn't earn from gaming after August 16, 2012.
To get these licenses, the trust participated in an auction in May 2010 and successfully bid for 18 licenses, costing a total of $600,300. They chose to pay this amount in quarterly installments over six years.
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