A court in New South Wales (NSW) ruled on Tuesday that a regulatory inquiry in that Australian state regarding the gaming-licence suitability of Crown Resorts Ltd, does not have the same powers as an Australian Royal Commission. As a result, casino operator Melco Resorts and Entertainment Ltd, an investor in Crown Resorts, will not have to produce certain documents – ones it regarded as legally privileged – to New South Wales’ Independent Liquor and Gaming Authority (ILGA) and its inquiry.
Multiple media outlets quoted an ILGA spokesperson as saying the body was “considering today’s court judgment and how it may impact the running of the inquiry”.
The regulator added that any decision on whether to appeal against the judgment from the state’s Supreme Court would be a matter for the New South Wales attorney-general.
Crown Resorts runs a gaming complex in Melbourne, Victoria; one in Perth, Western Australia; and is developing a third at Barangaroo in Sydney, New South Wales.
Lawyers for the ILGA had argued that the power to form inquiries – including a suitability inquiry – as granted under the state’s Casino Control Act, meant such a probe could have the same powers as a Royal Commission, which has the right in some circumstances to override rules concerning legal privilege.
Lawyers for Melco Resorts successfully argued the law concerned was not sufficiently clear on that point.
The Australian Financial Review newspaper reported that Melco Resorts’ decision last week not to pursue purchase of the second tranche of shares in Crown Resorts, amounting to nearly 10 percent, meant that some Melco Resorts executives – ones that the latter firm had “put forward as potential Crown directors – will no longer need to be cleared by the probe”.
In its announcement stating it would not increase its stake in Crown Resorts beyond the existing circa 10 percent, Melco Resorts had said it also had decided not to seek representation on Crown Resorts’ board.
Melco Resorts, a company controlled by gaming entrepreneur Lawrence Ho Yau Lung – a son of Macau casino entrepreneur Stanley Ho Hung Sun – announced in May last year that it was paying US$1.2 billion to acquire a 19.99-percent stake in Crown Resorts, in two tranches.
A January note to investors from JP Morgan Securities Australia Ltd – issued prior to Melco Resorts saying it would not pursue the second phase of the deal in shares of Crown Resorts – stated that in likelihood at the ILGA inquiry, Crown Resorts would “face questions on whether the sale to Melco [Resorts] would make Lawrence Ho’s father (Stanley Ho), a close associate of Crown.”
Mr Stanley Ho’s name had previously been linked – according to publicly-available information – with local concerns in Australia that the businesses he founded had ties to Chinese organised crime.
The now-retired nonagenarian businessman has always denied such claims and has not been convicted of any offence relating to such allegations.
It had been expected that James Packer – a Crown Resorts founder and shareholder – and Mr Lawrence Ho, would attend the ILGA inquiry.
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”We have maintained stringent cost controls, conservative financial policies, and have the resources to weather a lengthy adverse situation if necessary”
Executive director of Hong Kong-listed Summit Ascent, promoter of the Tigre de Cristal casino resort in Russia