Australian casino operator Crown Resorts Ltd confirmed on Thursday that it had been notified by the gaming regulator in the state of New South Wales that the body would “be conducting an inquiry” into Melco Resorts and Entertainment Ltd’s planned stake purchase in Crown Resorts.
Melco Resorts announced in May that it was paying US$1.2 billion to acquire a 19.99-percent stake in the Australian casino firm, with CPH Crown Holdings Pty Ltd – controlled by Australian businessman James Packer (pictured right in a file photo) – as the seller. According to the regulator, the deal was “apparently yet to be finalised”.
Lawrence Ho Yau Lung (pictured left in a file photo) is chairman and chief executive of Melco Resorts. Mr Lawrence Ho is also the company’s controlling shareholder.
The New South Wales Independent Liquor and Gaming Authority announced on Thursday that it was launching the investigation to probe the “change in state of affairs” of Crown Resorts, “together with various matters raised in recent media reports” published by the Nine Network, the Sydney Morning Herald and the Melbourne Age relating to the Australian gaming firm.
In a statement to the Australian Securities Exchange, Crown Resorts said it “will fully cooperate in relation to this inquiry”.
Melco Resorts has been approached by GGRAsia for comment.
Accounts carried in Australian media since late July alleged Crown Resorts’ Australian casino business had been a conduit for money laundering and Chinese organised crime activities via high-roller gambling.
Australia’s attorney-general told the country’s parliament on July 30 that he had referred the media allegations against Crown Resorts – including alleged fast-tracking of visas for a few wealthy overseas gamblers with assistance from the authorities – to the Australian Commission for Law Enforcement Integrity, which would determine whether a further probe were needed.
Crown Resorts – which has traditionally been strong in high-stakes play – runs a gaming resort in Melbourne, Victoria; one in Perth, Western Australia; and is developing a third at Barangaroo in Sydney, New South Wales. Regulators in other Australian states have also launched their own investigations into the allegations made against Crown Resorts, according to media reports.
In Thursday’s announcement, the New South Wales gaming regulator said it had already issued notices “to relevant Crown parties and other parties” seeking documents and information which will assist it in its investigations and be used in the inquiry.
The regulator said additionally that it had to ensure the “primary objects” of the New South Wales Casino Control Act. “This includes ensuring that the management and operation of a casino remain free from criminal influence or exploitation, that gaming in a casino is conducted honestly and controlling the potential of a casino to cause harm to the public interest and to individuals and families,” it stated.
The regulator said the inquiry would be public but would have the capacity to conduct private hearings in order “to receive confidential information from law enforcement or other sensitive information”.
Before granting a casino licence to Crown Resorts in Sydney, authorities in New South Wales had included a provision to prevent “any new business activities or transactions of a material nature between Stanley Hung Sun Ho or a Stanley Ho associate and Crown, any of Crown’s officers, directors or employees or any Crown subsidiary”.
Mr Stanley Ho, the father of Mr Lawrence Ho, is the founder of SJM Holdings Ltd, one of Macau’s current six casino concessionaires.
Mr Stanley Ho, now in retirement from the Macau gaming industry, has been subjected in the past to scrutiny by regulators in the U.S. and Australia for alleged links in the Macau casino junket sector to Chinese organised crime groups, known as triads.
The provision faced by Crown Resorts for its Sydney licence to keep away from Mr Stanley Ho and his associates – previously kept confidential – was in a document supplied to the Australian state’s two legislative bodies and dated November 13, 2014. A copy of the document has been seen by GGRAsia.
But a list of the dozens of companies and people described as associates of Mr Stanley Ho who were banned from doing business with Crown Resorts was only made available to the New South Wales parliament on Thursday. That list included a company called Lanceford Co Ltd, which listed as its directors several relatives of Mr Stanley Ho.
According to The Guardian newspaper, Mr Lawrence Ho was still a director of Lanceford Co at the time Melco Resorts completed the acquisition of an initial 10-percent stake in Crown Resorts in early June. The remaining Crown Resorts shares are due to change hands by the end of September, according to company filings.
The list of banned companies and persons associated with Mr Stanley Ho however does not include Mr Lawrence Ho, or Melco Resorts, which was a business partner of Crown Resorts for a decade.
At the start of May 2016, Crown Resorts – alongside Melco International – each held a stake of 34.3 percent in the joint venture. But in early May 2016, Crown Resorts said it was cutting its holding in the firm to 27.4 percent. Further sell downs by Crown Resorts occurred in the space of several months, with the Australian company selling its remaining stake in Melco Resorts in May 2017.
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