Lawrence Ho Yau Lung, chairman and chief executive of Asian casino operator Melco Resorts and Entertainment Ltd, and James Packer, a founder and shareholder in Australian casino firm Crown Resorts Ltd (pictured together in a file photo), are both due to give evidence when an Australian inquiry resumes next month regarding whether Crown is fit to hold a gaming licence in New South Wales.
Donald Carducci, an analyst at JP Morgan Securities Australia Ltd, said in a Tuesday note that the bank had attended as an observer that day, the opening of the hearing by the Australian state’s gaming regulator, the Independent Liquor and Gaming Authority, looking at the local gaming permit for the under-construction Crown Sydney scheme at Barangaroo.
The analyst noted the inquiry would consider “whether Crown is fit to hold a licence in New South Wales, and whether Crown’s 19.99 percent [stake] sale to Lawrence Ho’s Melco [Resorts] was legal”.
Crown Resorts runs a gaming resort in Melbourne, Victoria; one in Perth, Western Australia; and is developing a third at Barangaroo in Sydney, New South Wales.
Melco Resorts said in May last year it would pay US$1.2 billion to acquire a 19.99-percent stake in Crown Resorts, becoming the second-biggest stockholder in the Australian company.
Mr Packer and Mr Ho had previously been business partners in the Macau and Philippine casino markets.
In July, Australia’s attorney-general told that nation’s parliament that media allegations over the summer – claiming that Crown Resorts’ Australian operations had been abused by money launderers and that the firm had helped fast-track Australia visas for a few wealthy overseas gamblers – had created “sufficient concerns to warrant at least further investigations”. Crown Resorts has maintained it is the victim of an unwarranted smear campaign.
Tuesday’s memo from JP Morgan’s Mr Carducci and his colleague Abhinay Jeggannagari regarding the New South Wales probe, noted: “Crown will also 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.
Mr Lawrence Ho’s sister Pansy Ho Chiu King, an investor in United States-based casino group MGM Resorts International, has previously been quizzed by regulators respectively in Nevada and New Jersey regarding whether being a daughter of Mr Stanley Ho rendered her unsuitable for gaming licensing. New Jersey at one stage told MGM Resorts that its link with Ms Pansy Ho made it unsuitable to be an Atlantic City casino investor, but in 2014 the state gave her and MGM Resorts a clean bill of health.
JP Morgan noted that under the terms of reference of the New South Wales inquiry, Crown Resorts would be “required to prove it is a ‘suitable person’ to hold its Barangaroo casino licence, and if not ‘what, if any, changes would be required to render it suitable’”.
According to the Australian Associated Press, the next hearing of the inquiry will be on February 24.
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”“The Royal Commission finds Crown is unsuitable to hold a casino licence [in Melbourne] on the basis that it has engaged in conduct that is ‘illegal, dishonest, unethical and exploitative'”
Report from the Royal Commission into the Casino Operator and Licence
State of Victoria, Australia