GGRAsia – Melco group settles litigation with Australian regulator

Melco group settles litigation with Australian regulator

Sep 01, 2023 Newsdesk Latest News, Top of the deck, World

Melco International Development Ltd, parent of U.S.-listed casino developer and operator Melco Resorts & Entertainment Ltd, says the group has agreed to settle the “outstanding claims” regarding proceedings in the Supreme Court of New South Wales, in Australia.

The information was included in Melco International’s interim report filed on Thursday to the Hong Kong Stock Exchange. Melco International and Melco Resorts are controlled by entrepreneur Lawrence Ho Yau Lung.

The Independent Liquor and Gaming Authority (ILGA), the gaming regulator in New South Wales, commenced in December 2021 proceedings in that state’s Supreme Court against Melco Resorts and six of the firm’s individual directors and/or officers.

In its interim report, the parent company said that on July 24 this year, “a settlement deed was entered into for full and final settlement of all outstanding claims in respect of ILGA litigation”. The company did not disclose details of the settlement.

In its 2022 annual report, Melco International had flagged that ILGA was “seeking a payment” of nearly AUD3.7 million (about US$2.4 million), “together with the corresponding interest on such amount from 3 August 2020 to the date of judgment, and ILGA’s legal costs” associated with the proceedings.

The case emanated from ILGA’s probe to assess “whether a major change was proposed or occurred” as a result of Melco Resorts’ acquisition in 2019 of shares in Australian casino operator Crown Resorts Ltd.

ILGA launched in early 2020 an inquiry into Crown Resorts’ suitability to hold a gaming licence in New South Wales. Aside from probing whether Crown Resorts breached the terms of its gaming licence, the gaming regulator was looking particularly at the decision of Crown Resorts’ largest shareholder to sell a 19.9-percent stake in the company to Melco Resorts.

Melco Resorts said in May 2019 it would pay US$1.2 billion to acquire – in two instalments – a 19.99-percent stake in Crown Resorts, becoming the second-biggest stockholder in the Australian company.

Melco Resorts bought a nearly 10-percent stake in 2019, but in February 2020 announced it was dropping the plan to acquire a further stake in the Australian firm. In April of that same year, Melco Resorts sold its stake in Crown Resorts, at a 37.3-percent discount.

In February 2021, Crown Resorts – until 2016 a partner in the Macau gaming market alongside the Melco brand – was found unsuitable to operate a new Sydney casino at Barangaroo, in New South Wales. Nonetheless, Crown Resorts was awarded a licence for a casino in Sydney on a conditional basis.

Crown Resorts also runs a gaming complex in Melbourne, Victoria; and one in Perth, Western Australia.

In 2022, investment firm Blackstone Inc took over the Australian casino group. Ciarán Carruthers was later that year appointed as the company’s new chief executive.

Since 2022, Crown Resorts has been fined by several Australian national and state authorities in separate probes regarding events prior to the Blackstone acquisition, mostly related to failure to meet anti-money laundering and counter-terrorism financing rules.