The gaming regulator for the eastern state of New South Wales is investigating possible license violations by local casino operator, Crown Resorts.
The sale of an almost 20% stake in its business to Asian counterpart Melco Resorts and Entertainment Limited, has attracted the scrutiny of the New South Wales Independent Liquor and Gaming Authority. The transaction may constitute a ‘breach’ of the operator’s license or other regulatory covenants.
Sydney operation in jeopardy
AS reported by GGRAsia, the investigation, headed by former New South Wales Supreme Court Judge, Patricia Bergin could have devastating implications for the company. The judge will consider whether Crown Resorts Limited should be permitted to retain the state-issued casino license attached to their sprawling Crown Sydney facility. The facility is in the harborside Barangaroo district of central Sydney and is due to begin welcoming gamblers from 2021.
Crown Resorts is currently already responsible for the Crown Perth venue in Western Australia as well as Victoria’s monolithic Crown Melbourne. In May, Crown made a bold move by signing off on a $1.2 billion deal whereby its largest shareholder, CPH Crown Holdings Proprietary Limited, offloaded a 19.9% stake in its business to Hong Kong-listed Melco Resorts and Entertainment Limited.
Deal on hold
CPH Crown Holdings Proprietary Limited, under the control of controversial Australian billionaire businessman, James Packer, initiated this deal in June by selling just over 67.67 million of the shares it held in Crown Resorts Limited to Melco. This near 10% sell-off was due to be followed by a similarly-sized transaction before the end of next month.
In the face of the current situation, however, the buyer declared yesterday that it had postponed its acquisition as ‘to allow more time for the relevant Australian regulatory processes to be completed.’
Lawrence Ho Yau Lung, chairman and CEO of Melco, stated that his company was willing to participate in ‘in any probity review process and cooperate with any inquiry’ regarding its acquisition of the shares in Crown Resorts Limited.
Under the magnifying glass
The New South Wales Independent Liquor and Gaming Authority have explained that the scope of their investigation goes beyond the legality of the deal itself. They are also seeking to determine whether Ho and his representatives are of ‘good repute’ in regards to their ‘character, honesty and integrity’ and whether they have connections with ‘any person, body or association who is not of good repute’ or ‘otherwise not suitable to be associated’ with the local gaming license held by Crown.