The counsel who has been assisting the New South Wales probe into the Australian gambling behemoth Crown Resorts has revealed that the company’s failure to inform the competent authorities about the 20% stake sale to Melco International prior to the deal itself could be a violation of the casino operator’s casino licence. Adam Bell SC further noted that apart from a possible violation of the Barangaroo casino licence, such a breach could raise questions about the sustainability of Crown as a casino operator.
The NSW probe started last week. During the inquiry, the billionaire owner of Crown Resorts James Packer is to be called to testify, as well as the chairman of Melco International, Lawrence Ho. Several Crown and Melco executives are also expected to take part in the hearings, as the probe is aimed to find out whether both companies are suitable to have control over the high-roller Barangaroo casino licence that was officially granted in 2014.
The NSW inquiry was fuelled by the announcement that Melco International is planning to acquire 19.9% of Crown Resorts. However, it was found that at the time when the deal was reached, the owner of Macau-based Melco International, Lawrence Ho, has been involved in operations associated with his father Stanley Ho. The latter, as well as some individuals and entity associates, have been blocked from having anything to do with Crown due to alleged connections with organised crime.
The Official Start of NSW’s First Phase to Be on February 24th
As part of the NSW inquiry into Crown Resorts, an opening hearing was held by the former supreme court judge Patricia Bergin SC, but the actual probe is to be given a start on February 24th. This is also when the first part of the investigation is set to start. During the first phase of the probe, the investigators will check the potential vulnerability of casinos to money laundering and organised crime, as well as the role so-called junket operators had to their operations.
Then, the second part of the probe will begin in March. At the time that phase of the investigation is held, Crown Resorts’ sale agreement with Melco International is to be put in the spotlight. The inquirers will check whether the 20% stake sale would have breached the operator’s casino licence.
Later in 2020, a third set of hearings is also to be held. At the time it happens, Crown Resorts will face checks to find out whether the casino operator has had any involvement with money laundering and organised crime. In addition, two final blocks of the probe are set to specially check Melco International and the suitability of any close associates.
As mentioned above, Mr Bell highlighted the fact that Crown Resorts failed to inform the casino authority about the stake sale to Melco ahead of time in order for the authority to make an assessment of the new shareholder’s suitability for the casino licence. This is why the Australian gambling giant is now facing criticism and questions about its own suitability.
Under the NSW Casino Control Act, casino licence holders are required to inform state authorities before inking any deals that would make a new individual or an entity a close associate of the casino licence holder.
For the time being, Crown Resorts claims that it was not aware of the deal inked between its largest shareholder, CPH Holdings, and Melco until the sale was publicly revealed. However, CPH Holdings has four directors representing in on the Crown board.
- Author
Olivia Cole
