Crown Resorts Licence to Be Reviewed
Crown Resorts holds subsidiaries in Melbourne and Perth, and has been looking to break into the Sydney market with the Barangaroo development. The luxury integrated resort is intended to entice Asian high rollers.
The VIP Gaming Management Agreement, a restricted licence from the New South Wales Independent Liquor and Gaming Authority for the Sydney project, was granted in 2014. However, a recent sale by Consolidated Press Holdings, the private investment vehicle Packer inherited from his family including grandfather Sir Frank Packer, may have breeched the contract.
Consolidated Press Stock Sale
When the VIP Gaming Management Agreement was signed, one of the stipulations was that Crown Resorts refrain from business deals with Stanley Ho and any associates. Ho used to hold a monopoly over gambling in Macau, and is regarded as the founder of one of the largest betting empires in Asia.
Allegations of ties with organised crime, especially Chinese triads, have plagued Stanley Ho for some time. His son, Hong Kong businessman Lawrence Ho, owns Melco Resorts & Entertainment. Previously this company ran a joint venture, Melco Crown, with Crown Resorts and ran casino resorts in Macau.
Packer's company sold its Melco Crown shares and exited the Macau market amid accusations of promoting Crown Resorts' Australian operations very aggressively. Although all operations seemed legitimate and above-board the close connected to Ho Senior raised enough eyebrows that the previously mentioned restrictions were included in the VIP Gaming Management Agreement.
Now, as announced on 30 May 2019, Consolidated Press Holdings has sold 50% of its Crown Resorts shares to Melco Resorts & Entertainment. This amounts to 19.9% of the Australian operator's stock. As a result, the Government of New South Wales has instructed the Independent Liquor and Gaming Authority to review Packer's licence.
Melco Says No Approval is Needed
For its part, Melco Resorts & Casinos claims that no regulatory approvals are needed for its purchase of Crown Resorts stock. As Crown Resorts has previously noted, Lawrence Ho's businesses are independent of his father's.
The younger Ho has passed previous regulatory screenings without issue, and does plan to apply for regulators' approval, perhaps in an effort to build good business relationships. However, the connection to Stanley Ho and Crown Resorts' Macau market exit seem to have prompted government suspicion and suggest that gaining approval from New South Wales could be especially challenging.