Crown And Melco Endure Inquiries And Setbacks

Crown had a rough year in 2019, and it seems the new year isn’t starting on any smoother of a road.

As a quick review, Crown’s talked publicly about preliminary discussions with Wynn Resorts for the latter to buy Crown, prompting Wynn to immediately withdraw its $10 billion offer.

Later in the year, Melco Resorts put forth an offer to buy a 20% stake in Crown from James Packer, but Melco CEO Lawrence Ho came under immediate scrutiny and investigation by Aussie officials. That delayed the process.

Meanwhile, several media outlets announced the results of their investigation into Crown Resorts. What they found was that Crown was used by members of Chinese crime syndicates through junkets to launder money and participate in drug and human trafficking rings. As profits fell due to slowing VIP business and junket cancellations, whistleblowers came forward with more information that prompted lawmakers to call for a royal commission. Even further, Crown reportedly welcomed a notorious and UN-sanctioned arms dealer as one of their VIP customers.

Crown could only hope that 2020 would be better.

First of Three Inquiries Begins

In mid-January, the first of several inquiries got underway, this one by the NSW Independent Liquor & Gaming Authority and headed by former New South Wales Judge Patricia Bergin.

The purpose is to look into top Crown shareholder James Packer’s decision to sell approximately 20% of his company shares to Melco and Lawrence Ho for $1.75 billion.

The allegation that spurred the investigation was that this move breached Crown’s license agreement for its new casino being built in Sydney at Barangaroo. That deal included a provision that prevented Lawrence’s father, Stanley Ho, from any association with Crown. Ho’s links to organized crime syndicates were never proven but highly suspected for years.

The inquiry will explore those alleged ties between the Ho family and crime syndicates, as well as the father-son relationship and Packer’s interest in selling to Ho. All of the 2019 allegations against Crown will also come into play.

The other two inquiries have not yet gotten underway but loom large over the first one. The Victoria Commission for Gambling and Liquor Regulation plans to reexamine Crown’s license for gambling in its territory. And the Australian Commission for Law Enforcement Integrity wants to hold public hearings regarding the 2019 allegations about high rollers using Crown for favorable visa treatment.

Information divulged in the first investigations could prompt further ones from Austrac and the Australian Criminal Intelligence Commission, as well as a possible royal commission.

Packer Under a Microscope

ABC reported that Packer will be expected to provide evidence as the inquiry moves forward through February. One of the lawyers for NSW said, “One of the matters is the extent to which Mr. Stanley Ho, Mr. Lawrence Ho’s father, or persons or entities associated with him, have corporate or business connections with Melco entities.”

While previous investigations could not pinpoint Lawrence Ho’s involvement with his father’s activities, this inquiry plans to dive further. Packer will be questioned thoroughly and asked to provide evidence to prove anything to which he testifies.

Packer recently told the media he is in a better mental place than in the past. He seemed in good spirits when he recently – and not ironically – toured the Crown Sydney project at Barangaroo.

Crown Executive Shakeup

As January wore on, Crown Resorts was preparing to shake up its executive and management structure.

First, Executive Chairman John Alexander will be stepping down from his position but will remain in participation as an executive director. Former Liberal Senator Helen Coonan will take his place. This happened just ahead of Alexander reportedly being on the list to testify in the aforementioned inquiry.

Meanwhile, Chief Financial Office Ken Barton will take over as Chief Executive, and John Horvath will become Crown Deputy Chairperson.

The moves came under scrutiny, though, because Alexander’s new directorship will last for one year to assist with the transition of others into their new positions. And he will be paid $3.5 million for that.

Melco Under a Spotlight

As the NSW inquiry began in the NSW Supreme Court, Melco argued that the entire investigation exceeded its legal boundaries.

The inquiry demanded that Melco deliver documents, but Melco claimed that company documents are privileged and would not be provided. Melco originally told GGRAsia that it would participate “in any probity review process and cooperate with any inquiry” pertaining to its Crown investment. However, its actions in court indicate that feelings had changed.

As the court tries to obtain documents, it will reconvene on February 24 for another hearing.

No More Crown for Melco

In even more news regarding Crown, Melco announced that it was not going forward with its plans to buy the remaining available shares of Crown. When the initial acquisition of 20% took place, Ho indicated that he wanted to purchase more in the future. That amount was originally 50% but reduced to 10% over time due to continued scrutiny in Australia.

Then the coronavirus outbreak occurred.

Not only has the quick spread of the deadly virus hurt casino business in Australia, it prompted the Macau government to shut down all casinos for approximately two weeks. In addition, many flights in and out of China have been cancelled.

Melco then announced it would not make any further non-essential investments in 2020.

The company claimed that the decision had nothing to do with the NSW inquiry and the already-contentious fight over documents. Melco said, “This decision reflects Melco’s commitment towards its employees, customers, business partners and other stakeholders and observance of the highest degree of responsibility until such time as the global health emergency and the related travel restrictions that affect a significant part of its customer base are lifted.”



Rose Varrelli avatar
Rose Varrelli
Senior Casino & News Writer

Hi there! I’m Rose, and with nine years behind me in the iGaming industry, I craft engaging narratives at CasinoAus. My education in Communication across Europe has sharpened my skills in fintech, casino legislation, and digital marketing. Backed by a strong foundation in SEO, storytelling, and cross-cultural communication, I’m passionate about creating content that resonates globally and educates our audience.

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