Melco putting his trade with Crown Casino on hold

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Recent casino industry news included the decision made by Lawrence Ho and his Melco Resorts. As it was mentioned that Mr Ho decided to change the plan of purchasing shares of the Crown casino and put it on hold, whilst there is still ongoing scandal on the illegal activities of the casino. The reason why Hong Kong magnate was purchasing James Packer’s shares was to expand the portfolio to a more international one, but it will remain on hold until further notice.

 

The Hong Kong speakers even mentioned that the trade would not go on between the two sides and would be immediately canceled if an investigation happens to be unacceptable. The announcement was published on Wednesday and still remains one of the most spreadable news, all the media initiated in Australia covered the results of the investigation. It was uncovered that ‘Crown Casino was involved with junket companies which are backed by Asian crime gangs and Chinese foreign influence agents.’

Although there is a whole tension going in the industry, the operations still continue, and there have been no signs of negative effects on the industry itself and it is growing incredibly fast, especially in Australia. The industry seems to be as healthy as it has always been and investigations do not overlap with it at all. Nevertheless, there are particular deals outside of Australia that investigation might be affecting and concerning.

Because of these illegal operations, everything is under control, including sales of stakes. Apparently, the father of Melco’s owner, Stanley Ho is suspicious as he might have had ties to Asian gangs and sale might be directly connected to the illegal junket operations. Melco has an agreement to purchase a stake worth around $1.7 billion, also transferring the first 10 per cent before September 30th.

The Melco Resorts has released a statement on the Nasdaq exchange. It was said that the agreement was agreed with Consolidated Press Holdings to extend the deal by another 60 days. Their representative announced that they have not even considered that there was much violation of a law or of an agreement. According to them, Melco was taking all the steps accordingly to the agreement, but it also would result in cancelling the deal. 

As a matter of fact, a vast number of the casino industry news outlets reported that Crown was granted the license to create $2 billion worth of casinos by 2021 in Sydney, but there were a special list and individuals that casinos were forbidden to work with. Surprisingly, Stanley Ho was one of the individuals on the list, which was made public recently and as media says Crown dealt with it extensively.

The list also included the Great Respect Limited, 20% of it is owned by Melco International. Mr.Ho is the chair of it and it has a controlling stake in Melco, which appears to be one purchasing stake in Crown. These facts have put the whole company under huge risk.

The current situation remains unresolved as it is still not determined at what extent the company managed to breach the agreement, beyond breaking the law.

Additionally, Melco and Crown had a partnership in the past, but it was cancelled after the scandalous event of 19 individual staff members being arrested in Crown on Gambling related purposes. The partnership will be on hold for now, as according to media companies were planning to rebuild the bridges. Currently, James Packer still remains the largest shareholder.

 

 

Disclaimer: This content does not necessarily represent the views of IWB.

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