The NSW Independent Liquor and Gaming Authority is looking into whether Crown breached its license conditions not to be connected with any companies associated with Stanley Ho. In May 2019, Crown shareholder James Packer agreed to sell an almost 20% stake to Melco Resorts & Entertainment, which is owned by Ho’s son Lawrence. The Authority will present its full findings on 1 February 1 next year. And while Crown’s new property in Sydney is scheduled to open on 14 December, it’s probable that it will be impacted by the inquiry as well.
Analysts Donald Carducci and Abhinay Jeggannagari said in a statement, “We do not believe anything beyond a temporary suspension will eventuate, as the company has stated it will undertake a comprehensive review of processes related to junket operators and create a head of compliance and financial crimes role. Given the 2014 Financial Deed Terms (and potential impacts to VIC and WA licenses), the removal of an NSW license seems highly unlikely, in our view.”
JP Morgan predicts that it’s unlikely Crown won’t face any ramifications. One possible outcome is the requirement to address the internal issues, which the company is already doing with the newly established role. There might also be additional requirements placed on the Crown’s license, but then the casino is said to be entitled to claim compensation worth more than 10 times the estimated negative financial impact from nearly any action the NSW government takes, which changes or could change its license.
The minimum compensation is AUD200m unless Crown is found to have breached its license conditions.
