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Silence from Crown amid junket report

Tue, Jul 30, 7:43am by Staff Writer

Crown Resort’s long held policy of saying as little as possible at all times dates back to Kerry Packer’s famous philosophy about public relations: Never explain, never complain.

The Financial Review is reporting that following allegations between organised crime and the junket operators that bring Chinese gamblers to Crown’s Australian casinos, there should be two very important people in Crown’s world pushing the company to start talking.

One is James Packer, the company’s biggest shareholder. The other is Lawrence Ho, Crown’s second biggest shareholder.

The allegations were aired on Nine Entertainment’s 60 Minutes last Sunday night and in a series of reports in Nine’s newspapers.

As the market opened on Monday, shares in the casino operator fell 2.1 per cent, the biggest loss in one day in more than three months.

At 10.30am AEST on Monday, the shares had dipped 1 per cent to $12.54.

Crown tight lipped, but at what cost?

Crown told 60 Minutes it doesn’t publicly comment on its arrangements with junket operators or individuals and there was no further comment on Monday morning.

The sense from within the Crown camp is that it doesn’t believe there is much new in the allegations raised by the program.

Insiders say it is in almost constant contact with gaming regulators, the anti-money laundering agency and law enforcement in the natural course of doing business.

Junket operators are thoroughly vetted by the company and regulators.

The view within the Crown camp is while there is always room for improvement, to some extent it is reliant on the police to help identify any problems that might slip through the cracks.

Packer, Ho and every Crown investor would surely benefit if Crown comes out and explains the way it establishes junket operator links, how it vets these operators and how it will review its arrangement to ensure the highest probity, the Financial Review reports.

Packer has said he was a passive figure during the tumultuous time in October 2016 when 19 Crown staff were arrested, charged, convicted and jailed in China – he wasn’t a sitting director and hadn’t been for some months.

He has taken more of a back seat now having left the board in March last year after another stint as a director and on May 30 this year sold 19.99 per cent to Ho, reducing his shareholding to 26 per cent.

Nonetheless, a huge chunk of Packer’s fortune remains tied up in Crown.

Whether his intention is to remain a long term investor or not – and may say his actions this year suggest he’s a potential seller – his wealth will remain tied to the company for some time to come.

Crown’s latest accounts show that more than 15 per cent of revenue flows from VIP play, but the reputational hit could be much bigger.

If Crown fails to address the allegations in a substantive, public way – and announcing a review of its junket arrangements would be an important first step – then the calls from regulators and politicians in Victoria and Western Australia for action will grow.

The heat may be even more intense in New South Wales, where Crown is building a casino that is designed to cater for VIP punters, most of whom will be coming from Asia.

Melco’s buy of Crown green lighted by Beijing

Melco Resorts & Entertainment boss Lawrence Ho has revealed he was given the green light by Beijing before proceeding with the acquisition of a 19.99 per cent stake in Australia’s Crown Resorts.

Asgam reported in June that the deal, which will see Melco acquire 145.5 million shares from James Packer’s CPH Crown Holdings for a total consideration of US$1.22 billion came less than three years after 19 Crown Resorts employees were arrested in mainland China for promoting gambling.

At the time, the two companies were still partners in Macau and the Philippines under the Melco-Crown brand.

In an interview expected to appear in the July issue of Inside Asian Gaming, Melco’s Chairman and CEO confirms he spoke with both the Chinese and Macau governments before buying into the Australian casino operator.

“I have regular dialogue [with Beijing] and I’ve had my courtesy talk, and Beijing and Macau were supportive,” he said.

“At the same time, they understand that as a company that’s listed in the US, we’re obligated to do our own thing. But even the couple of quiet talks we had were supportive.”

On the topic of government approvals, Ho also explained that he has considered combining the listing of US-listed Melco Resorts and its parent company Melco International Development Ltd, but had resisted ahead of Macau’s looming licence re-tendering.

“We’ve looked at that,” he said, “but especially with licence renewal on the horizon, the government likes that Melco International controls Melco Resorts and that Melco International is a Hong Kong-listed company that I control. But we’ll look at that in the future,” he said.

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