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The new face behind Crown’s takeover

Wed, Jun 5, 8:40am by Staff Writer

There’s a new force in Australian gambling.

Lawrence Ho is no stranger to those in the casino industry, nor to the regulators in charge of keeping them clean.

The Sydney Morning Herald is reporting that the Hong Kong-based billionaire’s Melco Resorts & Entertainment became a major shareholder in Australia’s Crown Resorts on Thursday night when it bought a 19.99 per cent stake from James Packer worth $1.76 billion.

Ho has said he is interested in buying an even bigger share of Crown, which has casinos in Melbourne and Perth and is building a $2.2 billion casino on the banks of Sydney Harbour at Barangaroo.

The 42-year-old is executive chairman of Melco, which runs casinos in the Chinese gaming mecca Macau and the Philippines, and was a joint venture partner with Crown for 12 years up until 2016.

Ho and Packer were said to have developed a close relationship during that time and had drawn up plans to build a new resort on Las Vegas’ famed casino strip.

As well as their involvement in the gambling business, the pair have something else in common: their fathers’ reputations following them wherever they go.

Lawrence is the son of Dr Stanley Ho, the controversial 97-year-old godfather of gambling in Macau.

He built the island’s first casino in 1964 and had a casino monopoly in what was then a Portuguese colony for the next 40 years, ferrying punters across from Hong Kong and becoming one of its richest people.

Stanley Ho’s reputation makes NSW licence uncertain

Dr Ho has long been accused of having close ties with Triad criminal gangs, including through the “junket” operators that attract high-spending gamblers from mainland China, where it is illegal to gamble.

Several of Dr Ho’s 17 children, born to four women he refers to as his “wives” are involved in the casino business.

They are not accused of any criminal conduct.

When the New South Wales Independent Liquor and Gaming Authority approved Crown’s Barangaroo development, it insisted that Crown – then in joint venture with Melco in Macau – bar Stanley Ho from any involvement.

The agreement said Crown will prevent “any new business activities or transactions of a material nature between Stanley Huang Sun Ho or a Stanley Ho associate and Crown.”

Dr Ho resigned as a chairman of Melco International in 2006 while Victoria’s gambling authority assessed the Melco-Crown joint venture, with the regulator noting it was satisfied he could not “exert any influence with respect to this venture.”

The US state of New Jersey accused casino giant MGM of questionable conduct for associating with Dr Ho’s daughter Pansy Ho in2009, through their jointly-owned Macau casino.

The state, home to the Atlantic City gambling hub, cited documents stating Stanley Ho had direct associations with known gangsters and said Pansy Ho’s relationship and financial ties with her father and alleged organised crime figures made her “susceptible to influence by unsuitable persons.”

New Jersey authorities also referred to a 2002 report into organised crime activity in Macau casinos published by the Queensland University of Technology.

It said the VIP rooms in Dr Ho’s casinos created a “lawless space” where organised crime gained a foothold in the gaming industry, and where drugs, prostitution, loan sharking and debt collection were on offer.

Since the handover of Macau from Portugal to China in 1999 the casino industry has opened up, and overtaken Las Vegas as the world’s biggest gambling destination, with an industry worth $55 billion a year.

The Nasdaq-listed Melco and Crown formed a joint venture called Melco Crown Entertainment in 2004, which had two casinos in Macau, as the Australian company looked to expand offshore.

There were plans to open a casino on Las Vegas’ famed gambling strip and expand across Asia, but that fell apart in 2016 after 18 Crown employees were arrested in China for gambling crimes.

Packer remains Crown’s biggest investor, with 26 per cent of its shares, but that could change, with Melco saying it “welcomes the opportunity to increase its ownership in Crown.”

Australian laws would require Melco to make a full takeover bid for the ASX-Crown if its stake rises above the 19.99 per cent it has just snapped up.

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