August 8, 2019 / 9:13 AM / 17 days ago

Australian gaming watchdog to review Melco's $1.2 billion Crown stake buy

FILE PHOTO - A logo on Crown Towers as part of City of Dreams, owned by Melco Crown Entertainment, in Macau, China November 18, 2015. REUTERS/Bobby Yip

(Reuters) - An Australian gaming regulator said it will review Melco Resorts & Entertainment’s (MLCO.O) planned $1.2 billion stake purchase in Crown Resorts (CWN.AX) following local media reports that Crown flouted rules to lure big Chinese gamblers to Australia.

Australia’s New South Wales independent liquor & gaming authority said on Thursday it has ordered Crown and other parties to hand over documents for investigations, adding it will also look into “various matters raised in recent media reports”.

The Age and the Sydney Morning Herald newspapers and the “60 Minutes” television program reported that Crown hired tour operators with ties to drug traffickers to bring wealthy Chinese gamblers into its Australian casinos, among other things. Crown refuted the reports.

Melco said in May that it would buy a 20% stake in Australia’s Crown Resorts from casino mogul James Packer’s investment company, CPH Crown Holdings, for A$1.76 billion ($1.19 billion).

Shortly after the deal was announced, the same gaming regulator had announced a review into Crown’s prized $1.5 billion Sydney casino, as its 2014 approval rested on condition it would not do business with the father of Melco CEO Lawrence Ho, Stanley Ho, who at the time was under investigation in Australia and the United States for possible ties to organized crime.

Melco was not immediately available to respond to a Reuters request for comment. Crown said in a statement it would “fully co-operate” with the inquiry.

Reporting by Devika Syamnath in Bengaluru; Editing by Muralikumar Anantharaman

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