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Crown suspends junket operations until 30 June 2021

| By Aaron Noy
Australian operator Crown Resorts will suspend all of its activity with junket operators until 30 June, 2021 as it undertakes an internal review of the business segment, amid the New South Wales Independent Liquor & Gaming Authority’s own review into the operator.

The Authority launched the inquiry after Asian gaming giant Melco agreed to purchase a 19.99% stake valued at approximately AUD$1.76bn (£981.9m/€1.06bn/US$1.19bn) in the operator, a deal that raised question in the Australian press about Melco’s suitability as an owner.

While Melco ultimately backed out of the deal, the Authority opted to continue the investigation, looking into allegations including those that Crown or its agents or affiliates “engaged in money-laundering, breached gambling laws and partnered with junket operators with links to drug traffickers, money launderers, human traffickers, and organised crime groups”.

Crown did not say whether the internal review and suspension of junket activities was directly related to the inquiry, but its chief executive Kenneth Barton testified before the committee last week, as did finance director Michael Johnston and secretary and general council Mary Manos.

The operator said the segment at its Melbourne and Perth venues has been worth 7% of earnings before interest, tax, depreciation and amortisation (EBITDA) over the last five years. In the 2019-20 fiscal year, the segment made $440.1m in revenue.

In addition, the operator has begun a search for a new head of compliance and financial crimes.

The news follows the New South Wales government’s launch of a consultation on a series of proposed changes to help clubs and hotels in the Australian state minimise gambling harm. The rules include a requirement for clubs and hotels to actively identify and assist gaming machine players displaying problem gambling behaviour, rather than only taking action when they specifically ask for help.

Crown also said it would look to open the new Crown Sydney Hotel Resort, for which construction completed in March, “on or around 14 December 2020”.

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