NSW Regulator Launches Legal Action Against Melco to Recoup Bergin Inquiry Costs

The New South Wales gaming regulator has reportedly launched legal action against Melco Resorts & Entertainment in a bid to recoup around AU$3.7 million (US$2.6 million) in legal costs.

The action relates to the Bergin Inquiry into Crown Resorts, which ultimately found the Australian casino giant unsuitable to hold a gaming license for its AU$2.2 billion Crown Sydney development. The inquiry was called in part to investigate Melco’s 2019 acquisition of a 9.99% stake in Crown from its largest shareholder James Packer, and whether this breached a clause in Crown’s license that prohibited it from working with Macau casino mogul Stanley Ho.

The Bergin Report ultimately found that the sale of shares to Melco did not breach Crown’s NSW license, and by that stage Melco had already sold its stake to The Blackstone Group, however, that hasn’t stopped the NSW Independent Liquor and Gaming Authority (ILGA) from pursuing costs.

According to the Australian Financial Review, ILGA believes it is entitled to recover at least some of the expenses of the inquiry from the Macau casino operator, which is headed by Lawrence Ho.

“In light of the findings of the Bergin report, ILGA considered it appropriate for Melco and Crown Resorts Limited (Crown) to provide payment for the costs of the inquiry,” an ILGA spokeswoman said.

“ILGA reached agreement with Crown in May 2021 … as an agreement has not been reached with Melco, ILGA initiated proceedings.”

The AFR report quotes a Melco spokesman as insisting the company had, “sought to work with ILGA in a professional, fair and reasonable manner throughout our engagement with them on this issue.

“We have previously requested information from ILGA in an effort to reach an amicable resolution. Despite this request, we have not received the information that is necessary for Melco to adequately assess ILGA’s claim,” they stated.

Crown was ultimately found unsuitable to retain its casino license due to concerns over its ties to Asian junkets and the failure of management to implement sufficient anti-money laundering controls.