Melco Resorts and Entertainment will not have to produce documents deemed to be protected by legal privilege to a public inquiry into its suitability to hold a state gaming license after the NSW Supreme Court ruled this week that the inquiry does not have the sweeping powers of a royal commission.
The decision follows a recent legal challenge by Melco against the NSW Independent Liquor and Gaming Authority in which it argued that the regulator was exceeding its authority in its inquiry into the Asian gaming operator’s planned acquisition of a 19.99% stake in Crown.
Melco has since abandoned plans to acquire the second tranche of Crown shares, leaving it with just the original 9.99% tranche of shares it purchased from James Packer’s CPH Crown Holdings Pty Limited in June.
The Supreme Court ruled on Monday that it was not evident the inquiry was entitled to employ the powers of the NSW Royal Commission Act and that, as such, Melco’s “privileges, including legal professional privilege, are not abrogated for the purposes of the inquiry.”
The inquiry, launched by the NSW Independent Liquor and Gaming Authority in August, is investigating multiple facets of the Melco-Crown deal including Crown’s own suitability to hold a casino license ahead of the upcoming launch of its AU$2.2 billion Crown Sydney at Barangaroo and links to Melco Chairman and CEO Lawrence Ho’s father Stanley Ho – the former Macau casino magnate with whom Crown is prohibited from conducting business as per a 2014 agreement with the regulator.
Melco had originally agreed to purchase a combined 19.99% stake in Crown via two separate transactions but cancelled the second tranche last week citing the impact of the Coronavirus and subsequent need to focus on its existing properties across Asia.
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