Melco Resorts wins challenge to NSW gaming regulator’s Crown probe

The inquisitors of the Crown inquiry have been left scrambling after a ruling on its powers.

Billionaire Lawrence Ho and James Packer. Picture: Bloomberg

The inquisitors of NSW’s Crown Resorts casino inquiry have been left scrambling on the eve of the investigation’s first hearing, after a landmark Supreme Court judgment found it did not have the powers of a royal commission.

The judgment, which was handed down by NSW Supreme Court judge Christine Adamson on Tuesday morning, is a major setback for what was heralded to be a no-holds-barred inquiry into Crown’s casino operations, including its alleged “criminal infiltration” by money launderers.

The humiliating blow for the NSW government follows an 11th-hour legal challenge by Melco Resorts, the casino empire owned by Macau gaming tycoon Lawrence Ho, which argued that the inquiry “isn’t and never was a royal commission”.

Melco told the court the inquiry by the NSW Independent Liquor and Gaming Authority had wildly overstepped its powers by insisting Melco hand over nine documents that would breach their professional lawyer-client privilege.

Justice Adamson agreed, ruling there was a lack of clear ­language in NSW’s ­Casino Control Act and it could not be interpreted to give the inquiry the power to breach such a fundamental common law right.

The judge went a step further, pointing out that the NSW parliament appeared to have left it to the courts to do their “dirty work” in identifying the ­actual powers of NSW gaming ­inquiries.

She found the court “should not be left to guess” about what powers the inquiry’s commissioner had.

It was not the role of the court, she said, to help “parliament to avoid confronting the inevitably controversial question whether, in inquiries held by (ILGA) ... it is desirable to abrogate ­funda­mental privileges and rights of witnesses and persons required to produce documents”.

“If parliament intended that ... it was obliged to make its intention clear,” she said.

Launching the inquiry in January, commissioner Paddy Bergin SC said the inquiry would conduct a ­forensic inquiry into the alleged “criminal infiltration” of Crown’s casino operations, using the full powers of a royal commission.

The NSW Attorney-General, Mark Speakman, is now “considering the prospects of an ­appeal” against the decision.

The ILGA is also assessing the impact of the Supreme Court’s decision on the running of the ­inquiry, which is due to start on February 24.

Melco Resorts refused to comment on Tuesday, along with Crown Resorts and billionaire James Packer’s private company, Consolidated Press Holdings, which holds the majority share in Crown Resorts.

Mr Packer is expected to appear as a star witness at the wide-ranging inquiry, which will look into everything from alleged criminal links to Crown Resorts’ casino operations in Australia and abroad, as well as the now failed share deal between Mr Packer and Mr Ho.

The inquiry had proposed to investigate whether Melco Resorts’ ties to Mr Ho’s 98-year-old father, Stanley Ho, could be in breach of Crown Resorts’ licence for the $2.4bn high-roller casino that Mr Packer has been building at Sydney’s new harbourfront precinct, Barangaroo.

CPH and Crown Resorts both face scrutiny on why Crown failed to inform the Crown Resorts board of the proposed share sale to Melco, despite the fact that Stanley Ho was on the list of entities banned from having any involvement with the Barangaroo casino licence.

Melco last week announced it was abandoning its planned purchase of the second tranche of CPH Crown shares because of the devastating impact of the coronavirus on its gambling operations in Macau.

That has raised questions as to whether Melco’s fitness as an ­associate of a casino licence holder is any longer relevant to the ­inquiry, given it no longer plans to expand on its 9.9 per cent stake in Crown.