AUSTRALIA

Melco agreed in May last year to buy 19.9 percent of Crown, its former joint venture partner, in a two-stage deal worth US$1.2 billion. It bought the first tranche of 67.7 million shares in June last year, but subsequently deferred the acquisition of a second tranche of the same amount to allow time for probity checks by Australia’s regulators.

The extension followed an investigative news report alleging extensive malpractice at Crown, including links to organised crime and fast-tracking of visas for Chinese high rollers.

However, it was not the regulatory probes that scuppered the deal. Melco announced in mid-February it would not pursue the acquisition due to the economic impact of the coronavirus on the region and would not seek a seat on Crown’s board.

The company said at this time it plans to focus on its core business and that its capital will be deployed on investment in “core” assets, such as Macau, the Philippines, Cyprus and its pursuit of a license in Japan.

“While Melco believes Crown has worldclass assets that are complementary to its global business, it is Melco’s belief that, at this time, its capital needs to be deployed on its core assets,” it said.

The two companies broke up a decadelong joint venture in 2017, which had been seen as one of the most successful in the gaming industry. Together, Crown and Melco developed the City of Dreams complex in Macau and Manila.

However, the relationship soured after Crown’s aggressive marketing tactics in Mainland China led to the arrest of 18 employees. Melco CEO Lawrence Ho told the Financial Times at the time that he didn’t endorse the practices being deployed.

A renewed partnership between the operators had been seen as a positive development that would provide Crown with access to Melco’s deep database of Chinese premium customers ahead of the opening of its Barangaroo property later this year.

The VIP-only resort is only permitted to offer table games and will be the second largescale casino in Sydney, which some analysts say may not be able to support the competition.

“We estimate VIPmargins will compress and are unlikely to recover,” JP Morgan wrote in an in-depth analysis of the Australian gaming industry. “Although we believe initial interest in Barangaroo will be strong when it opens 2-3 months earlier than originally announced, the negative impact of two casinos in one location is gambler ‘choice’. Reduced margins from offering better sweeteners to capture local, finite, gambling dollars poses a real risk.”

The firm also said it expects turnover to fall in Melbourne, with inbound tourists likely to choose Sydney due to the new property opening.

“In the lead-up to Barangaroo’s opening at the end of CY20, we believe both casinos will seek to ‘steal’ customers through offerings, sweeteners, and program matching,” it said.

Australia’s operators were already facing an uncertain future for 2020 even before the outbreak of the coronavirus took its toll on travel. The country’s tourism industry has been struggling from the impact of devastating bushfires that have been widely reported worldwide.

The operators are also not expected to enjoy the same level of support from domestic consumers in 2020, given weakening consumer confidence.

Westpac’s consumer confidence levels in the economy decreased by -6.2 percent to 93.4 in Jan-20 vs 99.6 in Jan-19 and down -1.8 percent relative to Dec-19.

Meanwhile, Crown announced a management reshuffle to “better align with contemporary governance practices.” Ken Barton, the chief financial officer of the company, was appointed as chief executive officer and managing director of Crown.

While Executive Chairman John Alexander stepped down and will be replaced by nonexecutive chair, Helen Coonan, a former Liberal senator. She said the new governance structure has been considered for some time and is more in line with the traditional model of a non-executive chair and separate CEO.

Donaco International said in February that the company’s long-time General Counsel and Secretary Ben Reichel would leave the company, continuing the rapid turnover in the top executive ranks.

Reichel first indicated his intention to leave on the eve of last November’s tumultuous Annual General Meeting, at which shareholders voted to ditch most of the existing board of directors.

According to the press release, “Reichel will continue to be available to assist the board and the company after that date via a mutually agreed consultancy agreement.” The Donaco board appointed Marika White as the new company secretary.

Sportradar, has agreed a wide-ranging, multi-year partnership extension with Tennis Australia, leveraging its audiovisual (AV) and data content, encoding technology, and Integrity Services to protect matches and expand their presence across global audiences.

As part of the deal, Sportradar will continue to deliver their AV, data and Integrity Services for the Australian Open, the Grand Slam of the Asia Pacific, including the Main Draw, Qualifiers, and Wild Card play-offs in Melbourne and Zhuhai, China, as well as the ATP 250 Adelaide.

Sportradar will deliver the matches via its AV encoding services, providing high-definition streams for the Australian Open’s official website, app and social media channels, and broadcast partners in multiple territories, including Australia, New Zealand, India, and the Sub-continent, and the Americas.