Melco International CEO Lawrence Ho has criticized former joint venture partner Crown Resorts for its marketing in China, where the promotion of gaming is banned. In an interview with the Financial Times this week, the Macau casino mogul said that Crown engaged in indiscreet marketing activity that riled the Chinese government.
As the world’s largest gaming market, the Chinese enclave of Macau relies on players from mainland China, where gaming and the promotion of gaming is strictly forbidden. There are currently 14 Crown employees who have been held in a detention centre in Shanghai since last October, where they are awaiting trial over “gambling-related crimes” of marketing to Chinese residents. The employees face up to three years in prison for marketing activity but if the charges extend to money laundering, they could be facing much longer sentences.
The 12-year joint venture between Melco and Crown recently ended as Crown was looking to reduce its net debt and finance future projects. Mr. Ho did not directly blame the marketing activity and arrests for the spilt of the joint venture but did say it played a factor. “James Packer [CEO of Crown Resorts] and myself are still great friends,” Mr. Ho told the Financial Times. “But my view and his view on China and the world was different at the time – I wanted to double up and he wanted to focus more on his domestic Australian assets.”
Mr. Ho added that he recommended lawyers to Crown, but did not become involved as “our marketing activities and Crown’s were totally separate.” He said Crown’s aggressive marketing tactics were not “discreet” and the employees were “running around offering credit, talking about collection”. Last October’s arrests and the ongoing investigation hit Crown’s stock value, meanwhile Melco is continuing its international expansion plans. Mr. Ho also mentioned a conviction could be cause negative consequences in Japan.
A spokesman represented Mr. Ho later said that the comments expressed in the interview weren’t “singling out Crown” for the marketing activity in China, but were instead “general comments on the industry overall.”