Casino Operator Faces Lawsuit — WSJ – Fox Business

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (December 5, 2017).

Continue Reading Below

A new lawsuit alleges Crown Resorts Ltd. misled investors about the risks involved in its efforts to woo lucrative Chinese high-rollers, the latest fallout for the Australian casino operator after its employees were arrested in China for gambling crimes last year.

The class action was filed in the Federal Court of Australia by law firm Maurice Blackburn on behalf of shareholders who purchased Crown stock between Feb. 6, 2015, and Oct. 16, 2016. Michael Donelly, senior associate at Maurice Blackburn, said hundreds of shareholders had registered to participate and that the case is similar to others that were settled for more than 100 million Australian dollars (US$76 million).

In a brief statement, Crown, which booked revenue of about A$3.2 billion in the most recent fiscal year, acknowledged the lawsuit had been filed and promised to “vigorously defend” itself against the allegations.

Crown shares fell 14% on Oct. 17, 2016, when Crown said that some employees in China had been detained. The episode sent chills through the global casino industry, which had targeted Chinese VIP in recent years, and Crown’s VIP revenue in Australia ended up falling 49% in the fiscal year. Other casino companies in the region said their VIP revenue also fell after the detentions.

Jason O’Connor, an Australian who was Crown’s head of international VIP operations, was charged and pleaded guilty along with 18 other current and former employees, including two other Australians and one Malaysian. Mr. O’Connor and four others received 10-month sentences and 11 were given nine-month sentences. That group of 16 were fined an equivalent of A$1.7 million. Mr. O’Connor

Read More Here...

This entry was posted in Casino Gambling Stocks News. Bookmark the permalink. Follow any comments here with the RSS feed for this post. Trackbacks are closed, but you can post a comment.