Crown shares are sliding again on ballooning scandal allegations

Crown Resorts Ltd (ASX: CWN) is facing lurid allegations.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Crown Resorts Ltd (ASX: CWN) share price is down 1.3% to $11.87 today and is now down around 6% since allegations emerged in the Nine Entertainment Fairfax Media (AXS: NEC) that the casino operator's marketing teams in China had connections to a Melbourne brothel owner and organised criminals in China, among other accusations.

According to news reports in the Guardian a Crown 'whistleblower' has also alleged that high-rolling gamblers from China also obtained drugs and sex workers when in Melbourne to visit Crown's casinos. 

Back in October 2016 a large number of Crown staff were also arrested and imprisoned in China for varying amounts of time due to allegations they were illegally marketing gambling activities or 'junckets' to Chinese nationals. 

While the allegations are not likely to have any material impact on Crown's cashflows unless they put off Chinese high rollers, investors should remember casino operations remains a supposedly tightly regulated space in Australia. 

According to news reports the federal government has now ordered an Australian Commission for Law Enforcement Integrity inquiry into the allegations and the behaviour of Crown and other stakeholders.

It's state governments that issue licences to casino operators with Crown retaining a virtual monopoly in Melbourne thanks to its Victorian state license, although it also remains dependent on the NSW state government for a license to operate a super-luxury gambling den in Sydney soon. 

Motley Fool contributor Tom Richardson has no position in any of the stocks mentioned.

You can find Tom on Twitter @tommyr345

The Motley Fool Australia owns shares of and has recommended Crown Resorts Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

A happy young couple lie on a wooden deck using a skateboard for a pillow.
Share Gainers

These were the best-performing ASX 200 shares in March

These shares made their shareholders smile in March thanks to some very big gains.

Read more »

Businessman using a digital tablet with a graphical chart, symbolising the stock market.
Opinions

2 ASX shares I have been buying in 2024!

I’m a believer in the long-term outlook of these stocks.

Read more »

Stock market chart in green with a rising arrow symbolising a rising share price.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a massive day for the ASX 200, with a new all-time high recorded.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Technology Shares

This ASX tech stock rocketed 60% in March! Can it keep on delivering?

After soaring in March, the ASX tech stock is now up 169% since this time last year.

Read more »

Broker Notes

Brokers name 3 ASX shares to buy now

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Burgundy Diamond Mines, Clarity Pharmaceuticals, EML, and Zip are sinking today

These ASX shares are ending the week in the red. But why?

Read more »

A young women pumps her fists in excitement after seeing some good news on her laptop.
Share Gainers

Why Mesoblast, Newmont, Pilbara Minerals, and Platinum shares are jumping

These ASX shares are ending the week strongly. But why?

Read more »

a young boy dressed up in a business suit and tie has a cute grin and holds two fingers up.
Opinions

2 of my top ASX 200 shares to consider buying before April

I would happily exchange dollars for these two shares right now.

Read more »