The coronavirus epidemic that has hit the mainland of China seems to have more effects on the gaming industry than many would have expected.
The latest update has it that the virus has already affected import and export related businesses in and from China, as well as the hospitality industry. Along the same line, the CalvinAyre.com, in a news article reports that casino operator Melco Resorts & Entertainment has postponed its plans to purchase extra shares at its rival casino, Crown Resorts.
The announcement was made on Thursday during a public press where MRE informed its investors that it had decided to slow down on all its 2020 plans. MRE informed the public that it had decided to pause on the deal due to the ongoing coronavirus epidemic. So far over 20,000 people have been diagnosed with the virus in mainland China, with over 300 of the cases resulting in death.
The epidemic has had traumatic effects on the Asian gaming industry. So far, foreigners in China have reduced by more than half. Just the other day, Macau authorities ordered the closure of all casinos in Macau for the next 15 days with a possible extension of the current situation is not put under control.
MRE has given the coronavirus as part of its reason why it has backed down on the deal. The gaming operator also added it does not intend to boost its 10% stake at Crown Resorts. Besides, it does not plan to seek representation at the Crown’s board of directors.
In May 2019, MRE came to an agreement with Corn Resorts. Under the deal, MRE was to purchase 20% of the shares in Crown Resorts. However, the deal was paused in August after some dirt was dug up on the CEO.
The Australian regulators discovered that Lawrence Ho, the MRE CEO, was linked to Stanley Ho. It is claimed that Lawrence has held different director positions at companies owned by Stanley Ho who is his father.
There has been a rumor going around that New South Wales had requested to see certain documents regarding the deal between MRE and Crowns. On Wednesday, MRE moved to court seeking to bar New South Wales from accessing the documents it had requested.
On Thursday, a local media reported that Christine Adamson, the NSW Supreme Court Justice, had listened to the case but did not give a final ruling. However, she acknowledged that there was some urgency in the matter.
Therefore, it needed to be sorted out as soon as possible. Currently, MRE has so much on its plate as it is focusing on its operations in Macau, Manila, and Cyprus while also trying to acquire a license in Japan.
The announcement by MRE seemed to receive some traction from investors as its shares went up by 2.4% on the Nasdaq exchange. At the same time Melco International Development, MRE’s parent company, saw its shares rise by 5.4% on the Hong Kong exchange.