Hong Kong 's Melco cooperating with Japan casino bribery probe: source

By Tim Kelly and Nathan Layne

TOKYO (Reuters) – Hong Kong casino operator Melco Resorts & Entertainment Ltd (O:) is cooperating with Japanese prosecutors in a widening bribery investigation of a senior Japanese ruling party lawmaker, a source said on Wednesday.

“Tokyo prosecutors sent Melco a letter and visited the office on Jan 17 after receiving no reply,” said the source, who was briefed on the matter. Melco’s office was empty that day, but it is now cooperating with investigators, he said.

The source, who asked not to be identified because he is not authorized to talk to the media, also confirmed the authenticity of a photograph seen by Reuters that showed a notice from prosecutors taped to Melco’s office door.

Melco declined to comment on whether it is under investigation. A spokeswoman at the prosecutors office said it did not comment on individual cases.

The widening probe could bolster opposition in Japan to gaming companies vying for licenses to open casino resorts in Japan after Prime Minister Shinzo Abe last year eased gambling restrictions to allow integrated resorts like those in Macau or Las Vegas.

Prosecutors last month arrested Tsukasa Akimoto, a former vice minister in the Cabinet Office in charge of casino policy, on suspicion of accepting more than $50,000 worth of money and gifts from employees at a company that wanted to set up a casino in Japan. Akimoto has denied the bribery allegations.

Prosecutors did not name the company, but public broadcaster NHK and other Japanese media identified it as China’s 500.com.

The Shenzhen-based company said in December it had formed a internal committee to investigate the allegations and that Xudong Chen, Chairman of the Board, had resigned.

Other companies interested in building resorts in Japan include MGM Resorts International (N:), Las Vegas Sands Corp (N:), Wynn Resorts Ltd (O:) and Galaxy Entertainment Group (HK:).

Japan is viewed as one of the world’s largest and most promising untapped casino markets. Melco and other operators have said building a casino resort there would cost $10 billion or more.

In a bid to overcome gambling’s seedy image in Japan, Melco has collaborated with Tokyo University of Arts to promote Japanese culture, and offered vacations for students living in areas hit by Japan’s 2011 earthquake.

Public support for Abe’s casino plan, however, has waned with backing for casinos as low as 30% in some polls.

Japan has authorized licenses to build three resorts with Tokyo, Yokohama and Osaka among the cities expected to bid for them.

That process, may be pushed back beyond next year because of the bribery scandal involving Akimoto, the Asahi newspaper reported on Tuesday, citing government and ruling party sources.

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