Crown blames high-roller loss on weak market
Crown Resorts has blamed a 34 per cent dive in high-roller turnover on weak market conditions and “negative publicity” stemming from revelations the casino giant it went into business with “junket” tour operators with links to organised crime.
The Sydney Morning Herald reports that the company, which is 36 per cent owned by James Packer, said on Wednesday that its casinos in Melbourne and Perth were being hit by the coronavirus outbreak due to restrictions on travel from China, but did not update the market on the full extent of the impact.
Using “normalised” figures, which applies a long-term win rate to its gambling turnover, to strip out the impact of lucky or unlucky streaks by its high-stakes customers, Crown reported an 11 per cent fall in net profit after tax to $172 million in the six months to December 31.
VIP gambling turnover fell 34 per cent to $13 billion, while group-wide normalised revenue was down 5 per cent to $1.4 billion.
Crown’s recently installed chief executive Ken Barton said in a statement that the result reflected “mixed trading conditions.”
“VIP program play turnover at our Australian resorts was down…with the business impacted by a continuation of softer market conditions, exacerbated by recent negative publicity,” he said.
On a statutory basis, including a more favourable than usual win rate in VIP gambling, Crown’s net profit increased 25 per cent to $218 million.
Poker machine and main-floor gaming revenue was flat at $872 million, while non-gaming revenue, such as from hotel rooms and restaurants was up 2 per cent to $408 million.
Mr Barton was promoted from chief financial officer to chief executive officer three weeks ago, replacing long-standing Packer family lieutenant and executive chairman John Alexander, following a tumultuous 12 months for the company.
Former Howard government minister Helen Coonan took on the role of chairman in the reshuffle, which Crown said was in response to feedback from proxy advisors and shareholders who were unhappy with Crown’s unusual executive structure.
Hong Kong casino group Melco Resorts agreed to buy a 20 per cent stake in Crown from James Packer in May and signalled its intention to increase its ownership further.
That deal fell over a fortnight ago, with Melco saying it would increase its investment beyond the 10 per cent it had already paid Mr Packer and would not seek board seats.
Meanwhile, a powerful inquiry conducted by the New South Wales gambling regulator is preparing to examine in detail both Crown’s involvement with junkets and whether the Melco deal breached Crown’s Sydney casino licence.
Crown’s licence for the new casino it is building at Barangaroo bans any involvement from Melco boss Lawrence Ho’s father, Stanley, and associates because of his alleged links to organised crime.
Mr Barton said Crown was “cooperating fully” with the New South Wales and other inquiries underway into the group, and “looks forward to working with regulators on any recommendations that may follow.”
Crown declared an interim dividend of 30 cents, flat on the same period last year.
Crown Sydney to open on Christmas Day
Crown’s latest venture in Sydney is one of the most anticipated projects in the harbour city, as it is expected to give a new look to the Barangaroo waterfront.
The massive addition will include a hotel, apartments, restaurants and a VIP-centric casino that are slated to open on Christmas Day this year.
Casino Aus reported in January that construction on the project began in 2016, though sometimes stalled periodically due to legal battles and other red tape.
The estimated completion date has shifted numerous times, with James Packer saying the venture will open on December 25.
Earlier this month, the billionaire investor and Crown Resorts’ largest shareholder Mr Packer emerged from a mostly self-imposed exile from public life to tour the Crown Sydney development site.
He seemed pleased with the progress of the $2.4 billion project at Barangaroo.
In fact, he was so pleased that he announced to the media it would open to the public on Christmas Day.
When the project first began, the opening date was expected to be early 2020 for the first tower and the end of 2020 for the rest of it.
Along the way, the opening was delayed, with 2021 slated as the opening date.
Packer was particular though, naming Christmas Day of this year in his first public appearance in more than a year.
“It’s really pleasing,” Packer said tot he media, referring to the opening begin three months earlier than planned.
“We are truly indebted to our builders, architects and tradies who have made this possible.”