Mon, Aug 19, 12:44pm by Staff Writer
Star Entertainment’s revenues from overseas VIP visitors have plummeted, with the latest reports showing the casino group’s earnings have dipped more than 35 per cent in a year.
Casino Buzz reports that Star posted that because of decrease revenue from VIP high-rollers, its normalised net profit after tax is down 8.4 per cent to $224 million.
The company owns and operates casinos in Sydney, Brisbane and the Gold Coast.
The prolonged US-China trade war and the slowdown of the Chinese economy have been attributed to the drop in VIP footfall.
Most of the VIP high-rollers visiting Star’s casinos in Australia are visitors from mainland China.
Also, the ongoing investigations of the Crown Resorts’ involvement with Chinese Mafias and the fast track visa approval for its overseas customers has been taking a toll on the number of visitors from the region.
Last week, the New South Wales Independent Liquor and Gaming Authority confirmed it would be investigating Melco Resorts’ purchase of Crown’s stakes.
Crown has categorically denied the allegations and said it would cooperate with authorities.
Commenting on the declining revenues, Star Entertainment’s chief executive Matt Bekier said: “The group remains focused on executing our long-standing strategy of investing to drive visitation and earnings to our network of properties in sought-after destinations.”
Casino tycoon Lawrence Ho’s Melco Resorts says it plans to complete the purchase of another 10 per cent stake in Crown Resorts as agreed with billionaire owner James Packer, despite ongoing investigations regarding whether or not Crown has breached its licence for a new Sydney casino.
The Sydney Morning Herald reported last week that Melco agreed to buy a 20 per cent stake in Crown worth $1.76 billion in May from Mr Packer, with one 10 per cent block transferred shortly after and another 10 per cent to change hands before September 30, which the company says it is obliged to complete under the sale contract.
The transaction is under a spotlight, with the New South Wales gambling watchdog last week launching a probity investigation that will examine Crown’s links to alleged crime figures following allegations last month.
The Star's VIP program profits down 35 per cent from 2018 https://t.co/XLGmMyMQcc
— Vik Bataille (@VIKBataille) August 16, 2019
The Independent Liquor and Gaming Authority’s investigation will also examine Melco’s links to Mr Ho’s father, the Macau casino billionaire Stanley Ho, who has long faced allegations of links to organised crime.
Because of these allegations, Crown’s licence granted in 2014 for its $2 billion casino in Sydney’s Barangaroo, due to open in 2021, forbids it from dealing with a list of companies and individuals associated with Stanley Ho.
That list was made public for the first time last week. It shows that one of the banned companies is Lanceford Company Ltd, which Melco CEO Stanley Ho was a director of until shortly after the Crown transaction was made public on May 31.
A decline in spending by wealthy foreign high-rollers across The Star’s casinos is not a new trend, with figures from February showing the decline has been lingering.
The Australian casino giant has reported a 33 per cent drop in the six months to December 31, 2018 to $20.7 billion, with VIP turnover at its biggest casino in Sydney, down 49 per cent, according to The Sydney Morning Herald.
The house win rate was above average against Asian gamblers, mainly from China, in the half-year period, which helped drive the decline in turnover, The Star said on Thursday.
It explained that gamblers tended to play fewer hands and would tap out earlier when they lost their money faster.
Chief executive of The Star Entertainment Group Matt Bekier said there had also been a noticeable increase in “caution” exercised by wealthy foreign gamblers.
“The caution relates to uncertainly relating to the trade war between China and the US,” he said.
“They just don’t take as much risk as they might have 12 months ago.”
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