Wed, Jan 2, 1:07pm by Staff Writer
Construction continues on Crown Resorts’ newest casino in Sydney’s Barangaroo despite a turbulent 2018 for the sector.
There was a pull back in consumer spending, China’s softening economic growth and volatile high-roller revenue that saw big share price plunges for Australian casino operators.
Crown Resorts has lost neatly 20 per cent in the last half of 2018, with its share price dropping from $14.32 to $11.58. That is equivalent to $2 billion of its market value.
With a new Sydney casino set for completion in 2021, all eyes now turn to the impact the casino will have on the local and national landscape.
Of special interest is how Crown will go about luring lucrative VIP gamblers and what programs they will enact aimed at attracting wealthy foreign gamblers.
Gaming industry analyst from JP Morgan Donald Carducci said: “Barangaroo is becoming a larger part of the conversation as analysts are now starting to considering how to factor it into their numbers and its impact on both Sydney and Star in 2019.”
There is a consensus that Crown will have approximately 125 VIP gaming tables in its new casinos and if each can generates $2 million, this will create $250 million in revenue per year, according to The Sydney Morning Herald.
The question is whether this revenue will be from market growth or taken from its nearby competitor the Star Sydney.
Crown has had good recent success in its VIP gambling programs in Melbourne with revenue rising 73 per cent to $591 million last year.
This was after revenue from high rollers disappeared in the wake of arrests and criminal convictions of Crown Resorts staff in 2016.
Australian inbound gamblers may choose Sydney over Melbourne for its choice of casino and that could have a negative impact on Crown’s Melbourne operations Mr Carducci asserted.
For the first time in 2018 there were more Chinese visitors to Australia than any other nationality, with 1.39 million Chinese people visiting Australia according to government statistics. This represented a 13.2 per cent rise in visitor numbers.
Star Entertainment chief executive Matt Bekier has remained bullish about his casino’s prospects despite an impending rival.
— Sydney Informer (@sydneyinformer) January 1, 2019
“If you look at the typical VIP guest who goes to Macau for example, they play in 2.6 casinos over three days. I think the exact same thing is going to happen in Sydney,” Mr Bekier said.
The traditional super high rolling Chinese gambler has been one that the Star has steered away from relying on solely in recent times.
It has instead shifted its focus on drawing patrons from South-East Asian markets to its hotels and casinos.
The Star has successfully leveraged itself towards high-spending Chinese tourists through attractive partnerships with Hong Kong-based Chow Tai Fook and Far East Consortium, which has a loyalty program of 6 million people.
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