Crown Resorts, the Australian casino operator is breathing a sigh of relief after it played very lucky with its very thin number of Asian VIP gamblers in the first half of its fiscal year.
As reported by calvinayre.com, Crown announced on Wednesday, that in the second half of 2019, its local casinos had generated ‘normalized’ revenue of AU$1.46b (US$975.5m), decrease of 5.2% from the same period in 2018. Normalized earnings dropped 9.7% to AU$390.4m while net profit after tax declined 11% to AU$172.7m.
‘Normalized’ figures even out the sporadic wild discrepancy in VIP gambling activity, an approach preferred by Aussie gaming companies since it frequently papers over weighty setbacks. Crown’s statutory results in this case, were in fact more impressive, but live by the normal, die by the normal.
As a result of the sector-wide VIP gambling go-slow, all Asia-Pacific casino operators have been suffering; however, Crown’s situation is especially acute due to the public relations nightmare it’s gone through ever since last summer’s 60 Minutes exposé and the possible threat this causes to Crown’s Sydney casino license.
Crown’s total VIP gambling revenue fell 34.2% to AU$13.1b in H1; however, its flagship property, Crown Melbourne, saw a VIP win rate of 2.3%, more than twice the H1 2019 rate of 1.02% and almost a full point higher than the theoretical 1.35% rate.
As a result, though Melbourne’s VIP revenue fell by almost two-fifths, its VIP win increased more than one-third to AU$239.6m. And though ‘main floor’ gaming turnover was flat at AU$630.8m, the Melbourne property’s earnings increased almost 23% to AU$333.5m.
By comparison, Crown Perth’s VIP revenue dropped by three-quarters to AU$14.6m while its ‘main floor’ revenue rose up 2.2% to AU$242m. Perth’s earnings dropped 12.5% to AU$120.4m.
Crown Aspinalls, the UK-based operator – or, as it’s possibly known in the CFO’s office, Crown Rounding Error saw total revenue rise 6.7% to AU$34.2m but earnings almost doubled to AU$5.6m together with the VIP win rate.
Crown Digital, which includes the Betfair Australasia online betting exchange and DGN Games, US-based social gaming operation, reported its revenue falling 4.6% to AU$62.8m but a double-digit decrease in DGN’s costs pushed incomes up 87.5% to AU$14.1m.
Ken Barton, Crown CEO, said Crown had “recently experienced softer trading conditions” because of the coronavirus crisis, “particularly over the Lunar New Year period.” The company didn’t give further details, saying just that it was following the direction of relevant health authorities.
Also, Barton didn’t offer much detail about some of Crown’s recent controversies, including the New South Wales gambling regulator’s inquiry into whether Melco Resorts & Entertainment is fit to own a substantial stake in the company. Barton only said that Crown was “cooperating fully in relation to the various regulatory inquiries underway.”
Speaking of Crown Sydney, supposing the NSW investigation doesn’t result in Crown giving up its license, the plan is for the tower to “open progressively from December 2020, with grand opening celebrations planned for early in 2021.”