The chairman of Australian casino operator Crown Resorts Ltd said it was “encouraging” that the firm’s VIP gambling turnover from July 1 to October 22 this year was only down 17 percent on the prior-year period. The 2016 calendar period quoted for comparison was just before the detention and then arrest in China – on allegations of “gambling-related crimes” of some key personnel from Crown Resorts’ international VIP business, including executive vice president VIP international, Jason O’Connor.
Crown Resorts’ chairman John Alexander said: “VIP programme play turnover at our Australian resorts was down around 17 percent on the prior corresponding period, however Crown Melbourne [pictured] VIP programme play turnover exceeded expectations.” He was speaking to the firm’s shareholders at the annual general meeting in Melbourne, Victoria, on Thursday, giving highlights of events for the quoted July to October period, which fell outside the fiscal year reporting period.
He suggested this was “encouraging given that most of the prior corresponding period preceded the detention of Crown’s staff in China”.
But the Australian Associated Press reported on Thursday that James Packer – who in January returned to the Crown Resorts board – had said events in China had “forced the Crown directors’ hand in a large degree in relation to Macau,” and had pushed the firm to focus on its Australian business. Crown Resorts disposed in May of its remaining stake in Asian casino operator Melco Crown Entertainment Ltd – now Melco Resorts and Entertainment Ltd.
“We didn’t succeed in a global strategy,” Mr Packer was quoted as saying. In an interview recently, the executive was quoted as playing down the prospect of pursuing a casino licence in Japan.
Donald Carducci, an analyst at JP Morgan Securities Australia Ltd, noted in a Thursday memo that Crown Resorts’ domestic business had grown slightly in the period quoted in Mr Alexander’s update, even as its VIP business had dipped 17 percent. But the analyst added that trading performance for second quarter fiscal year 2018 – which will end on December 31 this year – might give a clearer picture of Crown Resorts’ VIP business.
“Next quarter’s VIP trading is a focus for Australian volume recovery as most of the prior calendar period preceded the detention of staff [in China],” stated Mr Carducci.
In August, Crown Resorts had reported that VIP turnover had plunged 39.7 percent year-on-year in the fiscal year ended June 30, 2017, coinciding with the arrest in China of some of the group’s VIP marketing team.
The relative dependence of the Australian casino market on Chinese VIP players in recent years was alluded to at the annual general meeting of Crown Resorts’ market rival The Star Entertainment Group Ltd, also held on Thursday.
Matt Bekier, managing director and chief executive of the firm, said that during its fiscal year 2017 the company had expanded its sales team “to enable coverage of a broader international footprint”. “We welcomed VIP or premium mass guests from 13 countries and continue to access new markets,” he stated.
But he added: “The Star Entertainment Group faces competition domestically and from around the world when it comes to attracting tourists from China and other international markets.”
Mr Bekier also noted that the Australia China Business Council expected the number of Chinese tourists to Australia to triple from the current figure of just over 1 million annually, to 3.3 million a year by 2026.
The executive reiterated that the firm had received development approvals for a new 700-key hotel and apartment tower at The Star Gold Coast in the Australian state of Queensland, in a joint venture with Hong Kong-based Chow Tai Fook Enterprises Ltd and Hong Kong-listed Far East Consortium International Ltd. Mr Bekier said his group had also taken possession of the 13-hectare (32-acre) Queen’s Wharf Brisbane integrated resort development site in Brisbane, Queensland, and had started demolition work on the existing buildings at the brownfield site.
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Analyst at Roth Capital Partners