Media allegations that Australian casino operator Crown Resorts Ltd’s gambling business had been used by criminal organisations to launder money appear to have hit the company’s trading performance since July. Turnover in the firm’s VIP business fell by 46 percent year-on-year from July 1 to October 20, as what the firm terms the “international market” remained under pressure.
The company has also been caught in regulatory probes triggered by media reports of the fast-tracking of visas for a few wealthy overseas gamblers.
Crown Resorts’ executive chairman John Alexander said in an address to shareholders at the firm’s annual general meeting on Thursday that the decline in the high-roller segment reflected the “difficult trading conditions in the international VIP market.”
Across the company’s Australian resorts, revenue from main floor gaming – excluding VIP play – was up 2 percent on the prior corresponding period, while non-gaming revenue was broadly flat, said the executive.
Crown Melbourne’s main floor gaming revenue was up on the previous period while non-gaming revenue was down. Crown Perth’s (pictured) main floor gaming revenue and non-gaming revenue have each shown growth on the prior corresponding period. The company did not provide a breakdown for VIP play between the two properties.
In his address, Mr Alexander lashed out against “a number of interests and activists who continue to pursue an anti-Crown agenda,” and defended the firm from the allegations.
“Let me be clear; Crown does not tolerate any illegal activity by its employees or its patrons,” said the chairman, criticising the “sensationalist and unproven claims” made against the company.
“Crown has no interest in being used by those who seek to do the wrong thing,” stated Mr Alexander, adding that the company is “taking these matters seriously”.
But some shareholders at the meeting criticised Mr Alexander for not mentioning the several probes launched by Australian authorities into the company, according to media reports.
Crown Resorts’ chairman said the company executives could not go into detail about the allegations as the firm was cooperating with investigations by the regulators in Victoria and those in New South Wales. Crown Resorts is building a new property at Barangaroo in Sydney in the latter state.
Media allegations that Crown Resorts’ largely junket-supplied VIP gambling business had been used as a conduit for money laundering by criminals were made public only in late July. Since then, several regulatory authorities in Australia – including federal and state agencies – have launched investigations into the company.
Senior officials at the Australian Border Force and Department of Home Affairs are among witnesses called by the Australian Commission for Law Enforcement Integrity to take part in public hearings starting next week.
In August, Macau casino operator Melco Resorts and Entertainment Ltd announced the deferral of the acquisition of a second tranche of shares in Crown Resorts.
Also in August it emerged that Macau junket investor Suncity Group – which was mentioned in the media reports on Crown Resorts’ more recent VIP business – was closing its VIP rooms at Crown Melbourne, citing commercial considerations.
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Adjusted EBITDA reported by Asian casino operator Melco Resorts and Entertainment for the fourth quarter of 2020