GGRAsia – VIP specialist Crown hit by border rules: interim chair

VIP specialist Crown hit by border rules: interim chair

Oct 21, 2021 Newsdesk Latest News, Top of the deck, World

Australian casino operator Crown Resorts Ltd says the continuing closure of that nation’s border to inbound tourism, and the general disruption wrought by the Covid-19 pandemic, has had a “severe” impact on the company’s performance in the financial year to June 30.

The group decided not to declare or pay a dividend for the period, with annual revenues down by about a third, and the company recording a consolidated net loss after tax, of approximately AUD260 million (US$194.8 million).

Crown Resorts’ interim chairman, Jane Halton, said in remarks filed to the Australian Securities Exchange on Thursday, the day of the firm’s annual meeting, that restrictions on travel domestically between states and territories – and the continuing closure of the Australian border to international visitors – have had a “devastating impact on the tourism industry”.

The annual meeting was held online, due to the pandemic. Shareholders voted against the company’s executive pay plans for a second year in a row, but turned down a motion to oust its entire board.

Nonetheless, holders of 30.7 percent of Crown Resorts’ shares voted against the company’s remuneration report at the virtual meeting, more than the 25 percent threshold required.

Crown Resorts is a former partner of Hong Kong-listed Melco International Development Ltd in the Macau gaming market, and has also been previously a specialist in catering to Asian high rollers at its longstanding Australian venues, Crown Melbourne (pictured), in Melbourne, Victoria; and Crown Perth, in Perth, Western Australia.

Recently it has been the subject of regulatory investigations in those longstanding markets, after a regulatory probe in New South Wales, where it has built in Barangeroo, Sydney, a new property, called Crown Sydney.

In February, Crown Resorts was found unsuitable to be permitted to open a casino at Crown Sydney, and a decision on its gaming licence there is still pending. A public inquiry by the New South Wales regulator heard allegations that Crown Resorts had displayed at its Crown Melbourne venue inadequate oversight of its junket partners for VIP gambling, and had exposed itself to money laundering at that property.

A public inquiry was subsequently opened in Victoria, regarding the way Crown Melbourne did business; and an inquiry was also launched in Western Australia regarding Crown Perth, and possible conflicts of public interest involving state regulatory officials and casino employees.

On Thursday, Ms Halton highlighted that the report from the New South Wales inquiry had “recommended additional changes in key areas” of Crown Resorts’ operations, before the company “could be considered suitable to operate gaming in Sydney.” She added: “Our reform programme has picked up pace across all areas of the organisation.”

The casino operator also said it agreed with its lenders to amendments to its financing arrangements, including a waiver of financial covenants in relation to a December 31, 2021 testing date; and “modifications to the consequences of various casino licence events.” As part of these amendments, Crown Resorts has agreed “not to declare or pay dividends” for the half year ending December 31, 2021.