Crown Resorts VIP Casino Revenue Plunges, CEO Lashes Out at Sensational Media
Posted on: August 21, 2019, 09:34h.
Last updated on: August 21, 2019, 11:49h.
Crown Resorts reported statutory net profit of AUD401.8 million ($272.8 million) over the last 12 months through June, a decline of 28 percent.
The Australian casino operator that has integrated resorts in Melbourne, Perth, and Sydney – as well as high-end casino clubs in London – blamed a significant decrease in VIP play from China for the slide. Crown said high-roller sales dropped more than 26 percent.
“Visitation has been good, but average spend has been in decline,” CEO John Alexander told analysts. The VIP decline has been credited to the ongoing US-China trade war that is threatening global economies and reining in leisure spending.
Crown was founded in 2007 by James Packer, who retains part ownership, but is no longer involved in the company’s operations. Packer is amid an effort to sell 20 percent of his stake to Melco Resorts for $1.22 billion. But the deal has spurred an investigation by financial and securities regulators in Australia.
Crown Resorts has been accused by various regulatory agencies of circumventing laws to expedite visits by Chinese VIPs Down Under. Chinese officials allege that Crown has used travel agents with ties to drug traffickers to bring wealthy mainlanders to its Aussie casinos.
Claims that Crown officials have used its financial clout to pressure immigration officials to fast-track visas have also circulated. Alexander says it’s nonsense.
“During the 2019 financial year, Crown again made a major contribution to the Australian economy through its role in tourism, employment, training, and its corporate responsibility programs. Crown’s contributions risk being overshadowed by recent media reporting, which has unfairly sought to tarnish Crown’s reputation,” the CEO stated.
It comes as no surprise that various regulators and other agencies have launched inquiries, given recent media reports and the sensationalist nature of the allegations raised. Crown has zero tolerance for criminal elements, and we view these inquiries as an opportunity to continue our cooperation with regulators and other agencies,” Alexander concluded.
Crown’s scandals began in the fall of 2016 when 19 employees – including Crown VIP head Jason O’Connor – were detained in China, with 16 later pleading guilty to promoting gambling.
While Crown is being investigated for its own alleged wrongful activities, Melco Resorts founder and CEO Lawrence Ho is the subject of a probe for his family’s potential link to China’s 14K and Sun Yee On triad societies. Ho’s father, Stanley, held a monopoly on casino gaming in Macau for decades until the enclave was returned from Portugal to China.
Ho said recently the investigation will only help his company’s image in the long run.
“We are always happy to go through the regulatory process,” Ho stated in June. “We always prefer jurisdictions where there is a strong governance and a strong regulatory regime, which is why we’ve shied away from some of the other, smaller Asian countries, where their regulatory regime wasn’t as developed.”
Melco’s offer for Packer’s 20 percent came after Wynn Resorts rescinded its $7.1 billion acquisition proposal of Crown after leaked media reports publicized the potential deal. Wynn executives saw it as a ploy on Crown’s part to attract a better offer.
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