Crown hit as VIP gamblers move on

CROWN Resorts’ full-year profit has fallen 4.7 per cent to $368.6 million, which the casino operator attributed to a reduction in VIP revenue in Australia.

Normalised profit for the 12 months to June 30 dipped following a 5.4 per cent fall in Australian revenue that chairman John Alexander said came against a backdrop of subdued market conditions.

Main floor gaming revenue in Australia inched up 0.5 per cent to $1.6 billion despite a 2.1 per cent drop in Perth but turnover from high-stakes VIP program play slumped 26.1 per cent to $38 billion.

Rival casino operator Star Entertainment Group last week also cited a drop in international VIP spending while reporting an 8.4 per cent fall in full-year profit.

Crown held its final dividend at 30 cents but the amount franked fell to 25 per cent from 60 per cent a year ago, which the firm says reflects its franking balance and uncertainty surrounding the outcome of its legal battle with the Australian Taxation Office over historic tax deductions.

Crown reiterated it was cooperating with the NSW Independent Liquor and Gaming Authority into the sale of a near 20 per cent stake in the company by major shareholder James Packer to Lawrence Ho’s Melco Resorts.

It also said it would co-operate with the Victorian Commission for Gambling and Liquor Regulation as it looks into media allegations of business ties between the Crown Melbourne casino and organisations linked to Chinese criminals. Nonetheless, Mr Alexander railed at “recent media reporting which has unfairly sought to tarnish Crown’s reputation”.

“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,” Mr Alexander said.

“Crown has zero tolerance for criminal elements and we view these inquiries as an opportunity to continue our cooperation with regulators and other agencies.”

The casino is also subject to an Australian Criminal Intelligence Commission investigation and the Federal Government has referred the matter to the Australian Commission for Law Enforcement Integrity.

Including fluctuating win rates and other one-off items, Crown’s statutory profit fell 28.1 per cent on the prior year, which included both higher revenue and the impact of asset sales.