Crown windfall driven by $450m in losses from Victorian pokies players
For the first time Crown Resorts has released profits gained from poker machine revenue, revealing gamblers lost $450m on Crown’s 2,682 poker machines in Melbourne and a further $265m on those in Perth in the 2017-18 financial year.
Anti-gambling advocates have been lobbying Crown to release the data to better understand Crown’s contribution to gambling-related harm. The data was released as part of Crown’s full-year results on Thursday, with the company reporting a full-year profit of $558.9m, down 70% on its 2016/17 result. But its profit in 2016/17 was inflated by proceeds from the sale of its Macau business.
Revenue for the 12 months to 30 June rose 4.5% to $3.49bn, with turnover in its VIP high-roller gambling business growing by 54.5% to $51.5bn.
A professor of public health and gambling researcher, Charles Livingstone, said the pokies profit from Crown Melbourne meant each machine made an average of $170,000 per year, 1.7 times higher than Victoria’s state average.
“What we are looking at is a venue extremely good at extracting money from people,” he said.
Crown’s Melbourne casino license was renewed on Friday despite a review from the Victorian Commission for Gambling and Liquor Regulation (VCGLR) finding the company’s responsible gambling strategies fell behind community expectations. The review highlighted “failures of governance and risk management” and found “Crown will need to be innovative and proactive in effectively implementing harm minimisation strategies over the coming period”.
Livingstone said the profits demonstrated Crown needed to implement VCGLR recommendations such as expansion of facial recognition technology so that self-identified problem gamblers could be turned away, and implementation of player data analytics to identify addicted players.
The director of the Alliance for Gambling Reform, Tim Costello, welcomed the first-time disclosure of poker machine profits by Crown but said the figures showed that worldrecord levels of gambling harm from pokies in Australia were even worse than expected.
“Victorian pokies losses were not really $2.7bn in 2017-18 as the government recently revealed but $3.145bn when you include the Crown losses which comprise 14.3% of all poker machines losses in Victoria,” Costello said.
“And with $10 maximum bets versus $5 everywhere else, 24-hour trading and a highly sophisticated loyalty scheme, is it any wonder that Crown Melbourne’s machines are 65% more lucrative each year than the average across Victoria?”
Crown Perth is the only pokies venue in Western Australia and its 2,429 pokies comprised 47% of total gambling losses for 2017-18, being $265.1m out of a total of $564.6m.
Anna Bardsley, who suffered harm playing pokies at Crown Melbourne, said she was shocked by the scale of the losses.
“I call on Crown Melbourne to proactively manage down their pokies revenue to below $400m next year by implementing the VCGLR reforms such as using data from the loyalty program to intervene when a gambler is suffering high levels of losses over a sustained period,” she said.
Crown executive chairman, John Alexander, said the boost in VIP play at Crown’s casinos in Melbourne and Perth was a “pleasing result”.
Last year the company reported a 49% drop in VIP turnover after many Chinese high-rollers put off overseas gambling jaunts amid a Chinese government crackdown on gambling. The crackdown also led to the detention in late 2016 of Crown employees in China over alleged gambling offences and the company’s subsequent sale of its Macau casino business. Crown has declared a final dividend of 30c per share, franked at 18c. The company also announced a new share buyback for $400m of shares to replace its current ongoing share buyback that ends on 22 August. At 11:25am AEST, Crown shares were up 48.5c, or 3.6%, to $13.80.
Australian Associated Press contributed to this report