Crown wind­fall driven by $450m in losses from Vic­to­rian pok­ies play­ers

The Guardian Australia - - News - Melissa Davey and agen­cies

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

Pho­to­graph: Ju­lian Smith/AAP

Each poker ma­chine at Crown Mel­bourne made an av­er­age of $170,000 per year, 1.7 times higher than Vic­to­ria’s state av­er­age.

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