Locals lose billions as VIPs remain in China

TO me, the most astonishing number in the results of the battered and badly bruised Crown casino group was that topline revenue figure – $1.537bn.

It was down ‘‘only’’ 31 per cent.

Through Chairman Dan’s lockdowns 3.0 and 4.0 and of course the real daddy of them all – the four months, fully one-third of the entire financial year, of lockdown 2.0 – Crown still managed to claw in an average of more than $4m a day, for every single one of the 365 days in the year.

It just shows you the determination of the average punter to lose their hard – or in some cases, not-so hard – earned. Through thick and thin and Covid lockdown, they kept making their way to Melbourne’s Taj Mahal on Southbank.

Indeed, Crown’s revenue figure was just a smidgeon below the $1.545bn of Star Entertainment, whose casinos rolled through 202021 in the far more benign, essentially lockdown-free climes of Queensland and especially the NSW of Premier “we’ll never lock down” Berejiklian.

Now true, a big chunk of Crown’s revenue, indeed nearly half at $743m, came from its Perth casino, operating under the benign oversight of Premier McGowan.

McGowan might have spent much of the year keeping potentially diseaseridden ‘‘foreigners’’ – whether from across the Nullarbor or down from the north – out of the state.

But Crown Perth was able to wax rich on its exclusive monopoly of pokies – easterners might not realise it, but the only, the only, pokies in WA are in the casino. Now of course both casino groups lost their highrollers. If there was ever any doubt that ‘‘high-roller’’ is another term for ‘‘Chinese billionaire’’, it was well and truly put to rest in the detail of the numbers.

Crown reported its total ‘‘VIP revenue’’ – both Melbourne and Perth – falling from $398m in the largely pre-Covid 2019-20 year to just over $1m.

Star has previously told us its ‘‘VIP revenue’’ had fallen to $13m – $1m on the Gold Coast and $12m in Sydney – so it would appear they still had some local high-rollers, although clearly none named Packer. All casinos in Australia have built an ‘‘operating model’’ around two revenue streams – the mainly Chinese high and not-so-high rollers (it was the not-so-high ones, delivered by the ‘‘junket promoters’’ that mostly got Crown into trouble), and the domestic ‘‘grunt’’ players.

The actual mix differs from casino to casino. Perth is much more the local grunts because of its monopoly; Barangaroo in Sydney was intended to be all high-roller; Melbourne got the optimal mix of both thanks to its original driver Lloyd Williams. Now as the numbers demonstrate the grunt players will come back when they are allowed to; the return of the high-rollers is much more problematic, from both ends.

We are not going to be letting them in for, at best, some months yet, and even then probably in smaller numbers and erratically.

At the same time China might not be so easily letting them out – both literally and figuratively.

On any number of fronts the China emerging from Covid is a very, very different China than went into it at the end of 2019.

What matters to the casinos – and obviously most spectacularly Barangaroo – is the changing relationship between the billionaires and the party and particularly Chairman Xi.

The – very – new leadership team at crown, chairman-select Ziggy Switkowski and CEO-select Steve McCann, have to negotiate all this.

They also have two other even bigger tasks. They have to save all their licences from the royal commissions in Perth and Melbourne and the NSW inquiry.

They also have to – more Switkowski than McCann – oversee the sale of Crown or at least the (James) Packer shareholding.

All round, an interesting year unfolds.