Rich profits in Packer’s punt

GAMING group Crown Resorts has chalked up a massive 66 per cent lift in full-year profit, but warned that punters in Melbourne and Perth have been keeping a close eye on the purse strings.

The James Packercontrolled company said weak consumer sentiment in Melbourne had hit the main gaming floor, while stiff competition for high rollers and local tax issues had impacted VIP gambling.

Crown reported net profit after tax of $655.8 million for the year to June, boosted by growth in the group’s Macau joint venture.

Revenue from main floor gaming at its Melbourne casino rose 2 per cent to $1.02 billion for the year. But VIP gambling fell 4.6 per cent to $501.2 million.

Chief executive Rowen Craigie said “structural and cyclic challenges” in the economies in both states, including the decline of the manufacturing industry, had hit gambling.

Mr Craigie said the socalled “super-tax” on VIP play in Victoria continued to weigh on the amount the casino could plough into incentives to attract high rollers to Melbourne.

“There’s still opportunity for Australia to grow its market share irrespective of the conditions of the VIP market, but to do that we need to be able to incentivise players to fly over to Macau and ignore Las Vegas and come to Australia,” Mr Craigie said.

“That gets back to the quality of the product you are offering and what incentives you can offer players to fly that extra distance.”

Mr Craigie said the higher-end hotels, restaurants and retailers in the Melbourne resort, such as Rockpool and Nobu, had fared better than those aimed at the mid-market.

Total revenue from the group’s Australian main floor gaming rose a modest 1.4 per cent to $1.5 billion, while VIP play was down 1.5 per cent.

The key driver behind Crown’s overall profit boost came from its stake in Macau’s Melco Crown Entertainment. A surge in gaming at the City of Dreams resort saw Crown’s share of profits from the Macau venture double to $291.2 million.

Mr Craigie said decisions were still being made about development plans for a new site on Las Vegas Boulevard in the US, which Crown announced this month it had acquired. through a subsidiary.

Crown declared a dividend of 19¢, payable on October 10.

Billionaire James Packer’s part-interest in Macua’s City of Dreams casino, which had a ‘smashing’ opening (above), has provided a boost to yearly earnings for his Crown Resorts.