High-Stakes Gamblers Help Crown Resorts, Star Jump
(Bloomberg) -- Crown Resorts Ltd. and Star Entertainment Group Ltd. jumped in Sydney trading after Crown reported a surge in turnover by high-stakes gamblers.
Crown, the casino operator backed by billionaire James Packer, reported a 55 percent increase in VIP turnover for the year ended June 30. Crown’s revenue and profit also beat analyst estimates.
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Crown rose as much as 5.6 percent before trading up 5 percent, on course for the biggest jump since February 2017. Star’s shares surged as much as 6.5 percent and traded up 5.8 percent, set for the steepest climb since July 2015.
VIP revenue at Crown has been a key metric ever since a 2017 crackdown in China deterred big-spending visitors to the company’s casinos in Perth and Melbourne. The increase in VIP gambling also boosted shares of Star, which operates Sydney’s only licensed casino.
“It’s a knock-on effect,” Jason Teh, fund manager at Vertium Asset Management in Sydney, said in a phone interview. “The health of VIP numbers is important for Star because it obviously drives a significant proportion of their profit and the market is extrapolating the positive result.”
Crown also announced a A$400 million ($298 million) share buyback to start Aug. 30. Star reports full-year results on Aug. 24.
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