Crown Resorts Woes Deepen as VIP Business Continues to Shrink

(Bloomberg) -- Crown Resorts Ltd.’s high-roller gambling business continued to shrink, cementing the company’s woes amid allegations that criminal gangs laundered money at its casinos.

• Turnover from the VIP program tumbled 26% to A$38.0 billion ($26 billion) in the year ended June, Melbourne-based Crown said Wednesday. The stock rose 0.1% in Sydney as earnings broadly matched estimates.

Key Insights

• Weakness in Crown’s VIP business was enough to drag down total group revenue, indicating the company’s reliance on big-gambling overseas visitors in a sluggish Australian market
• The regulatory investigations into the media reports -- that Crown used junket operators linked to drug traffickers to attract wealthy Chinese gamblers -- risk compounding the current weakness in Crown’s VIP business
• That also bodes badly for Crown’s planned luxury casino in Sydney, which is due to be completed in 2021 and will rely in large part on VIP gamblers

Read More

• Crown reiterated Wednesday the media reports “unfairly sought to tarnish Crown’s reputation”
• To see what the market expected from Crown, click here
• Melco Deal With Crown Probed After Money-Laundering Reports (2)

To contact the reporter on this story: Angus Whitley in Sydney at awhitley1@bloomberg.net

To contact the editor responsible for this story: Edward Johnson at ejohnson28@bloomberg.net

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