Star comes out on top
Australia’s VIP market is back. When first-half earnings results come out this month, the numbers may return to the healthy levels reached in the first half of 2016, before the arrests of 19 Crown Resorts in Mainland China sent the market reeling.
In October 2016, the employees were caught up in a sting and held in a Shanghai prison for illegally promoting gambling on the mainland. Now, 12 months after the last Crown worker was released and deported, Inside Asian Gaming reports that VIP gaming revenue throughout Australia is expected to surpass AU$60 billion (US$44.2 billion) for the first six months of 2018. It’s a welcome rebound after the market plummeted to just AU$33 billion last year.
Crown rival Star Entertainment Group is likely to come out the winner, assuming Crown’s long-held position as the country’s dominant VIP player.
“Star has definitely benefited,” JP Morgan analyst Donald Carducci told Inside Asian Gaming. “When you look at where the two companies were in 2016 compared with 2018, they’ve basically flipped. In this half you’ll continue to see VIP growth, so we’ll most likely be back to the historic level of turnover.”
Carducci said Star’s partnership with Hong Kong conglomerates Chow Tai Fook and Far East Consortium will be an added benefit. “Crown has to get back on the horse, but I think Star will continue to see strong VIP numbers, especially with their relationship with Chow Tai Fook and Far East Consortium.
“That loyalty program has about 6 million people and the fact that two of the three wealthiest Chinese families are now equity partners suggests that they are absolutely going to pump their members through Star. I think it’s really, really positive for Star in terms of their outlook for VIP turnover in comparison to Crown who are down on one knee. Whether or not Star maintains the pressure,” he added, “time will tell.”
