Losses Down Under offset by Macau operations
A tax on high roller play at Crown Resorts Melbourne casino means the property cannot compete with other casinos in Australia and Asia, according to the company’s CEO, Rowen Craigie.
“Melbourne will be trying to compete with one hand behind its back relative to the other casinos,” Craigie told reporters late last month. The tax has been part of the operating structure since the casino opened, but has increased year over year, according to a report in the Australian.
The property competes in terms of quality with casinos in Macau and Singapore, Craigie said, “but we have a set of tax arrangements in Melbourne that are unique to Crown Melbourne. And that’s namely the imposition of a super tax on the VIP business.” The variable tax increases the more high rollers play. Other casinos in Australia, Macau and Singapore pay a flat tax, he said.
Crown is talking with the Victoria government in hopes of getting the tax moderated.
“The effect of that at the moment is that Crown Melbourne is paying an effective tax rate on VIP play of about 14 per cent, which compares to the 10 per cent in (New South Wales),” he said. “That higher tax rate inhibits Crown Melbourne’s ability to use marketing and other incentives to attract VIP players.”
Last month Crown reported a 111.6 percent rise in net profit for second half of 214, the Australian reported. It won $382.4 million thanks to VIP play and increased revenues from its operations in Macau. But revenue and earnings at the company’s Melbourne and Perth casinos took a dive. VIP turnover fell 25.6 per cent to $23 billion, and main floor gaming revenue fell 0.6 per cent to $757.7 million. VIP turnover at Crown Melbourne fell 33.1 per cent to $16.2 billion.
