Fallout continues from October arrests
Australian casino operator Crown Resorts Ltd. reported net profits of AUD1.87 billion (US$1.49 million) for the year that ended June 30, up 96.7 percent year-on-year despite a drop in revenue for the period and a tumultuous year overall for the global gaming giant.
According to GGRAsia, the spike in profits was made possible by the AUD1.75 billion Crown took from the sale of its stake in Asian casino developer Melco Resorts and Entertainment Ltd., a transaction that completed in May. If not for the sale, the company’s after-tax profits would have been $343 million, down 15.7 percent year-on-year. Posted revenues were $3.24 million, down 10 percent from 2015-16.
It was an undeniably challenging year for Crown, which is still feeling the fallout from the 2016 arrests of 18 Crown staffers in China. Last October, the team was rounded up on charges of marketing gambling on the mainland, where that activity is illegal. Crown was suitably chastened by the arrests and the detentions of its employees in a Shanghai prison. The company withdrew from its interests in Macau, tabled a Las Vegas development plan, and pledged to focus on its domestic business. It also said it would pay a $1.6 million fine for the transgressions of its team in China.
“Crown’s Australian operations’ full-year result reflected difficult trading conditions,” said Chairman John Alexander in a statement—or understatement. “We will wait until the China situation is resolved and then we are going to sit down and consider our long-term position. Until this is finally resolved we are stepping back from an aggressive position in the VIP market.”
He said the difficulties will not change plans at home, where Crown is building a $2 billion luxury casino and hotel development at Sydney’s Barangaroo. The property is slated to open in early 2022. “We think Sydney will be an outstanding property and a success on many fronts, including VIP,” Alexander said.”
Meanwhile, Crown honcho James Packer has officially rejoined the board of Australia’s biggest casino operator. The billionaire, who remains Crown Resorts’ largest shareholder, stepped down from the board in December 2015.
