Fitch Ratings Agency has forecast an incremental recovery in Crown Resorts’ earning capacity through 2024. Even so, it maintains its Rating Watch Negative (RWN) and “BBB” Long-Term issuer Default Rating on the Aussie casino giant, due to concerns about the findings of royal commissions underway in Melbourne and Perth.
According to Inside Asian Gaming, Fitch forecast a 15 percent increase in revenue for Crown in the 12 months through June 2022, another 50 percent in 2023 and 10 percent in 2024, due to the expected reopening of Crown Melbourne later this year.
But the agency remains cautious about Crown overall due to concerns it may see its gaming licenses suspended in Melbourne and Perth. The company’s license for Crown Sydney was suspended before the casino there opened, pending negotiations with the New South Wales regulator.
“Fitch put Crown on RWN in November 2020 on the increased regulatory risks the company is facing, which could have a significant impact on the business or financial profile,” the agency said.
“The inquiries into its legal, regulatory and licensing compliance, including anti-money laundering, indicate weaknesses in its risk management, internal control structures and board oversight. The RWN captures the escalating regulatory risks, highlighted by the deferment of the opening of Crown Sydney’s casino and it being deemed unsuitable to hold a gaming license in Sydney, as well as the royal commissions into its suitability to hold a license in Victoria and Western Australia.
“Fitch will resolve the RWN once the outcomes of the regulatory actions are known and we have assessed the impact on Crown’s operations and financial profile.” The outcome of the commission in Victoria is due by mid-October.
In related news, gaming venues in Victoria and New South Wales may be able to resume business in late October and early November as part of their “roadmaps to reopening,” according to Asia Gaming Brief.
