Australian VIP casino program revenue dropped nearly 50 percent, from more than $1 billion in 2016 to $605 million in 2017, after Crown Resorts staff members were arrested and jailed for illegally promoting gambling in mainland China. But now, Morgan Stanley analysts who traveled to Macau said the Chinese VIP market was in “good shape,” due to better than expected trading results for Crown and rival casino group Star Entertainment Group.
In a client note, the analysts said, “Our recent travels to Macau and feedback from industry contacts confirms that this growth has continued post the trading update and is expected to continue to grow further. A very large junket provider recorded their highest rolling chip ever for Melbourne in the month of October, while business in Sydney for Chinese VIPs is also reported to be growing substantially on last year.”
At Crown Resorts, overall VIP turnover dropped 17 percent since July 1 compared with the same quarter last year. Crown Resorts owner, billionaire James Packer, said at the company’s annual meeting last month he had growing confidence in the high-end casino and luxury hotel he’s building at Sydney’s Balangao as VIP gambling continues to increase.
The Morgan Stanley analysts said Crown’s Barangaroo casino would attract Chinese VIP gamblers. “We asked junkets where VIP customers would likely go. The view is that VIP customers prefer newer casinos and therefore preference would likely be for Crown Sydney unless Star Entertainment Group Sydney can provide a better service,” analysts said.
Packer also noted
