Australia-based casino operator Crown Resorts on Wednesday announced the ‘normalized’ revenue generated by its domestic casinos. It is happy to earn good revenues in the first half of the fiscal year from their extremely small group of a clientele of Asian VIP gamblers.
Crown declared that the domestic casinos had created a ‘normalized’ revenue of AU$1.46 billion (US$975.5 million), down by 5.2% of that earned in 2018. Normalized earnings came down by 9.7% to AU$390.4 million, whereas net profit after deduction of tax fell 11% to AU$172.7 million.
‘Normalized’ figures level out the sporadically wild variation in the gambling activity of VIPs. This approach adopted by most Australian gaming companies as it helps them sweep significant setbacks under the carpet. With the use of this method, the statutory results projected by Crown was very impressive.
Asia-Pacific casino operators, in general, have been facing a slowdown because of sector-wide VIP gambling slowdown. However, Crown is in an even tighter situation after the 60 Minutes exposé created a public relations nightmare for it; because of this, there is a potential threat to its Sydney casino license as well.
The overall revenue earned by the casinos run by Crown from VIP gambling slipped to 34.2% to AU$13.1 billion in H1, but its flagship property Crown Melbourne reported a VIP win rate of 2.3%, which is more than twice that of H1 2019 rate of 1.02%. It was due to this that even though the VIP turnover in Melbourne was down by 40%, the win rate of VIP was up by more than one-third at AU$239.6 million.
Crown CEO Ken Barton stated that Crown “recently experienced softer trading conditions” because of coronavirus, “particularly over the Lunar New Year period.” The company, without getting into further details, maintained that they were diligently following the guidelines issued by health authorities.
Barton also avoided giving out too much insight concerning the current controversies in which Crown is presently embroiled in, which includes an investigation by gambling regulator of the New South Wales into the suitability of Melco Resorts and Entertainment to have possession of significant percentage of stake in the company. When questioned regarding this, Barton only mentioned that the company was “cooperating fully in relation to the various regulatory inquiries underway.”