It hasn’t been a good few months for Crown Resorts’ casinos after the news that several members of staff appeared in a Chinese court for promoting gambling, resulted in a drop in the price of their shares. To compound that, they now appear to have closed eight of their offices across Asia which could have serious implications for their Australian casinos.
Here we will rundown exactly what has happened to the company owned by James Packer, and whether the planned flagship resort in Sydney will now suffer.
Crown dismantle Asian network
Despite having a presence in various Asian destinations from Macau to Indonesia, it appears the only international outpost listed under the billionaire’s company is Hong Kong. Making such big decisions has left industry experts confused, including Ben Lee, an Asian gaming consultant who said; “It doesn’t make sense. They’ve shut their Southeast Asian offices which were never at risk, and they’ve kept only one office open”.
That is a view shared by many and has left a lot of questions for those interested, particularly because the importance of the Asian market has been displayed over recent years. For instance, the company revealed in October that a quarter of the revenue in the last fiscal year came from international VIP gaming programs, whilst high rollers from China accounted for 12 percent of total revenue.
Clearly, a reduced presence in Asia is likely to see those figures drop over the years.
What does that mean for the Australian casinos?
On the face of it, the decision to reduce their presence in Asia and instead focus on Australia seems a positive one. Yet the importance of attracting high rollers cannot be understated and CEO of Crown Resorts, John Alexander, said that half of their big-spending clients came from Asia. With consumer spending down back home, it drew inevitable questions around the sustainability of their $2bn Sydney resort that hopes to open in 2021.
Although, Crown Resorts responded to that by stating their Sydney resort “will be a gamechanger for Sydney and Australian tourism”. Adding that the city remains a “popular destination for international travellers, including gaming customers. The resort will be one of Crown’s most valuable assets”. Of course, with the resort years away from completion, the economic situation could look a lot different in that time.
Even though the company has removed offices in Asia, they will still be using the Hong Kong office to be the hub of their activities in the region. So, they can still hope to build a large client base of high rollers in time for the opening of the new casino in Sydney.
Whether you are a high roller who will be interested in the VIP treatment or prefer the ease and accessibility of playing with Lucky Nugget Casino, there are so many ways players can enjoy the games today. Ultimately, the new casino will offer another outlet for players to enjoy the games and in time we will see whether Crown Resorts’ decision has had financial implications.