Australian casinos are reported to have significantly increased their VIP volumes during the first quarter of the 2017-2018 financial year.
This revenue bump in both Crown Resorts and rival operator Star Entertainment Group has been attributed to the recent release of Crown employees from a Chinese prison. Monique Rooney, Analyst at Morgan Stanley, explained in a client note published by The Australian that finances, prompted by VIP operations, has significantly improved since the release of Crown’s Head of International High Roller Operations Jason O’Connor.
Last year, 19 Crown staff members were detained in mainland China for illegally promoting gambling. Although some employees were released on bail shortly, it was not until this summer when the last six detained Crown members, including O’Connor, were freed from a Shanghai prison.
Following this negative publicity, Crown’s profitability was extensively affected due to its reliability on Chinese customers. Consequently, Australia’s VIP national share market dropped from 6% -prior to detentions- to 3% as in June 2017. Rooney believes that the national VIP segment has hit rock bottom this year and praised high-rollers comeback. She also noted that there is room for further improvement, expecting Crown’s VIP operations to increase up to 9% in 2018.
“Specifically, junket operators spoke to a material improvement across both Crown’s Melbourne and The Star’s Sydney properties in recent months versus the VIP volume lows seen in 2017.
“With the market focusing on the weak domestic environment and not factoring much in the way of a recovery for VIP in 2018, we believe any rebound in growth would be taken positively,” Rooney said.
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