International VIP players have flocked back to Crown Resorts’ Australian casinos, the company said in a Thursday filing to the Australian Securities Exchange. The major casino operator reported a 40% surge in VIP revenue at its casino facilities in Melbourne and Perth in the first half of the financial year ended December 31, 2017.
The growth was driven mainly by its Melbourne-based property, where VIP revenue was up 37.5% year-on-year to A$262 million. The company also recorded VIP turnover of A$22.6 billion at its two domestic casinos during the reported six months, which it described as “a pleasant outcome”.
Crown Resorts experienced dramatic drops in revenue from Asian high rollers after the arrests of 19 staff members in China in October 2016. The company’s employees were detained for allegedly promoting its Australian casinos and organizing gambling trips to Australia. Activities of this type were prohibited by law in China. Most of the Crown Resorts’ detained staff members were sentenced to nine and ten months in prison. The company’s Head of VIP Operations, Jason O’Connor, was also among those arrested. The official was sentenced to ten months in prison, including the period of detention.
Following the arrests, high roller players from China disappeared from Australia’s gambling scene, afraid that their presence at local casinos could draw unwanted attention to their gambling habits.
Crown Resorts had previously used its presence in Macau and its ties with local junket operators to promote its Australian operations, as well. Following the 2016 arrests, multiple sources revealed that the Australian casino giant might have been a bit too aggressive in its approaches and attempts to lure Chinese high rollers to its domestic casinos.
Crown Resorts exited the Macau casino scene in early 2017 to focus on its Australian business. In today’s filing, the company’s management said that the half-year increase in VIP gambling volumes could be partly attributed to its renewed work with major junket operators.
Focus on Domestic Business
Prior to the 2016 arrests, Crown Resorts was looking to expand significantly its international footprint. The company operated integrated resorts in Macau in partnership with Lawrence Ho’s Melco. It was also seeking to build a casino resort on the Las Vegas Strip.
Following the arrests saga, the Australian operator began selling chunks of its holding in Macau to its partner, until it left the casino hub completely. The company’s management said that it was changing its focus to its domestic business. Crown Resorts also sold its portion of land on the Las Vegas Strip to fellow gambling operator Wynn Resorts, thus abandoning a long-time dream to expand to America’s biggest playground.
The company is now focusing on its operations in Melbourne and Perth and the long-delayed Sydney integrated resort. Management said earlier today that expanding and improving their domestic business has remained their “current intention”.
