Matt Bekier, Chief Executive Officer of Australian gambling operator Echo Entertainment, admitted during the company’s annual general meeting that it has certain difficulties to overcome. The executive, however, noted that he would not panic about the significant drop in revenue from Asian high rollers that the operator posted for the four months ended October 31.
Revenue for the first four months of the 2016 fiscal year increased 8.7% from the same period a year ago. However, the company announced that its revenue from VIP high roller customers decreased 33.8% year-on-year. The slump was attributed to the particularly low win rate for Echo Entertainment’s gambling venues.
During the four months ended October 31, actual win rate stood at 1%. In other words, the house collected 1% of the money bet by VIP gambling customers. Excluding the high rollers volatility, VIP revenue dropped 8.1% for the period in review.
During the annual general meeting, the company noted that its VIP segment grew significantly in the fiscal year 2014-2015 due to the upgrade of Sydney’s The Star. The gambling operator spent a total of A$870 million on renovating and redesigning its flagship gambling venue.
Echo Entertainment also revealed that its VIP business will have a new head – John Chong, who previously took the position of head of gambling operator Melco Crown, subsidiary of Crown Resorts. Unlike his predecessor, who was based in Sydney, Mr. Chong will be based in Macau. Chinese high rollers are among the most frequent VIP visitors of The Star. With Mr. Chong being in Macau, Echo Entertainment will be able to boost its VIP business even more.
Commenting on the company’s profits, Mr. Bekier said that it could have posted a double-digit growth if it had offered the same as other casinos in the Asia-Pacific region, particularly the ones in the Philippines. The executive noted that Echo Entertainment will now be focused on profitability.
Mr. Bekier also pointed out that additional investment is needed in order for the gambling operator to be able to boost its VIP segment. He said that the multi-million-dollar investment in The Star’s renovation proved to be a successful move as it brought more VIP gambling customers to the venue.
Echo Entertainment is planning to invest in its other two casinos – Jupiters Casino on the Gold Coast and Treasury Casino in Brisbane. The company is currently refurbishing its Gold Coast property and will integrate its Brisbane casino into the A$2-billion plus resort it is to build as part of the Queen’s Wharf precinct.
During the annual general meeting, Echo Entertainment shareholders also voted in favor of the proposed rebranding of the company. The gambling operator will be rebranded to The Star Entertainment Group and all its casinos are to carry The Star name in future.
