During the Annual General Meeting last Thursday, Crown Resorts chairman James Packer stated that high rolling punters are “killing” the profits of his gambling facilities in Melbourne and Perth. He reported a low increase in revenue for the first 15 weeks of this year’s second quarter. “Our VIP businesses are almost $100 million below the theoretical result less than four months into the financial year, due to an adverse win rate, or put simply, bad luck.”
The Chief Executive Officer of Crown, Rowen Craigie, reported a decrease in revenue at Melco Crown Entertainment, due to the current downhill spiral that Macau’s gambling industry is seeing. Macau has recently made changes to its smoking legislation. He supported the recent “government crackdown on corruption in China”, which he is sure will improve the gambling sector a great deal on the long run.
These and other recent events around Crown Resorts have made Packer give unusually stroppy comments in the course of the last few weeks. According to him, the current state of his company on Australia’s gambling market is of an enterprise, “handicapped by extra taxes and charges”, and not of a company which makes “enormously positive contribution to countless Australian workers and small businesses.” Packer reminded the public that Crown is one of the largest tax payers in the country and provides 2/3 of its profits, approximately AU$590 million, to national and local authorities.
Another reason for the recent behavior and comments of Packer is the complaints of the overly-generous contract clauses, which the Victorian Government has given to Crown for its gambling license extension. The Upper House of Parliament gave the green light to the deal last Tuesday. Greg Barber of Green MP protested against the conditions of the deal, especially against the one that obliges the government to pay almost $200 million to Crown in case it implements any legislation, which might affect Crown Melbourne’s operations in a negative way.
Furthermore, James Packer mentioned to shareholders of his company that he is tired of the constant requests from the government to invest in local markets, but it then changes “rules with total disregard to the impact those changes may have on our investment and our staff.” He further commented that Crown is “not a tobacco company” and those who criticize it are “blinded by their prejudices that prevent them from having an open mind or judging us on our merits.”
At the end of the AGM, Packer refused to answer more questions on how unjust the government is with its actions to the gambling industry. He said he was pleased with everything and has left the building.
In an interview for the Australian, CEO Rowen Craigie tried to clarify that what Packer was trying to stress on, was that it is of extreme importance that the regulations must be stable and with synergy with any business, which invests billions in projects and facilities.
