A large number of affluent players from all over the world are returning to Australia and its casinos, and what is more, industry experts have projected that the trend of such a growth is to continue.
After a number of Crown Resorts employees were taken into custody in October 2016 for illegally promoting gambling in mainland China, Australian VIP casino programs faced a lot of difficulties.
These setbacks have cast a shadow over Crown Resorts’ revenue generated from the Australian casino behemoth’s VIP program, reducing it by approximately 50%. As revealed by the company itself, its VIP program-generated revenue in 2017 amounted to approximately AU$605 million, in comparison to more than $1 billion generated over the 2016 fiscal year.
Last Months’ Improvement
Still, the last few months were more successful for both Crown Resorts and its competitor company The Star Group, since both operators reported better-than-expected trading results reached in their VIP programs. The improved trading results of the two companies made some Morgan Stanley investment bank’s analysts travel to Macau to have meetings with some casino operators.
The above-mentioned analysts released a client note last Friday, revealing that they had found the Chinese VIP market in “good shape”. According to the information included in the client note, Morgan Stanley’s experts have found that the growth continued, with it stretching even after the trading update was published. The investment banks’ analysts also revealed projected that the VIP program revenue was expected to increase even further.
They further revealed that one of the leading junket providers reached its highest rolling chip so far in Melbourne in October, while a Sydney-based company’s VIP program in China also posted a substantial growth in comparison to its last year’s performance. As far as Crown Resort is concerned, the James Packer-owned brand has only recently begun the construction of a luxurious casino and hotel located at Barangaroo.
High-Roller Gambling Volumes of Crown Making a Recovery
Despite the fact that there were concerns about the decline registered in the brand’s VIP gambling revenue, the Crown Resorts brand’s owner Mr. Packer used the annual meeting of the company in October to reveal that he was more and more confident that the prospects of the project were improving. He also confirmed that the VIP gambling volumes of the brand had been making a recovery.
As Crown Resorts revealed, its VIP revenue had surpassed the initial projections, regardless of the fact that the total VIP turnover declined by 17% since July 1st in comparison to the same quarter a year ago.
According to the analysts of Morgan Stanley, VIP players in China would probably find the Barangaroo casino of the Crown Resorts brand pretty attractive. According to their research, VIP customers in China were more likely to prefer newer casinos, so it was very likely for them to prefer Crown Sydney offering, unless its rivals from Star Entertainment Group do not offer high-rollers a better service.
- Author
Olivia Cole
