Australian gambling giant Crown Resorts revealed that it would depend on its domestic gambling to strengthen its profit at a time when its casino business has been affected by the international travel ban because of the coronavirus pandemic outbreak. It was exactly the Covid-19 lockdown and the subsequent travel ban that hurt the annual earnings of the gambling company.
The gambling company, one-third in which is currently owned by Australian billionaire James Packer, used to rely on affluent Chinese tourists visiting its Melbourne and Perth-based casinos. The gambling giant is also preparing to open a new AU$2.2-billion casino resort in Sydney by the end of 2020, which has also been expected to attract foreign gamblers.
However, closed borders due to the international travel ban that was aimed at preventing the further spread of the coronavirus infection seriously affected the casino company’s profits. Crown Resorts revealed that its annual net profit for the year that ended on June 30th, 2020, fell from AU$401.8 million last year to AU$79.5 million. The overall revenue generated by Crown Resorts in the twelve-month period to June 30th fell by 25.7% from the one in 2019 to AU$2.21 billion. In addition, the casino company announced a smaller final dividend payout than last year.
The significant slump in the latest results of the operator has reflected the need for serious changes in the casino company’s strategy. The main casino of Crown Resorts, which is situated in Melbourne, has been partly shut since March 2020 because of the Covid-19 outbreak and the gambling giant had to dismiss most of its workforce there.
International Travel Restrictions Hit Crown’s Australian Casino Business Hard
Ken Barton, the CEO and Managing Director of Crown Resorts, described 2020 as “an extremely challenging year”. He explained that the casino operator started experiencing softer trading conditions from the end of January 2020 as a result of international travel restrictions and general community uncertainty because of the coronavirus outbreak. Mr Barton further reminded that the company was forced to close its gaming activities, as well as a considerable part of its non-gaming services at both Crown Melbourne and Crown Perth casinos for an extended period, with the closure having a strong negative impact on the financial results of the operator.
Apart from that, the closures had a substantial impact on the gambling company’s employees, as approximately 95% of Crown Resorts’ workforce stood down following the closures.
CEO Barton also referred to the annual Chinese holiday season that takes place in mid-February and explained that, unfortunately, international travel would not benefit much from the Chinese New Year celebrations. He added that before international travel gets back to normal, people are more likely to be able to travel to the state of New South Wales (NSW), where Sydney is situated, and currently, the restrictions of movement there are less strict than the ones in Melbourne.
Crown Resorts unveiled that so far it has collected AU$111.3 million as financial help from the government, with the money being part of the authorities’ emergency scheme aimed at helping companies that had been affected by the lockdown.
- Author
Olivia Cole
