The biggest gambling company in Australia, Crown Resorts Ltd, revealed earlier today that its gambling turnover generated by affluent Chinese customers dragged its half-year profit to a decline. The company also noted that travel limitations that have been imposed as part of the prevention measures for the coronavirus are expected to also affect its business in a negative way.
Today, the casino company unveiled its financial results for the six months ended on December 31st, 2019. The figures have reflected the effects of the many challenges faced by the company that is trying to reinvent its operations and re-establish its services as a relatively simple domestic business over the past three years following the 2016 arrest of its employees in China that brought serious changes to the operator’s plans for international expansion.
In its half-year results announcement, Crown Resorts revealed that its “normalised” net profit declined by 11% to AU$1372.7 million in the six months that ended on December 31st, 2019. Apart from that, a significant decline of more than one-third was registered in its turnover generated by Chinese high-roller players.
During an analyst call, the company’s Chief Executive Officer Ken Barton explained that the gambling operator was affected by continuous “soft market conditions”, as well as by the negative publicity that it has recently faced.
Crown Resorts Is Facing Regulatory Probes into Its Australian Casino Operations
Late in 2019, Crown Resorts faced media reports alleging it of violation of local gambling legislation, money-laundering and links with Chinese junket operators associated with criminal organisations.
The reports have been taken very seriously by Crown, with the company utterly rejecting the allegations at the time. The media reports, however, fuelled a number of regulatory investigations on the territory of Australia. Since the beginning of the probes, the gambling company appointed a new Chief Executive Officer, as well as a new Chairman.
Today, the gambling company revealed that it was now facing another challenge, as its business has been seriously hit by the recent travel restrictions aimed at slowing the rapid spread of the dangerous coronavirus. Apart from that, Crown Resorts also noted that what it called “community uncertainty” was keeping gamblers away from its venues in the country, as people preferred to be cautious about going into crowded places for the time being.
The spread of the deadly coronavirus is not the only reason for the most recent difficulties faced by the gambling operator. Earlier in February, Hong Kong-based group Melco Resorts & Entertainment revealed its decision not to proceed with the planned acquisition of the 9.99% stake in the Australian gambling operator from James Packer citing temporary Macau casino closures and willingness to concentrate its efforts on bolstering its domestic market business.
The credit-ratings firm Moody’s shared in a client note that the first-half 2020 results of Crown Resorts highlight a weak operating performance.