Crown Resorts full-year net profit drops 70%
It is safe to say that Crown Resorts has had better years in the past. With all the gossip surrounding its owner, James Packer, and the legal troubles the casino group has had in both Australia and Macau, the resort company hopes that 2019 will be a much brighter year.
Crown Resorts is one of the largest gaming, entertainment, and resort companies in the world, with a 2015 revenue of nearly $5 billion. This figure represented astronomical growth by the Packer family, which began to get away from its media holdings when it founded Crown Resorts in 2007. Currently, Crown Resorts owns four casinos in Australia and the United Kingdom, as well as sportsbooks in Australia. At one time, the company owned properties in the United States, Sri Lanka, and the Chinese autonomous region of Macau. However, experts have noted Crown may have overextended itself through rapid growth, and the company has since shrunk.
Crown’s Profits and Losses
Crown Resorts reported its net profits have dropped 70 percent in FY 2018, which means the casino giant only made a $559 million profit last year. However, the company did report a rise in normalized profits of 12.7 percent, or $385 million. This represents the win rates that gamblers made.
The company also reported its operating revenue increased to $3.4 billion. One of the bright spots within the casino was its VIP high-roller program, which reported revenue of nearly $52 billion, an increase of 54 percent over the previous year. Gaming revenues on table games in the company’s casinos rose slightly to $1.68 billion, or 1.5 percent.
Crown’s executives stated they continue to be pleased with the results of the company’s flagship casino at Melbourne. This facility is one of the largest casinos in the world. It has more than 1,600 rooms and 500,000 square feet of gaming space, includes 3,500 slot machines and a huge high-roller poker room. Crown Melbourne’s overall revenue was up over 74 percent.
The only spot within Australia’s revenue projection that was not as rosy was the continued flat revenue at the casino in Perth.
Issues with the Company
Crown Resorts has had a tumultuous run as of late. The company faced problems with China as it cracked down on corruption and money laundering in Macau. The Chinese government has said Crown Resort casino employees were involved in a bribery and money laundering enterprise in an effort to make sure Chinese government employees brought contractors, salespeople, and other businesspeople to the casino. In the government crackdown, 19 Crown employees were arrested and jailed. The company had to pay a fine to get the employees released, and after their release, the casino group decided to sell its interests in Macau.
In addition to the scandal in Macau, the company also faced a $300,000 fine levied by the state government of Victoria because, during an inspection, the Melbourne casino was found to have video poker machines that had been tampered with. Although the casino stated the reason it changed the machines was to try some new configurations, it was still fined.
Finally, the casino group has faced press it didn’t need with the tabloid lifestyle of its owner, James Packer. First, there was the news of Packer’s engagement to U.S. pop diva Mariah Carey and a $10 million diamond ring. The engagement was broken off and Packer seemed to be headed into a downward spiral. He eventually checked himself into a mental health facility. Packer also subsequently resigned from the board of the company. After his resignation, the company appears to be stabilizing.
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