Foreign High Rollers Flock Back to Packer’s Crown

Foreign High Rollers Flock Back to Packer’s Crown

While the Crown Resorts brand has seen its share of scandal in the last two years, the company seems to have hit a bright spot with its targeted marketing campaign that has been trying to reel in a high-roller clientele. The campaign, which targets high rollers outside Australia with luxurious benefits, saw its VIP revenue jump nearly 75 percent. This has been the bright spot in a not-so-bright year for the company.

The Trouble with Crown

Crown Resorts has been in the news quite a bit in the last two years. First, the company had issues with its casino in Macau because the Chinese government said Crown Resort employees had engaged in bribery and money laundering within the casino to guarantee that Chinese government employees brought contractors, salespeople, and other business people to the casino. The Chinese authorities arrested 19 employees of Crown Casino Macau, and the company had to pay a fine to release them. Although the casino fired or reassigned the employees, the group decided to get out of the casino business in Macau, citing the uncertainty of the market and the interference of the government.

Crown Resorts was also in trouble with one of its Australian casinos and had to pay a $300,000 fine in the state of Victoria for tampering with its video poker machines. On the heels of the fine levied against the casinos in Macau and Melbourne, the chairman of Crown, James Packer, resigned from the board, and was, then, hospitalized for mental health issues. However, since Packer’s departure, the company appears to be on better footing.

Crown’s VIP Strategy

Crown’s VIP StrategyCrown began its new VIP strategy first by working to gain those high rollers who had patronized its Macau casino before it was sold. Economists have noted that VIP gamers have been fleeing Macau in droves because of the continued interference by the government. Because VIP gamers only want to be known to the casinos they frequent and not to the government, they have been looking elsewhere for places to spend their money.

In addition to making contact with its former VIPs, the casino has been marketing luxurious junkets, especially at its Melbourne casino, one of the largest in the world. The junkets, exclusively aimed at its high-rolling clients, are tailored for the specific needs of a group of clients and include free airfare and hotel accommodations, as well as free spa treatments and the most luxurious rooms the casino has to offer. The VIPs also take advantage of members-only tables at the high-end restaurants and exclusive poker and slots rooms. All this is geared toward the VIPs spending as much money as possible.

The VIP Numbers

Crown’s strategy of using third-party businesses to put together junkets for VIPs seems to be working. The numbers for the most recent fiscal year indicate the revenue for Crown’s VIP program has increased more than 55 percent, raking in $51 billion. Seventy-three percent of that revenue was from international VIP gamers at Crown’s Melbourne casino, which saw its revenue rise to nearly $600 million from January to June. The overall revenue of the two casinos in Melbourne and Perth is up almost 11 percent overall, although economists noted the revenue from the Perth casino did not rise nearly as quickly as the one in Melbourne.

Executives, while celebrating the growth of the VIP market, have cautioned that the market may be volatile. Some gamblers may return to the Macau casinos to take advantage of a decrease in government interference in the casinos and attempts by the casinos in Macau to lure gamblers back to the Chinese coast with luxury junkets of their own.

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