Melbourne Crown Casino High Rollers Return, VIP Revenue Surging, Year-on-Year Overall Still Lagging

Posted on: February 24, 2018, 02:00h. 

Last updated on: February 23, 2018, 08:10h.

Casino.org Staff Writer Read More
Expertise: Commercial Gaming.

It’s a welcome sight for officials at the Melbourne Crown Casino: their biggest bettors, many of whom hadn’t been seen in months, are finally filtering back through the doors of Australia’s flagship casino.

Melbourne Crown Casino high rollers returning
Back in the high life again: whales are pulling up to the Crown Casino in Melbourne, Australia once more, and their presence has pushed VIP revenues back up. (Image: Crown Resorts)

 

Revenues from Crown Resorts’ VIP program in Melbourne surged to $262 million AUD ($205 million USD) in the last six months of 2017, an increase of 37.5 percent year-on-year. Total VIP turnover across both of Crown’s properties in Melbourne and Perth also increased by 16 percent, to $22.6 billion AUD ($17.6 billion USD).

The uptick comes in the wake of a severe drop in high roller gaming across the Australian gaming scene, the direct result of a number of Crown employees having been charged with promoting gambling illegally and jailed on the Chinese mainland in late 2016.

Making Up for Lost Time

A total of 19 Crown employees, including several Australians, were detained in China following a series of police raids. They were charged with, and eventually pleaded guilty to, the illegal promotion of gambling, a practice strictly forbidden on the Chinese mainland. The trial was a brief one, and most were handed nine to ten month jail sentences. The Crown Resort also paid for the $1.67 million in fines levied by the court.

However, the final financial fallout was much more significant for the Melbourne casino. The scare spooked many of their prized whales, and previously lucrative VIP revenues were crippled, leaving what had been a billion dollar business for the casino in 2016 cut in half in 2017.

With their high roller clientele now back in the VIP rooms, Crown Resorts Executive Chairman John Alexander told the Sydney Morning Herald that the “… VIP program player turnover in Australia of $22.6 billion was a pleasing outcome, particularly at Crown Melbourne … given the difficult trading conditions in the prior comparable period.”

The bounce back should put the VIP jewel back in the Crown, according to industry analysts whose optimistic outlook has 2018 Melbourne high-roller revenues eventually returning to pre-2017 levels.

Perth Hurting Profits

That increase wasn’t enough to put Crown Resorts in the black, as the company’s net profits dipped by 33.6 percent over the last six months of 2017 compared to the same period in 2016.

The bottom line is being dragged down, in part, by the Perth property not pulling its weight. Management admits that the Western Australia casino, which opened a 500-room luxury hotel in December 2016,  is feeling the pinch and may have recently “bottomed out”.

The remoteness of the facility is the biggest culprit, claims Alexander, who is calling on the state government to do more to promote tourism in the region.

Crown Resorts is assuring shareholders they’re now all in on Australia exclusively. Having shelved expansion plans in both Macau and Las Vegas, as well as ridding itself of the online betting site CrownBet, Alexander insists that management will focus its attention on matters in Melbourne and Perth, as well as the Crown Sydney, which is expected to open in 2021 and will compete with the Star Casino, already a fixture there.