G'day everyone. It's yet another episode of the Australian casino wars, with a dash of the Australians VS the Singaporeans, with a dash of Aussie political wars to boot. Media Man and Gambling911 with your special report from the war zone...
James Packer's Burswood Casino is continuing to feel a bit of pressure from from a couple of resorts in Singapore, as its high roller takings drops about 14%, but it would be worse, and most experts expect Crown Limited casinos in Australia to close the gap within 6 months.
Crown, owner of Burswood Entertainment Complex, Melbourne’s Crown Casino and a range of entities in the Asia Pacific just released its first-half financial report.
We learned of a 32.9% lift in first half net profit to $153.14 million on a "solid" performance from its Australian non-VIP businesses and non-gaming operations.
Normalised net profit, which takes into account variations via "theoretical win rate" against VIP gamblers and pre-opening costs in respect of the jointly owned City of Dreams casino-resort in Macau, thanks to the Ho family connection, was 13.9% higher at $165.8 million.
VIP revenue dropped 8% to $290.8 million, a result of the opening of 2, yes 2, new casino "integrated resorts" in downtown Singapore.
At Burswood, VIP revenue dropped 14.3% to $78.3 million on turnover of $5.8 billion.
Normalised earnings before interest, tax, depreciation and amortisation was $107.3 million, down 4.4%, while normalised revenue was pretty steady at $376.8 million.
Crown chief exec Rowen Craigie told the press that the VIP market was growing strongly, evidenced by the uplift of the VIP market in Macau.
"The Singapore casinos are going gang-busters - they're probably the two most profitable casinos in the world at the moment," Craigie said.
"So, the market is there. The challenge for us is to replace the business we've lost to Singapore with new business out of China but also new business out of South East Asia.
"What Macau has proved and what Singapore will also prove is that additions to the supply of quality-integrated resorts triggers the demand."
Craigie said facility upgrades in progress at Crown and Burswood would help boost Crown's share of VIP numbers.
The casinos owned and operated by Crown Limited also had to focus on providing quality service, and Crown had to ensure that it had the right sales force in key markets to persuade well to do gamblers (whales and good size dolphins) to come down under to Australia.
Craigie advised many VIP gamblers from South East Asia were now choosing to play their games of choice locally, and some of Crown's key VIP customers were back and forward between Australia, Macau, Las Vegas, and Singapore.
The boss said an upgrade of facilities by Australian rival casino operator Tabcorp would also make a visit to Australia by VIP gamblers a more attractive proposition.
"We know they property hop," Craigie said.
Crown also announced today that it had received regulatory approval in Nevada and Pennsylvania in the U.S to convert a "preferred instrument" held in Cannery Casino Resorts into equity. Upon conversion, Crown will hold a 24.5% share in Cannery. Craigie said that once the conversion took place, Crown would be entitled to share in any profit distribution and a seat on Cannery's management committee. This marks a return to American gaming and casino action for Crown, which successfully got out of a few deals over the past few years, preferring to cut their losses and run. One such well documented deal was March 2009 - Crown abandoned a $US1.8 billion deal to acquire Cannery. Crown chief financial officer Ken Barton said the Cannery investment was valued in Crown's books at $US60 million ($A59.54 million).
Craigie said Crown "still needs to see what happens" with the Cannery investment. "In terms of future plans for Cannery, we're only a 25% shareholder. That's a wait-and-see," Craigie said.
Crown said trading in the new calendar year had so far been good, however the first 7 weeks of 2011 was not comparable to the same period in 2010 due to the difference in the timing of Chinese New Year. Chinese people are very suspicious, and the calender effects their gambling habits. Craigie said Crown Melbourne was benefiting from capital refurbishments.
However, Burswood had been affected by complex-wide renovations during the half year. Crown's revenue for the 6 months to December 31, 2010 grew 0.8% to $1.2 billion. Crown declared an interim dividend of 18cc per share, with 10.8 cents franked, steady on the dividend in the prior corresponding period. Shares in Crown were down 18 cents at $8.20.
Numerous media and gaming insiders have told Media Man that both Crown's Burswood Casino in Perth and Crown Casino in Melbourne are fully expected to close the gap on Singapore casino resorts in the coming months, as Crown and competitor, Tabcorp (Star City in 'Sin City' Sydney) continue to lobby the Australian government for enhanced facilities at major Australian airports to ensure high rollers VIP's are looked after like gold, easing restrictions on paperwork ala immigration and other entry requirements. Ah, let the Australian casino wars and Aussie political fun and games wars continue. Incoming!
Online Casinos, Online Poker and Sports Betting...
Ok readers, we hear you... you also want to know some of the best places to play online (that accept Aussies) if your in or around the Asia Pacific - Australia (including Tassie) and New Zealand, so here it is...
PartyCasino.com
Captain Cooks Casino
Betfair (sports betting only)
PKR.com (poker, slots including Marvel slot games and sports betting)
PartyPoker.com (online poker at one of the world's most respected poker rooms and gaming brands)
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World Casino Directory
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*Greg Tingle is a special contributor for Gambling911
*Media Man http://www.mediamanint.com is primarily a media, publicity and internet portal development company. Gaming is just one of a dozen sectors covered
*the writer owns shares in Crown Limited
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