AUSTRALIA

VIP seen firm in face of trade war

Australia’s casino operators are monitoring the trade wars between the U.S. and China on concern a sharp slowdown in the mainland economy could lead to another slump in their overseas VIP revenue.

The sector has just rebounded from a sharp downturn caused by Beijing’s crackdown on corruption, which was further exacerbated by the arrest of Crown Resorts employees in China in October 2016 on gambling offences.

The trade war and resulting slowdown in China’s economy has already taken a toll on the stocks of Macau operators, where VIP revenue has also declined in recent months. However, analysts say so far Australia is holding up well.

“Our recent industry feedback has allayed some of these concerns, with Chinese hotel/ leisure companies reporting minimal impact on current trends and ample junket liquidity after recent consolidation. Further feedback suggests that overseas VIP market growth remains very strong relative to Macau – particularly in the Philippines and Cambodia,” according to a recent report by Morgan Stanley analyst Monique Rooney.

Crown announced a net profit of $326.7 million before significant items for the 2017/2018 year, which was up 5.8 percent from the previous year. The result was boosted by VIP program play turnover in Melbourne, which was up 73.9 percent.

Crown also says it has seen strong interest from international and local buyers for its residences at its new Barangaroo resort in Sydney, which will be a VIP-only property aimed mainly at Asia’s high rollers.

The resort is on the foreshore of Sydney Harbour and will be the city’s first six-star hotel. It will feature 349 hotel rooms and suites, luxury residences, signature restaurants, bars, luxury retail outlets, pool and spa facilities, conference rooms and VIP gaming facilities.

The Crown Sydney Hotel Resort podium is rising on the Barangaroo foreshore and the tower core structure has been constructed to Level 12.

The company says completion is scheduled in the first half of calendar year 2021 and the total gross project cost is expected to be approximately $2.2 billion, with a net project cost of approximately $1.4 billion.

“We believe that Crown Sydney will become an international tourism icon and will help Sydney attract high net worth travellers from all parts of the world,” Executive Chairman John Alexander said in the company’s annual report.

Star Entertainment, which is teaming with Asian partners to build an IR at the Queen’s Wharf site in Brisbane, also posted strong results for the year.

The group reported record normalised gross revenue up 15.3 percent, with growth in both Sydney and Queensland, and record normalised EBITDA up 14.2 percent. Normalised International VIP rebate revenue increased 51.8 percent.

Star said the VIP volumes during the early months of the 2019 fiscal year had been “pleasing,” while it had also seen an improvement in domestic revenue trends.

The company, which is also carrying out a major revamp of its Gold Coast property, is counting on increased tourism to Queensland to drive growth.

According to recently released figures from the Queensland government, overall spending on gambling in Australia declined 0.5 percent in the 2016/2017 year, with casino table games among the worst performing. The data, which is published with a year’s lag, covers the period that was affected by the Crown detentions.

The data illustrates that the domestic market alone is not enough to fuel growth at the country’s casino properties. They carried on spending on pokies in pubs and clubs, with a gain of 0.5 percent, but by far the highest growth sector of the market was sports betting, which grew 15.3 percent in the period.

Ainsworth CEO Gladstone steps aside

Ainsworth Game Technology says Danny Gladstone has chosen to give up his role as CEO, but will remain with the company in another capacity.

Gladstone will finish as CEO on June 30th next year and Ainsworth is searching for a new executive, the supplier said. Following an appointment of a new CEO, Mr Gladstone will continue with AGT in a different role to utilise his extensive industry experience and expertise, it said. “While there will be a more appropriate time to formally thank Danny, I would like to state that he has been an excellent CEO for AGT,” said Chairman Graeme Campbell.

“ He has successfully driven significant international expansion and growth in recurring revenues. Ainsworth is much stronger for Danny’s contribution. We are delighted he will continue to assist us in the future.”

Queensland racing seeks tax money

Queensland’s thoroughbred racing industry is demanding a share of the state’s new point of consumption tax to increase their prize pools.

The tax requires betting houses to pay 15 percent tax on all bets placed in Queensland, no matter where the company is headquartered. Australian Trainers Association state executive Cameron Partington said the industry wants an immediate cash injection into its prize pools – matching what is on offer in other states. At the moment, the thoroughbred racing industry in Queensland does not give any prize to 5th place, making racing in other states more favorable for trainers.

The solution, said Partington, is to increase the amount of money in the prize pool overall so that enough can be spread around.