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Tuesday, 24 February 2015 00:47 - - {{hitsCtrl.values.hits}}
Australia casinos hit a record in the half.
Even as the Macau hit ate into its profit, Crown shares jumped 10%, joining Echo in rising on proof they are succeeding as casinos around the world look to lure customers from the biggest global gambling centre. Macau is expected to see an industry revenue slump of about 40% this month.
The boost comes as Crown, half-owned by Australian billionaire James Packer, and Echo step up their domestic rivalry. Crown is building a A$2 billion ($1.56 billion) casino a short walk from Echo’s newly refurbished Sydney waterfront complex, while the pair are also vying for government approval to build a casino in Brisbane - an Asian tourism hotspot.
“There’s no doubt been some diversion from Macau,” Crown Chief Executive Officer Rowen Craigie told an analyst briefing on Thursday. “You don’t want to over-emphasise that but clearly those more distant destinations have benefited.”
Crown’s shares hit a five-month high on Thursday, even as it reported half-yearly profit nearly halved largely on falling Macau takings. While Crown’s profit from its one-third stake in Macau-focused Melco Crown Entertainment slumped by 42%, revenue from VIPs gambling at its Melbourne casino leapt 86%.
Two weeks earlier, Echo said turnover from VIP gamblers at its Australia casinos nearly doubled to an all-time high of A$23 billion as net profit for the period surged 78% to A$112.6 million. Its shares have risen up to 9% on the news.
JUNKETS GALORE
The newly created diaspora of high rollers has given the Australian casino operators a fresh motivation to win over junket operators, now looking for new destinations to send their clientele with no particular attachment to a country.
“VIP (clientele) is volatile,” said Paul Kasian, head of asset management at EQT Trustees, which holds 0.24 million shares of Crown. “You’re probably going to see VIP spread out of Macau...various destinations will benefit.”
Crown said it will work to build relationships with Macau-based junket operators whose business largely involves sourcing high-net-worth individuals from the mainland and arranging all-in-one holiday packages involving gambling.
It is up to junket providers to mine potential customer bases by finding those with business or family connections to Australia and luring them with financial incentives and giveaways, said Crown’s Craigie.
“There’s always the search for attracting new junket operators and inviting existing junket operators to step up their level of business,” he said.
“Increasingly they’re putting business into other destinations (outside Macau). They’ve got choices just as the premium players have.
