Crown Resorts' ability to generate funds for its $2 billion casino in Sydney has been called into question by credit ratings agency Moody's who says the spin-off of its international resorts will crunch sources of cash for Australian developments.

Moody's, which placed Crown on review for downgrade last week, said the proposed demerger and bump in the casino operator's dividend payout ratio to 100 per cent would lead to a material reduction in its cash flow.