Crown Resorts narrows losses but warns on tourism headwinds and tougher regulatory environment

Casino giant Crown Resorts has reported reduced losses but says it still faces headwinds in a slower than expected recovery in international tourism and a tougher regulatory environment. 

Melbourne-based Crown Resorts has invested more than $200m in its transformation and remediation plans. Picture: Getty Images

Casino giant Crown Resorts has reported narrower losses but says it still faces a slower than expected recovery in international tourism and a tougher regulatory environment. 

Melbourne-based Crown Resorts racked up losses of $164.8m in the year to June 30, compared to $199.4m in the previous period, as it was hit by one-off remediation costs, depressed international tourist numbers and the introduction of mandatory carded play.

The operator of casino properties in Melbourne, Sydney and Perth reported a 0.2 per cent decline in revenue to $2.78bn, according to a filing with ASIC on Friday.

“The result reflects the continued challenging operating conditions and macroeconomic en­viron­ment impacting the hospi­tality and tourism industry,” a Crown spokesman said.

The ASIC filings also show Crown sold its One Queensbridge development site in Melbourne and a private jet as part of a series of asset sales. The development site adjacent to Crown Melbourne was offloaded for $85m in August.

The ambitious project has been pitched as being taller than Melbourne’s famed Eureka Tower, with approval for 388 hotel rooms and 708 apartments.

Unlike its troubled rival Star Entertainment, Crown believes it is now on the road to recovery after regulators ruled the company was suitable to retain its ­casino licences in Melbourne and Sydney. Star remains under the supervision of regulators in NSW and Queensland.

The fate of Crown’s lucrative casino licence had been in the balance after revelations the business had been facilitating money laundering and organised crime. It was given two years to reform the business to prove it remained suitable to continue to hold the licence. Remediation work continues to progress for Crown Perth, with a decision on its WA licence suitability to be made next year.

Former Crown Resorts CEO Ciaran Carruthers. Picture: David Caird

Crown has invested more than $200m in its transformation and remediation plans, including one-off spending on new infrastructure and services to support responsible and safe gambling.

At the same time, it has been hit by lacklustre tourism numbers, with international arrivals at about 80 per cent of pre-Covid levels and domestic discretionary spending subdued. The introduction of mandatory carded play also had affected revenue, with some customers opting to go to pubs or clubs where cash is still ­accepted.

Mandatory carded play links a patron’s identity to electronic gaming machines, a key anti-money-laundering measure.

Crown Resorts announced in April that it would slash up to 1000 jobs after a sharp drop in tourist numbers as well as gaming restrictions hit its key properties in Sydney and Melbourne.

Crown Resorts chief executive Ciaran Carruthers said at the time the challenges at the company “reflected greatly reduced foreign tourism, a sharp decline in local workers in the city centres, and restrictions on gaming play in Sydney and Melbourne”.

Mr Carruthers announced in August that he would leave the business at the end of the year after a two-year stint that saw the casino operator regain favour with regulators and improve its ­financial performance. Veteran gaming executive David Tsai, currently president and chief operating officer, will take over as acting CEO from September 1.

Mr Carruthers has overseen Crown Resorts’ plans to spend hundreds of millions of dollars on new hospitality attractions, including bars and restaurants, and become less “casino-centric”.

Originally published as Crown Resorts narrows losses but warns on tourism headwinds and tougher regulatory environment