Coronavirus: Casino operators struggle as new rules hit home

James Packer’s Crown is closing gaming floors and Tasmanian rival Federal is standing down workers as new rules hit casinos.

Crown Melbourne alone is Victoria’s largest private-sector, single-site employer Picture: AAP

The Crown Resorts, Star Entertainment and SkyCity Entertainment casino groups remain in complex negotiations with staff and unions following the unprecedented federal government shutdown of their operations in the wake of the coronavirus pandemic.

The James Packer-backed Crown revealed on Monday it would close its gaming floors and food, beverage and conference ­facilities in Melbourne and Perth, while its hotels in both cities would remain open with reduced capacity. Its Crown Aspinalls operation in Britain has also ceased operations.

“COVID-19 has created unprecedented challenges for Crown and many others in Australia. In accordance with the statements issued by the commonwealth government and the direction of the Victorian Deputy Chief Health Officer, we have closed certain of Crown’s facilities in Melbourne and Perth,’’ Crown chief executive Ken Barton said on Monday.

“We continue to balance our responsibilities to our people in a manner which is in the interests of the health and safety of Crown employees, customers and the broader community.”

Mr Barton said Crown continued to assess all elements of the changes to Crown’s business operations, including the financial ­impact.

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Crown Melbourne alone is Victoria’s largest private-sector, single-site employer with more than 12,500 employees and it paid more than $238m in taxes to ­Victoria in the last financial year.

On Saturday the Victorian government removed the coronavirus exemption for the Crown Melbourne complex that had allowed it to remain open at a more limited capacity.

Since February 21, Crown’s share price has fallen 48 per cent and questions remain over whether the company’s flagship $2.4bn Barangaroo development in Sydney will open some of its facilities later this year as planned.

Credit Suisse has questioned whether the building site will be shut to protect workers from the coronavirus. “Even if there is a delay, it may be short enough to have the venue open in time for Chinese New Year 2021 — and that remains our assumption,’’ the broker told clients.

Shares in Star Entertainment joined those of Crown in being suspended from trading on Monday, when Star said it was considering “revised operating con­ditions to be adopted following further developments in governmental responses to the novel coronavirus (COVID-19) and related impacts on The Star’s business.”

Star owns casinos in Sydney, the Gold Coast and Brisbane and is also part of a consortium undertaking the $3.6bn Queen’s Wharf development in Brisbane that involves the construction of 600 apartments and 1000 hotel rooms.

Star Entertainment shares have more than halved in value since late last month.

Earlier on Monday SkyCity Entertainment closed its Adelaide casino following the federal government’s coronavirus lockdown.

SkyCity shares closed 15 per cent lower on Monday at $1.23.

SkyCity CEO Graeme Stephens said SkyCity had started consultation with the unions in South Australia and expected to finalise a plan for its employees over the next week.

Wagering group Tabcorp on Monday said more than a third of its revenues were at risk amid the closure of pubs and clubs ordered by the federal and state governments and withdrew its revenue and earnings guidance.

It said its undrawn banking ­facilities were roughly $600m and that other than a US private placement of $171.5m that matured in December, it had no other debt maturities until April 2022.

Tabcorp shares closed down 13.2 per cent at $2.18.