AU Casinos Hoping To Recover High Roller BusinessTisha Walden | 24 Apr 2019
Analysts say that the main effort of the biggest casino operators in Australia is to once more be able to attract rich Asian high-rollers, notwithstanding the overall economic decline in China. They are optimistic about a recovery being possible in the next fiscal year.
China has recently recorded the slowest economic growth rate of its economy in almost 30 years, a fact largely driven by its disagreements with the USA. Australian casino giants like Star Entertainment and Crown Resorts have faced a marked downturn in the revenue usually generated by Chinese players who like to spend big, seriously hurting their profits.
Assayers for the gambling industry have been keeping an eye on the situation as it stands in Macau. Macau is the biggest betting hub in the world and is known as one of the punters from mainland China’s most desired destinations. Staying informed regarding this area is part of the experts’ efforts to ascertain the strength of the international high-roller gambling sector.
Recovery for the VIP Player Market
Even though share prices on the VIP market have fallen as a whole, Macquarie Wealth Management analysts have seen a sharp change in the attitude of residents of mainland China. This has been to increase the confidence of big spenders, and it has been revealed that a VIP gambling market recovery has been included in the 2020 financial year, even though they remain cautious as to the volumes of high-rollers in the second half of this fiscal year.
Loss of Turnover from High-Rollers
Apart from observations by analysts and the monitoring of the sector, executives at two of the biggest casino operators in Australia divulged that they had noticed a steep decline in cash being spent by more extravagant gamblers from Asia.
Crown Resorts, Australia’s biggest casino operator, told its investors earlier on this year that turnover generated by these players had seen a 12.2% decrease over the six months ending on December 31 2018, at AU$19.9 billion. Star Entertainment, another Aus behemoth, saw a fall of 33% being reported in its casinos’ profits over the same period.
Despite this decline, Macquarie Wealth Management analysts let it be known that The Star, which currently has casinos operating in Brisbane, the Gold Coast, and Sydney, still seems attractive to players. Experts have also added that the company’s domestic gambling business still accounts for more than 80% of its EBITDA. It also constitutes a better quality of business than the VIP sector does, as it is able to generate bigger earnings at better margins.