VIP win rate boosts Crown profit; Punters Club leader was roulette fan at age 12

TAGs: Australia, Crown Ltd., punters club, Zeljko Ranogajec

crown-profit-soars-vip-winAustralian casino operator Crown Ltd. posted a 22% gain in normalized profits to AU$415m (US$436m) for the fiscal year ending June 30. (Normalized profits are considered a more accurate reflection of performance because they eliminate variance in theoretical win rate from high-rolling VIP gamblers.) Non-normalized profits, on the other hand, were up a whopping 52.8% to $513.3m, as VIP win rate increased at Crown’s Australian casinos as well as at the Melco Crown operations in Macau, in which Crown holds a 1/3 stake (worth $135.8m of Crown’s non-normalized full-year profit). Overall revenue for the year was up 17% to $2.8b.

Crown Melbourne’s $564.2m contribution to overall earnings was up 10.4% over the previous year. Main floor gaming revenue rose 6.6% to $992m, while VIP gaming contributed $481m. Earnings from the Burswood facility in Perth were up 53.7% to $270.9m. Both facilities have a theoretical VIP win rate of 1.35%, but Melbourne scored 1.5% for the year while Burswood’s rose to 1.84%, leading to VIP revenue growth of 15% and 32.1% respectively. Despite the hot hand, CEO Rowen Craigie cautioned that gaming revenue growth slowed across the board in the second half of the financial year, a statement that’s becoming a refrain from any operation in the Asia-Pacific region that relies on a steady stream of Chinese VIPs. While Crown reported a $20.1m gain on the 10% stake it holds in rival casino operator Echo Entertainment and from Crown’s 4.9% share of betting outfit Tabcorp, Crown says it has since “substantially reduced” its Tabcorp holdings.

Meanwhile, documents from the Australian Tax Office (ATO) court fight with members of the so-called Punters Club – the group of math geeks/sports bettors who make thousands of computer-generated bets daily on global sports and race events, accounting for billions in annual turnover – have shed a little more light on the group’s leader, Zeljko Ranogajec. Ranogajec, who has since left the country, is nonetheless appealing the ATO’s assessment that his share of the Club’s winnings qualifies as business income and is therefore subject to retroactive taxes from as far back as 1991, creating a potential liability of tens of millions of dollars.

In documents filed with the court and reported by the Blacktown Sun, Ranogajec’s appeal states that his “first encounter with gambling was around the age of 12. His father was a regular visitor to Wrest Point Casino and at home the applicant would experiment with systems using a toy roulette wheel.” Refuting the ATO’s claims that the Club was a business operation, Ranogajec’s appeal insists that the Club was an informal arrangement between alumni of the University of Tasmania that “operated on trust.” Also fighting the good fight against the ATO is Club member and owner of Tasmania’s Museum of Old and New Art, David Walsh, from whom the ATO is seeking $37m in back taxes.


views and opinions expressed are those of the author and do not necessarily reflect those of