High-rollers are doing serious damage to Crown Resorts’ bottom line, according to the Australian casino operator’s chairman James Packer (pictured, in hat). Speaking at Crown’s annual general meeting on Thursday, Packer said business had been soft at its Melbourne and Perth casinos, with main floor and machine gaming revenue up a mere 2% over the first 15 weeks of Crown’s fiscal year that began July 1.
Things are even worse in Crown’s VIP rooms, where Packer claimed “the punters are killing us.” Packer said Crown’s VIP business was “almost $100m below the theoretical result” due mainly to “bad luck.” Worse, Crown CEO Rowen Craigie said Crown’s traditional revenue ace in the hole – its one-third stake in Melco Crown Entertainment – was having its own problems given Macau’s current revenue slide.
Packer, who appears to have been in a somewhat stroppy mood, told shareholders that “despite what some people will tell you, our business is not a license to print money.” Packer tore a strip off “so-called expert commentators” who view gambling operators “as a social ill to be tolerated and eventually wound back or handicapped by extra taxes and charges, rather than as a responsible corporate citizen that is making enormously positive contribution to countless Australian workers and small businesses.”
Packer’s ire was likely prompted by complaints voiced over the generous terms the state government in Victoria offered Crown Melbourne in extending the property’s gaming license. The state parliament’s upper house approved the deal on Tuesday, but not before Greens MP Greg Barber complained about its terms, in particular a clause requiring the state to pay up to $200m in compensation should legislators enact any future laws that negatively impact Crown Melbourne’s bottom line.
Packer told shareholders that he was “sick of governments” begging Crown to invest in their communities, only to “change the rules with total disregard to the impact those changes may have on our investment and our staff.” Packer insisted that Crown was “not a tobacco company” and its critics were “blinded by their prejudices that prevent them from having an open mind or judging us on our merits.”
Following his tirade, Packer declined media invitations to expand on his governmental grievances, suggesting he was “happy with everything” before exiting the building in search of an old mate to punch. Craigie attempted a little damage control, telling the Australian that Packer was “making the general point that regulatory certainty is very important for businesses like this where you’re investing billions of dollars.”
