- Crown’s VIP revenue falls by 46%
- John Alexander calls allegations preposterous
- Lawrence Ho is now part of the board but yet not cleared by regulators
On the annual general meeting, Crown Casino failed to address allegations about criminal links while the VIP revenue plummeted by 46%.
Crown Casino VIP Segment Drops, Investigations Continue
Amid falling high roller revenue and ongoing investigations into potential links with organized crime groups, Crown Casino is beleaguered on all fronts.
During the company’s annual general meeting on Thursday, October 24, Crown’s chief executive John Alexander reassured investors that any allegations about the company’s involvement in criminal activities were sensationalist and unproven, and therefore couldn’t be taken seriously.
Mr. Alexander was looking to reassure skittish investors who saw the VIP business plunge by 46% in the first half of the financial year. Crown has been taking heat since The Age and The Sydney Morning Herald have published a report alleging that the company was running complicated behind-the-scenes schemes to allow wealthy Asian players enter Australia to play.
On one occasion, the name of Chinese President Xi Jinping’s cousin was cited. Crown has since responded by denying all and publishing full-page advertisements in major newspaper, hitting back at the media outlets that had originally published the news.
Investors and Anti-Gambling Activists in the Midst
Instead of addressing the claims, Crown has responded by snapping back at any allegations while the Victorian Commission for Gambling and Liquor Regulation and the NSW Independent Liquor & Gaming Authority have already launched their investigations.
The media report hit Crown at roughly the same time when one of the main stakeholders, James Packer, decided to sell half of his own stake in the company to Lawrence Ho for $2 billion. Originally, concerns were raised because of Mr. Ho’s connection with his father, Stanley Ho, who is the founder of the Macau gaming industry.
As such, Mr. Ho would need to go a thorough vetting to determine whether any of his ties to his father could pose a threat to the competitiveness of the industry in Australia. The NSW is currently conducting a probe into whether the deal can continue. Nevertheless, Mr. Ho arrived as an official shareholder on Thursday notwithstanding the investigation that still needs to clear him.
Meanwhile, Tim Costello and Stephen Mayne, who are prominent anti-gambling activist, attended the Thursday meeting and urged Mr. Alexander to address the concern of shareholders:
When are you going to address the concerns your own shareholders are expressing here to the tune of $1.5 billion worth of stock, or is this just going to be ignored and dismissed like everything else at Crown.
VIP Segment is ‘Very Volatile’
The response from Crown’s boss was that the segment had become too volatile and that more ‘macroeconomic headwinds’ were coming. Interestingly, none of the other brands that presently operate VIP segments in Sydney have registered similar drop in their performance, pointing to many players withdrawing from the Crown properties.
Back to Mr. Ho, if cleared by the ongoing investigation, he will hold voting rights equal to 9.99% of Crown’s shares. Meanwhile, Mr. Packer’s stake in the company has been reduced to 37% in light of the latest shift of capital.