Macau, Las Vegas – 15 December 2016
Australia’s No. 1 casino company Crown Resorts Ltd is planning a near-total exit from the world’s two biggest gaming hubs, Las Vegas and Macau, as a gambling crackdown in China hits profits and throws its expansion plans into disarray.
In a surprise trading update, the company scrapped plans to build a casino in Nevada’s famed strip, said it would sell half its stake in Macau-focused Melco Crown Entertainment Ltd and cancelled plans to spin off its international assets, Reuters reported.
The retreat from overseas casinos shows the impact the Chinese government’s anti-graft campaign is having on casino operators throughout Asia, especially the southern Chinese territory of Macau, the only place in China where casinos are legal.
Majority owned by Australian billionaire James Packer, Crown has been hard hit by the decline in VIP gaming revenue at its Australian resorts and was rocked in October by the arrest of 18 of its staff for “gambling crimes” in China.
Crown said it would use the A$1.6 billion (US$1.2 billion) proceeds from the sale of its Macau stake to cut debt and pay a special dividend of A$500 million, more than half of which would go to Packer himself.
Macau has suffered gaming revenue declines every month for more than two years, while Crown said turnover from VIP gamblers – largely Asian tourists – at its Australian casinos would likely fall 45 percent in the six months to end-December.
Overall Australian revenue would fall 12 percent for the period.
Crown did not elaborate on its decision to scrap development on the site slated for Alon Las Vegas, but it shuts the door on the company’s third attempt to establish itself in the city.