Star Profits Up Despite Drop in Chinese VIP Numbers
Australian casino operator, Star Entertainment Group, has revealed the impact that China’s casino crackdown has had on its VIP rooms and profits at its flagship casino, The Star, in Sydney.
The casino group has released figures showing that The Star’s net profit after tax increased to A$141.8 million, a 135.2 percent rise, in the six month period ending December 31. However, normalised profits which account for variance in VIP win rate, was $107.1 million, a drop of 17.7 percent compared to the same time last year.
The rise in statutory profit for the period has been attributed to a run of good luck for the casino in its International VIP rebate business. Their benchmark VIP win rate is 1.35 percent, while the rate for the first half of the year was 1.62 percent and last year’s win rate was particularly low at 0.88 percent.
The Star has in the past drawn 80 percent of its high rollers from Hong Kong, Macau and Mainland China; however these numbers dropped after the arrest in China of employees of their rival Crown Resorts. According to Matt Bekier, chief executive of The Star, the company is now focusing on “diversifying our international revenues, including through South East Asian VIP and Asian Premium Mass.”
Specifically, they plan to compensate for the drop in number of Chinese high rollers by attracting more VIP gamblers from Singapore, Malaysia, Indonesia and Thailand. They are also looking to attract more mid-range gamblers.
Speaking about their profits from markets other than from North Asia, Mr Bekier said “It’s not big enough yet to fully offset the negative impact of north Asia, but it’s clearly helping us to mitigate the impact.”
March 23, 2017