According to the Sydney Morning Herald, foreign high roller gamblers, especially from China, are returning to Australia's shores and heading to local casinos. This is good news for Australian casino groups such as Crown Resorts, which suffered a major setback after some of its staff were arrested and jailed in mainland China last year for illegally promotion gambling activity.
Many questioned whether Crown could bounce back from its dismal numbers as its VIP program was nearly halved due to the Chinese arrests. Its numbers dropped from $1 billion in the 2016 financial year to just $605 million one year later.
Analysts Optimistic About Oz Casino Revenues
The turning point came after Crown Resorts and the Star Group, posted good trading results in their VIP programs. Analysts from Morgan Stanley investment back headed to the Chinese gambling enclave of Macau to experience for themselves the state of the VIP gambling market. They met up with casino operators and were able to determine, according to a client note posted on Friday, that the VIP market in China was actually in "good shape".
The note said that after their recent travels to Macau, and after receiving feedback from industry contracts, it was confirmed that "this growth has continued post the trading update and is expected to grow further."
"A very large junket provider recorded their highest rolling chip ever for Melbourne in the month of October, while business in Sydney for Chinese VIPs is also reported to be growing substantially on last year," read the note.
Interest in Crown's Barangaroo Casino
Another interesting point made by the analysts in their note was that Chinese VIP gamblers would be attracted to Crown Resorts' Barangaroo Casino.
"We asked junkets where VIP customers would likely go," they wrote. "The view is that VIP customers prefer ‘newer' casinos and therefore preference would likely be for Crown Sydney unless Star Entertainment Group Sydney can provide a better service."