As casino profits continue to fall in Australia, one man, in particular, must be looking on with horror – James Packer.
The former executive chairman of Crown Resorts has seen his personal fortune slide a lot further south as Crown Resorts stock prices have tumbled down by almost 20% since August.
Packer owns 46% of the company, now worth around $2.7bn (￡2.1bn). It is estimated that he has lost around $602m (￡469m), which must be quite a blow, even to Australia’s richest man.
Widespread decline
And Packer isn’t the only one to have lighter pockets after a tumultuous summer season.
While Crown Resorts, which operates resorts and casinos in Perth and Melbourne, saw its stock drop over investor concern about the high-roller Chinese market and a slowing economy, shares of its rival, Star Entertainment, have fallen by more than 21%.
And, over in Macau, the news continues to be bad as Wynn Resorts reported a 15% drop after a monsoon summer and slow trade during the week without any guarantee of larger numbers on the weekend. Wynn Resorts CEO Matt Maddox said that the waters are quite choppy.
“What we’ve seen more recently is murky. Since Golden Week we’ve noticed that, during the mid-week, it’s been quite choppy and the weekends have been sporadic.”
Creative thinking needed
To attract the punters back, casinos have to think creatively. Notably, Star Entertainment is pushing the boat out, translating its name into Chinese and marketing over Asian social media networks such as WeChat.
For Crown and Packer, there are a few more bumps in the road ahead. Packer has now resigned from the company twice, the last time in March citing mental health issues after a rather public breakup with singer Mariah Carey.
It came after plans for an expansion in 2017 started to fail and Crown decided to shut down its overseas expansion plan, withdraw from Macau, and close most of its offices in Asia – even selling its $300m (￡234m) worth of assets in Las Vegas to pay off debts.
The company decided to focus on its home turf in Australia. But even that seems to be in jeopardy at the moment. While Crown did announce a 13% uptake in VIP slots this year, it was less than half the expected 28%. There has also been some bad press about slots jamming to contend with.
Still, Crown Resorts is continuing with plans for Sydney, which experts predict could net them as much as $8.9m (￡6.9m) in table revenues and around $13.1bn (￡10.2bn) in VIP turnover. Crown just has to hold on until the resort is completed in 2021.