Crown Resorts Posts Near $1 Billion Loss
They say it never rains but it pours when you find yourself under a cloud, and it is definitely raining in the Crown Resorts camp. Crown Resorts is almost as famous for the negativity surrounding it than it is its high roller casino games. The Australian gambling giant finds its name in the headlines for all the wrong reasons again. This time it is for posting a near $1 billion loss during the past financial year. Crown expects up to $617 million in fines in the coming year, further rubbing salt into its wounds.
Not having shareholders to worry about is one saving grace for Crown. This has been the case since Blackstone Group acquired the company for $8.9 billion in June. Crown’s properties are packed to the rafters with casino games and real money slots, but they have not stopped Crown posting a massive loss. Crown’s actual losses weighed in at $1.24 billion. However, its lack of profits triggered income tax benefits. Some $617 million of that astronomical loss stems from Crown squirrelling away funds to stem the flow of potential fines coming its way.
Why Has Crown Posted a $1 Billion Loss?
Many companies lose money during a financial year, but a $1 billion loss is something else. As mentioned, $617 million is stashed away to pay for fines heading Crown’s way. Regulators came down on Crown like a ton of bricks following high-profile investigations into how the company was run. Abusing the casino VIP program, money laundering, and straight-out lying resulted in Crown being deemed unfit to operate casinos. However, its licences were not cancelled.
A spokesperson for Crown partly explained the $1 billion loss.
“The financial performance reflects the challenging environment faced by Crown during the pandemic, with significant impact on our operations, particularly in the first half. During the year, Crown also navigated significant regulatory matters. These matters are ongoing, and we continue to cooperate with the relevant parties on resolutions. Crown has a strong desire to continue to invest in its business, jobs, the industry, and community.”
The disgraced casino giant spent an additional $145 million on wages for responsible gaming staff. Furthermore, recruiting lawyers and paying consultancy fees took a chunk from Crown’s bottom line.
Overall, Crown’s operating expenses soared to $3.09 billion, up from $1.98 billion last year. It is easy to see why the company posted a near $1 billion loss.
It Is Not All Bad News For Crown
No business in the world would take any delight from losing almost $1 billion. However, Crown’s financial statement is not all bad. Revenues at Crown Melbourne and Crown Sydney substantially increased. Although, Crown Perth‘s revenue fell.
Crown Melbourne saw $923.8 million in revenue, up from $567.5 million in 2021. Crown Sydney increased from $68.4 million to $113 million. Sydney’s figures will rise as its vast high roller casino floor is now operational. Crown Perth’s revenue contributed $731.7 million, down from $740.9 million. That is an impressive result considering Perth remained locked for long periods due to COVID-19 restrictions.
Other Pokies News – Ainsworth to pay dividends
Another of Australia’s key players in the gambling industry, Ainsworth Game Technology, also posted positive news this week. Ainsworth is the leading supplier of pokies in Australia. Its management staff spoke at the company’s Annual General Meeting earlier this week. Here, they revealed plans to restart paying dividends to shareholders.
Ainsworth has more than $50 million in surplus cash reserves. It plans using this money to help it self-fund any expansion deals, in addition to rewarding loyal shareholders. CEO Harald Neumann is optimistic for Ainsworth’s future. He believes Ainsworth’s profit before tax for the next six months will amount to $18 million.
