Crown Shows Depths of Covid-19 Pain in Year-End Results

The Crown Resorts Limited fiscal year runs from July 1 through June 30. This week, the company released its full-year 2019-2020 results.

The impact of the coronavirus pandemic and resulting closures was more detrimental to Crown’s bottom line than anticipated. Its net profit fell 80%.

Crown 2019-2020 Results Overview

There was no way to sugar-coat the results when released this week.

  • Net profit (NPAT) down 80.2% to $79.5 million
  • EBITDA down 40.6% to $504.6 million
  • Australian resort revenue down 25.7% to $2,214,900
  • Main floor gaming revenue down 26.9% to $1,235,200
  • VIP play turnover down 46.5% to $20.4 billion
  • Actual VIP revenue down 26% to $398.2 million
  • Non-gaming revenue down 22.7% to $581.5 million

Covid-19 Hardships

Crown made sure to note that state and federal governments forced the suspension of gaming activities from mid-March through – in most cases – the end of the fiscal year due to the pandemic. This forced Crown to stand down approximately 85% of its staff, which totaled more than 11,500 employees.

The only casino to reopen before the end of the fiscal year was Crown Perth, which opened its doors with limited capacity on June 27, 2020.

It should be noted that Crown secured $111 million JobKeeper subsidies from the federal government through June 30, out of which $43.4 million went to staff wages and maintaining operational readiness for reopenings. And $67.9 million paid stood-down Crown employees in their entirety.

The company also expects to qualify for the second round of JobKeeper subsidies in September in relation to its Melbourne employees.

Crown estimated that the Covid-specific closures cost the following:

  • Crown Melbourne = $65.8 million
  • Crown Perth = $19.7 million
  • Crown Aspinalls = $1.2 million
  • Corporate = $20.6 million

When that total figured in equity-accounted investments and tax effects, it came to $81.6 million.

CEO Ken Barton noted that coronavirus-related costs began taking hold in January 2020 when “Crown began to experience softer trading conditions as a result of travel restrictions and general community uncertainty in response to COVID-19, particularly impacting visitation to Crown Melbourne.”

Barton also noted that Crown established a Hardship Fund to provide targeted financial assistance to its employees that have experienced tougher-than-average hardships due to the virus.

Half-Year Predicted Pre-Covid Troubles

About six months ago, Crown revealed its half-year financials for the period ending December 31. While not catastrophic, the numbers were not good.

The six months from July 1 through December 31 showed a solid $1.46 billion in revenue, but that figure illustrated a 5.2% decrease from the same period in the previous year. Net profit was down 34.2%. VIP turnover was down 34.2%, and EBITDA was down 9.7%.

At that time, Barton said the VIP program play turnover was down due to soft market conditions but exacerbated by the negative publicity of the governmental inquiries and fairly consistent news regarding the Crown scandal. He blamed a highly-regulated market for the number of investigations.

Notes from Individual Resorts

The Crown report broke down the individual casinos (and resorts) and their numbers.

Crown Melbourne revenue was down 26% overall for the year. Main floor gaming was down 27.9%, VIP program play down 22.4%, and non-gaming revenue down 24.3%.

Crown Perth’s overall actual revenue was down 24.9%. Its main floor gaming showed a 24.1% year-on-year decrease, VIP program play decrease of a whopping 45.6%, but only 19.7% of a decrease for non-gaming revenue.

Thirdly, for Crown Aspinalls, total revenue was down 24%. VIP program play was down 24% and non-gaming revenue down 25.7%.

Crown Digital revenue increased from the previous year by 3.1%, obviously a result of more people turning to online social gaming and betting during the pandemic. EBITDA for that sector was up 32.9%.

Inquiry Continues as Covid Allows

The initial wave of Covid-19 forced a hold on the New South Wales inquiry into Crown Resorts on April 3. However, the NSW Independent Liquor & Gaming Authority resumed in June with new hearings set for July.

Early August hearings displayed an angry public, much of which was directed at Crown over the 2016 arrests of its 19 employees in China and Crown’s treatment of them. Crown attorneys argued that the public hearing would hurt Crown in the upcoming class action lawsuit. However, Commissioner Patricia Bergin SC denied the request for private or delayed hearings because the burden on witnesses was “really not an issue,” per The Sydney Morning Herald.

Other issues discussed in recent hearings included warnings of visa program fraud, which came repeatedly and alarmingly from an Australian consulate in China as far back as 2010. Meanwhile, the head of Crown’s legal department claimed he had no knowledge of concerns regarding junket operators from China.

Hearings will continue through August 26 and beyond if necessary. Information about testimony, witnesses, and other inquiry information is on the website established specifically for this case.

The only word from Crown in its full-year report about the ILGA inquiry was that it would not comment “out of respect for the inquiry’s process.” But Crown is “continuing to explore ways to enhance its compliance and governance process.”


Rose Varrelli

Rose Varrelli has always been passionate about online casinos, as she’s been a player at a variety of places for years. Rose turned her personal knowledge and insight into a writing career. She aims to provide readers with the most up to date, informative news in the world of online casinos!


Red Rake Gaming in Flamingo Paradise Before Vendetta

Red Rake Gaming in Flamingo Paradise Before Vendetta

Blackstone Ups Its Crown Offer

Blackstone Ups Its Crown Offer

70 New poker Machines Coming to Truganina

70 New poker Machines Coming to Truganina