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Casino operators from around the world pay special attention to the Chinese market because VIP gamblers from China are known for making heavy bets on a consistent basis which turn out to be a very profitable segment for casino operators.
Crown Resorts, which is the biggest casino operator in Australia has depended heavily on VIP gamblers from China over the years.
The company recently came out and said that their revenues during the second half of 2018 had declined significantly mainly because revenue from these high stake Chinese gamblers were down.
Crown Resorts like many other casino operators took a massive hit in VIP revenue during 2016-2017 when Beijing launched an ant-gambling crackdown targeting Macau casinos and high stake gamblers in China. As a result, VIP Chinese gamblers kept a low profile and stayed away from casinos which forced casino operators to come up with another strategy to make up for falling revenues.
Once Beijing relaxed its crackdown, Chinese gamblers were back at the casinos and VIP revenues were once again back on track. However, VIP gambling revenues across all Crown Resort casinos were down during the second half of 2018 and this time is mostly because of the sluggish Chinese economy.
John Alexander, executive Chairman of Crown Resorts said that this wasn’t surprising as the Chinese people much like the Australian people were feeling less wealthy than they were in recent years which has prevented them from spending freely at Crown Casinos.
Chinese VIP Market Will Bounce Back
Crown Resorts informed its investors earlier this week that it had witnessed a 12.2 percent decline in VIP revenues for the second half of 2018. The flagship Crown Melbourne property saw VIP revenues touching $17.3 billion which was a 11.2 percent decline. The total VIP revenues recorded by Crown during the second half of 2018 stood at $19.9 billion.
However, Crown Resorts remains confident that its VIP market will bounce back sooner than later.
In a statement, Ken Barton, CFO for Crown Resorts said
We look at longer-term trends and it’s still a very substantial VIP market across the region. There is a lot of wealth in China – wealth continues to grow, there is more affluence in China travelling overseas and a gambling experience is something that is looked on favourably as an option for people coming out of China.
