Australian VIP set to complete full recovery as Star turns tables on

first_img Load More Australia’s VIP market is on track to complete a full recovery when 1H earnings results are released next month, with numbers tipped to return to the same peak levels seen in the months before 19 Crown Resorts employees were arrested in mainland China in October 2016 for promoting gambling.The recovery, coming just 12 months after the last of Crown’s staff were released from a Shanghai jail last July, will likely see Australia-wide VIP revenue surpass the AU$60 million it reached in 1H16, having plummeted to just AU$33 billion at the height of Crown’s China crisis early last year.However, the tables have very much turned for Australia’s leading operators with rival Star Entertainment Group having taken over Crown’s long-held position as the country’s dominant VIP player.Speaking to Inside Asian Gaming for the August 2018 cover story titled “Oz VIP: A new dawn” – released today – JP Morgan’s Vice President Equity Research, Gaming and Leisure, Donald Carducci said that the landscape for Australian VIP has quickly changed since the Crown arrests.“Star has definitely benefited,” he said. “VIP hasn’t completely rebounded yet but in the recent half it looks like it mostly will.“When you look at where the two companies were in 2016 compared with 2018, they’ve basically flipped, and in this half you’ll continue to see VIP growth so we’ll most likely be back to the historic level of turnover.”Carducci noted that Crown’s flagship property, Crown Melbourne, has always raked in more VIP revenue than Star Entertainment Group’s The Star Sydney, “but now Star Sydney does more than Crown Melbourne.“In fact, Star Gold Coast does more than Crown Perth. Historically Crown always did better than Star so I think there is no doubt that Star benefitted from the October 2016 arrests.”Carducci also pointed to Star’s partnership with Hong Kong conglomerates Chow Tai Fook and Far East Consortium, both of which recently became equity partners in Star with the purchase of identical 4.9% stakes, as providing huge upside to the company in the coming years“Star absolutely has an opportunity now and Crown has to get back on the horse, but I think Star will continue to see strong VIP numbers, especially with their relationship with Chow Tai Fook and Far East Consortium,” he said.“That loyalty program has about six million people and the fact that two of the three wealthiest Chinese families are now equity partners suggests that they are absolutely going to pump their members through Star. I think it’s really, really positive for Star in terms of their outlook for VIP turnover in comparison to Crown who are down on one knee.“Whether or not Star maintains the pressure, time will tell.”The full cover story from the August edition of IAG can be found here. RelatedPosts Inquiry into Melco Resorts acquisition to determine whether Crown Resorts still suitable to hold NSW gaming licensecenter_img Melco Resorts defers acquisition of second tranche of Crown shares until conclusion of regulatory inquiry Hong Kong Jockey Club cites “serious integrity concerns” in complaint over Crown Resorts-owned betting exchangelast_img read more