Australian gambling giant Crown Resorts has recorded a loss of under AUD 1 billion for the last financial year, as the combination of financial penalties, investments in compliance and COVID-19 restrictions outweighed the group’s profits. The Blackstone-owned company lodged a net loss of AUD 945.4 million ($635.2 million) for fiscal year 2022 with ASIC on Tuesday.
Crown’s EBITDA fell to a loss of AUD 699.6 million ($470.5 million), with AUD 710.1 million ($477.3 illion) in significant items. Statutory revenue for the period landed at AUD 1.9 billion ($1.2 billion), up 20% on the prior comparable period.
Revenues at Crown Melbourne increased from AUD 567.5 million ($387.2 million) to AUD 923.8 million ($620.5 million); and grew from AUD 68.4 million ($45.9 million) to AUD 113 million ($75.9 million) at Crown Sydney, while Crown Perth fell from AUD 740.9 million ($497.4 million) to AUD 731.1 million ($491.4 million). Crown Sydney’s gaming floor was not operational during 2022.
Crown Casino in Melbourne The company’s loss blows out to AUD 1.24 billion ($834 million) when excluding the AUD 296.3 million ($199 million) it received in income tax benefits due to its lack of profits. As reported by the Sydney Morning Herald, a Crown representative stated the results had been heavily affected by a series of one-off costs, and should not be taken as a forward view of operating performance.
In addition to navigating a “challenging” environment during the pandemic, during the year, Crown also experienced 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 spokesperson added.
The casino operator’s expenses grew from AUD 1.98 billion ($1.3 billion) in 2021 to more than AUD 3.09 billion ($2.6 billion) in 2022. Regulatory costs, coming in at AUD 617.2 million ($414.9 million), were the biggest weight on Crown’s book, as it includes provisions for the AUSTRAC enforcement investigation and penalties from other regulators.
The loss was further deepened by AUD 145 million ($97.4 million) to beef up staff numbers and pay for lawyers and consultants to bring its compliance systems up to scratch after evidence of money laundering, neglect and exploitation of problem gamblers, and infiltration of its junkets program by organized crime.
Crown Casino in Perth Crown was fined a record-breaking AUD 120 million ($80 million) penalty for failing to encourage responsible gaming at its Melbourne casino by the Victorian Gambling and Casino Control Commission (VGCCC) earlier this month, bringing its Victorian penalties to AUD 200 million.
Fines linked to the NSW and WA inquiries it underwent during 2022 are also expected to be high after the states upped their maximum casino penalty limits to AUD 100 million. Financial crimes watchdog AUSTRAC has launched proceedings against Crown for allegedly allowing “high-risk” VIP patrons to churn billions of dollars through its casinos.
In 2019, an investigation revealed Crown had been infiltrated by international criminal syndicates and money launderers. Since then, government inquiries in the three states where its casinos operate have ruled it unfit to hold a casino license, preventing it from opening the high-rise casino at its newest tower at Sydney’s Barangaroo in late 2020.
Crown was forced to overhaul its board, management and procedures to satisfy the regulators, who approved a conditional license for Crown to operate its Barangaroo casino in June, which is valid until December 31, 2023.
Crown Casino in Sydney Blackstone took the reins of the casino operator in July, after shareholders voted to accept its offer in May, ending three years of chaos under former major shareholder James Packer. Since then, the group said it has invested heavily in anti-money laundering and counterterrorism resources and more than doubled its responsible gaming team.
Crown’s newly minted chief executive Ciaran Carruthers committed to changing the casino’s growth strategy in September and said he’d like to see Crown become the “gold standard” for responsible gaming in Australia.