Australia – Morgan Stanley predicts VIP bounce back for Crown and The StarBy Phil - 13 October 2017
Morgan Stanley has said that Australia’s two leading casinos have seen a surge in VIP play during the first three months of the current fiscal year.
The high-roller segment suffered in Australia following the arrests in China of 19 members of staff at Crown who were found guilty of improperly promoting casino gaming. In 2017 Crown saw its VIP play slump by 48.9 per cent to A$33.3bn whilst Star suffered an 18.6 per cent VIP decline to A$554.7 m. Having previously predicted a six per cent decline, it now said it believed Crown’s VIP business would increase by about 9.4 per cent in 2018 compared to 2017.
Morgan Stanley said: “Junket operators spoke to a material improvement across both Crown’s Melbourne and The Star’s Sydney properties in recent months versus the VIP volume lows seen in 2017. Since the Crown detentions in October 2016, Australia’s share of the VIP market has halved from six per cent to three per cent as at 30 June 2017. With the casinos to cycle the significant declines from the second quarter of 2018 onwards, combined with the recent positive commentary of a pick-up in volumes, we expect 2017 will mark the bottom for Australian VIP. With the market focusing on the weak domestic environment and not factoring much in the way of a recovery for VIP in 2018, we believe any rebound in growth would be taken positively.”