Australia's Crown Resorts leaves Las Vegas, sells down Macau
By Byron Kaye and Jonathan Barrett
SYDNEY (Reuters) - Australia's No. 1 casino company Crown Resorts Ltd CWN.AX is planning a near-total exit from the world's two biggest gaming hubs, Las Vegas and Macau, as a gambling crackdown in China hits profits and throws its expansion plans into disarray.
In a surprise trading update on Thursday, the company scrapped plans to build a casino in Nevada's famed strip, said it would sell half its stake in Macau-focused Melco Crown Entertainment Ltd MPEL.O and canceled plans to spin off its international assets.
The retreat from overseas casinos shows the impact the Chinese government's anti-graft campaign is having on casino operators throughout Asia, especially the southern Chinese territory of Macau, the only place in China where casinos are legal.
Majority owned by Australian billionaire James Packer, Crown has been hard hit by the decline in VIP gaming revenue at its Australian resorts and was rocked in October by the arrest of 18 of its staff for "gambling crimes" in China.
"There's no doubt that those arrests changed everyone's outlook for the sector," said Angus Gluskie, a portfolio manager at White Funds Management, which holds Crown shares.
"It's not as easy as it previously looked."
Crown said it would use the A$1.6 billion ($1.2 billion) proceeds from the sale of its Macau stake to cut debt and pay a special dividend of A$500 million, more than half of which would go to Packer himself.
Macau has suffered gaming revenue declines every month for more than two years, while Crown said turnover from VIP gamblers - largely Asian tourists - at its Australian casinos would likely fall 45 percent in the six months to end-December. Continued...