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  • 8 years later...
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Here are analysts at CLSA's thoughts on what the developments mean for Crown and Australia's other casinos with VIP business from China:


1. They may need to shut down their direct VIP marketing operations


Given the scale of the arrests, it begs the question of whether the Chinese government has redefined what foreign casinos are able to promote in China and they are making an example of Crown. It would be suprising if Crown was doing anything different to other casinos with marketing staff in China.


Crown and also Star and SkyCity are going to have to reconsider whether they employ any direct marketing staff into China.


It's unclear whether the crackdown will eventually spread to junket operators bringing players to Australia as opposed to casino staff but it has to be a possibility.


It may be that the Chinese government wants to funnel all VIP play through junkets where they potentially have more control.


2. What's the Korean example tell us?


The stock prices are yet to recover. Paradise is down 50 per cent since the arrests and Grand Korea Leisure is down 40 per cent.


VIP revenues in Korea are down 20 per cent but it's more like 40 per cent for those two casinos.


However Korean VIP is only direct business, they don't use junkets. So if there is no impact on junket business, then the impact will be materially less. However other VIPs might be reluctant to go to Australia given what appears to be a focus on Australia.


3. Crown is most exposed to a decline in VIP


We estimate 30-40% of Crown's VIP is direct compared to Star at less at 20%, with the rest junket.


SkyCity has the highest proportion of direct VIP business at 60%.


However we estimate VIP is also a higher proportion of earnings for Crown at ~20% of EBITDA vs. ~12% for Star and 10% for SkyCity.


Additionally a greater proportion of Crown's project pipeline is focused on Chinese VIPs, specifically the Crown Sydney casino.


Stock prices are likely to be weaker even if there is no VIP impact ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ this incident highlights the potential fragility of VIP play and its exposure to Chinese regulation and enforcement.


Another issue is debt collection ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¦ it could impact the ability of Australia casinos to collect outstanding debts.

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Wonder whether the nationalists in China's leadership will sell this as another opium outrage by westerners on the Chinese? I mean, just as it seems to be generally accepted that there was not already a drug culture in China before the Brits decided to exploit it, Pres Xi may well argue that up until the westerners got involved there was not a gambling problem in the middle earth. :rolleyes:


From a personal perspective I do think these gambling outfits are no better than drug cartels - both social drugs and gambling need to be regulated, but heavily - but nonetheless hopefully the Chinese leadership do not use the foreigners as scapegoats ...

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  • 8 months later...

Analysts and fund managers are apparently considering CWN's next steps.


Citi has, according to AFR, run numbers on a hypothetical Crown Resorts/Star tie-up.


The analysts said such a tie-up had some merit including enhanced operating scale and geographic expansion for Crown, and could see $85 million to $135 million in annual synergies.


"Hypothetically, if we assume an all cash offer from CWN to SGR shareholders, we estimate c5% EPS accretion in year one and c19-22% accretion and 1.6-1.7x net debt to EBITDA gearing for the combined group in years two and three (extransaction costs)," Citi analysts told clients on Thursday morning.


The numbers were based on a $6.45 as share bid price for Star, which would be a 30 per cent premium to the last close, $110 million in annual synergies by year three, a deal funded with 40 per cent debt and 60 per cent equity, and a Crown equity offer at a 15 per cent discount.


Citi's target for CWN is $14.80


Read more: http://www.afr.com/street-talk/citi-runs-n...e#ixzz4mfktekAD


Both stocks are up slightly this morning





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  • 4 weeks later...
  • 2 months later...

Another company in the news today for all the wrong reasons - accordingly, SP's taken a hit - down 7% currently # $10.92/share


Crown Casino 'tampered with poker machines', whistleblowers allege

Tom Cowie, Fergus Hunter

Explosive allegations from whistleblowers that Crown Casino tampered with poker machines, ignored domestic violence and avoided money laundering tracking have been tabled in federal parliament.


The bombshell claims are made by three anonymous former staff at Crown in Melbourne in a 30-minute video interview, which was tabled in parliament by anti-pokies independent MP Andrew Wilkie.............



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  • 6 months later...

Another slap on the wrist? $300k fine for CWN probably amounts to "petty cash"?

Senior sources have told the ABC that the Victorian Commission for Gambling and Liquor Regulation is set to announce the penalty for Crown as early as Friday.


It is understood the penalty could be as high as $300,000 and will also include a letter of censure, and require Crown to operate in an updated compliance framework.


The penalty is likely to be criticised by gambling reformers as too weak ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâہ¡ÃƒÆ’‚ for the first half of this financial year, Crown Melbourne enjoyed more than $1.1 billion in revenue.



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  • 11 months later...

SP currently up 19.68% @ $14.05 on this news



MELBOURNE: Crown Resorts Limited (ASX: CWN) (Crown) notes media reports about Wynn Resorts,

Limited (Wynn) putting a confidential takeover proposal to Crown.


Crown confirms that it is in confidential discussions with Wynn regarding a potential change of control

transaction following approaches to Crown by Wynn.


The proposal contemplates an acquisition of Crown by Wynn via scheme of arrangement for a combination

of cash and Wynn shares.


The proposal currently contemplates acquisition consideration (50% cash and 50% Wynn shares) with an

implied value of A$14.75 per share with the exchange ratio being fixed, using a volume weighted average

price for Wynn shares, immediately prior to the announcement of an agreed transaction. At the date of the

proposal, the volume weighted average price of Wynn shares implied an exchange ratio of 0.042 Wynn

shares per Crown share. The terms of the consideration are yet to be agreed.


The proposal is subject to a number of conditions including due diligence, Wynn obtaining all necessary

regulatory approvals and a recommendation by the Crown Board. It is stated to be preliminary, confidential,

non-binding and indicative.



The Crown Board has not yet considered the most recent proposal from Wynn.

The discussions between Crown and Wynn are at a preliminary stage and no agreement has been reached

between the parties in relation to the structure, value or terms of a transaction. There is no certainty that

these discussions will result in a transaction.


Goldman Sachs and UBS are acting as financial advisers and Ashurst as legal adviser to Crown.



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