According to Morgan Stanley equity analyst Monique Rooney, VIP gamblers are returning to Australia in droves, with junket groups registering considerable increases in VIP volumes at Crown Melbourne and The Star in Sydney.
Crown Resorts had felt the pinch of the VIP exodus after 19 of its employees, including the head of VIP operations Jason O’Connor, were detained in China for “gambling crimes.” The Star was also hit by the VIP slump that plagued Crown.
But the good times are starting to roll again, according to a report in The Australian, as significant numbers of high rollers are returning to both gaming operators.
Part of the reason for the VIP comeback is the resolution of Crown case in China.
“Since the Crown detentions in October 2016, Australia’s share of the VIP market has halved from 6 percent to 3 percent as at 30 June 2017,” said Ms Rooney.
“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 the Australian VIP market.”
From a six percent fall, Morgan Stanley now is expecting Crown’s VIP business to increase 9.4 percent in 2018.
“With the market focusing on the weak domestic environment and not factoring much in the way of a recovery for VIP’s in 2018, we believe any rebound in growth would be taken positively,” Rooney said.
With this view in mind, the bank has upgraded VIP expectations for Crown Resorts, and to a lesser extent The Star Entertainment Group, given its decline in VIP in 2017 was less than its peers as it managed to take market share and grow South East Asian VIP revenues.
Sources: The Australian / Agb.com / Calvynayre.com