In the era where almost every business is embarking upon the exceptional breakthroughs in the technology and complying with the complex regulations, are the casino operators arriving late?
Online Wagering Growing Fast
Casino and gambling industry, currently one of the most highly regulated and supervised industries in Australia, requires its constituent businesses to comply with numerous statutes. The industry has witnessed a drastic change in the ways of conducting the business with the evolution of digital technologies.
According to a report by the Department of Social Services (DSS), Australia, online wagering is the fastest growing gambling segment, with annual gambling of over $1.4 billion through online channels. In addition to this, it was noted that the Australian government is losing its tax revenues with the losses through betting in illegal offshore sites ranging between $64 million to $400 million annually.
In order to regulate interactive gambling services in Australia, the Australian government enacted the Interactive Gambling Act 2001 (IGA). To combat illegal offshore gambling, the government makes amendments to the provisions of IGA. The government focuses on stronger implementation and disruption actions, plus the nationwide operative consumer protection statutes.
Interactive gambling refers to the gambling services where the services are provided through the internet.
With the licensing of wagering services by the Australian government, a consumer automatically obtains consumer protection gains as soon as he chooses a service provider that is licensed by an Australian state or territory.
According to a report by the Victorian Commission for Gambling and Liquor Regulation, released on 26 July 2019, $2.699 billion was lost in Victoria at the pokies between 1 July 2018 to 30 June 2019. The loss figure represents 0.13 per cent of increase in losses from pokies as compared to the year 2017-2018. Moreover, an amount of approximately $3.4 million is stated as the increase in losses from pokies for the period 2017-2018.
New Rules to the Table
The Chief Executive of the Victorian Responsible Gambling Foundation says:
“Providing individuals with easily accessible tools and information to monitor and manage their gambling are important steps in reducing and preventing gambling harm”
Adding further, the stiffening rules for online betting operators comprise of betting account deposit limits, restrictions on direct marketing and a ban on perks that influence consumers to bet more. These rules have been made effective from 26 May 2019 for online betting operators with an objective to deliver stronger consumer protections for online gamblers.
The gambling business is increasingly shifting towards apps and websites thereby luring the customers with convenience. This further calls for the attention of the regulatory authorities to adopt new rules which are in sync with technological advancements. Moreover, the increase in online gambling through multiple platforms has impacted the offline and traditional way of conducting casino and gambling business.
Recently, Crown Resorts Limited experienced a significant decline in its operative revenues. However, Crown is confident that it is in compliance with the stringent policies and regulations that are being introduced by the regulatory bodies.
Let’s throw some light on Crown’s recent engagements.
Crown Resorts Limited (ASX: CWN)
Being one of Australia’s largest entertainment groups, Crown Resorts Limited (ASX: CWN) operates to provide tourism, employment, training and its corporate responsibility programs to make a significant contribution to the economy of Australia.
Crown Melbourne is said to be a tourist iconic destination in the country and is also the largest private sector single-site company in Victoria and WA with ~ 18,500 people functioning in over 700 diverse roles.
Crown’s business includes Crown Melbourne, Crown Perth, Crown Sydney (yet to be operative), One Queensbridge Development Site (50% interest), Crown Aspinalls (50% interest), Nobu (20% interest), Betfair Australasia (100% owned), DGN Games (85% owned) and Chill Gaming (50/50 JV).
CWN’s investment of $1.1 billion
Over the period of last five years, Crown has made a significant investment of over $1.1 billion into its Melbourne and Perth properties to keep them internationally competitive. As per company reports, Crown Melbourne and Crown Perth attracted over 32 million visits in the previous financial year. The tremendous number of visits put them amongst Australia’s most visited tourist attractions.
Crown recently announced its trading update for the period of 1 July 2019 to 20 October 2019. As per the report, tough trading circumstances in the international VIP market have impacted Crown’s VIP program play turnover. VIP program play turnover witnessed a decrease of 46% on the pcp.
The revenue from wagering and online social gaming for Crown reduced by 4% as compared to the previous period as a result of reduced revenues from Betfair Australasia and DGN.
Crown believes that recent media reported sensationalist and unproven claims against its business, with many bringing into spotlight the allegations dating back to over five years.
As a part of one of the most highly regulated and supervised industries in Australia, Crown administers more than 100 different pieces of legislation, regulations and government authorised policies.
Addressing the shareholders, Crown’s Chairman said:
“We have a strong record of cooperation with law enforcement bodies and regulators. Last year Crown received and responded to over 2,200 requests for information and footage from Commonwealth and State based agencies to assist in their investigations”
As a part of key areas of focus for this financial year 2020, Crown is continuing to work towards improving the underlying performance of its resorts. Crown believes that through the management of costs as well as investments, the top line performance can be restored in Melbourne and Perth.
Crown’s Executive Chairman, John Alexander says,
“There are a range of projects being undertaken which have been designed to drive revenue growth. This includes investment into new premium gaming areas particularly, at Crown Melbourne. We are also continuing to invest in new gaming product, as well as investigating ways to use technology to improve our marketing capability”
Crown already has a presence in online gaming through its three businesses, Betfair Australasia, DGN Games and Chill Gaming. These verticals focus on
- providing access for Australian and New Zealand customers to the world’s leading betting exchange;
- developing of online social games like Old Vegas Slots and Lucky Time Slots;
- innovating and developing new entertaining products;
CWN Stock up 55.8% in 10 years
On 25 October 2019, CWN’s stock is trading at a price of $ 12.200, down 0.41%, with a market capitalization of approximately $ 8.3 billion (2:07 PM AEST).
The stock has a 52 weeks high price of $ 14.370 and a 52 weeks low price of $ 11.010 with an average volume of ~ 1,525,971.
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