Crown Resorts has booked a huge loss in its half-yearly results following damning findings from the lengthy inquiry into the embattled gaming giant’s links to organised crime.
The company’s executive chairman Helen Coonan, who has taken the helm after chief executive Ken Barton resigned in the wake of the scandal, described the NSW gaming regulator’s report as “uncomfortable reading” but recognised the need for “immediate action”.
Crown now faces an urgent review of its gaming licences in Melbourne and Perth, where Asian high-roller junkets laundered huge amounts of money, according to the findings.
“Crown continues to work co-operatively with the Victorian and WA regulators as it works to restore public and regulatory confidence in its operations,” Ms Coonan said.
The net loss of $120.9m for the six months to December 31 represents a 155.4 per cent reversal of fortunes from the $218m net profit reported for the prior corresponding period.
Crown’s results showed statutory revenues plunged 62.1 per cent to $581m, with chief financial officer Alan McGregor saying it reflected the severe impact of the COVID-19 pandemic.
Crown Melbourne – the company’s largest revenue generator – was closed for most of the half year.
The venue progressively resumed operations from November but continued to be hit by ongoing capacity limits, Mr McGregor said.
But Crown Perth reopened towards the end of June and traded above expectations despite ongoing restrictions and limited marketing and promotion.
Both casinos, however, were shuttered again this month for snap lockdowns.
At the huge new $2.2bn Crown Sydney development, which has had its gaming licence revoked as a consequence of the damning Bergin inquiry, apartments have been sold, with more than $870m in gross sales and pre-sale commitments secured so far, Mr McGregor said.
The non-gaming aspects of the development – restaurants et cetera – opened in late December and “have seen encouraging property visitation”, he said.
Moody’s Investors Service analyst Maadhavi Barber said the results were credit negative, although cash about to come in from apartment sales was positive.
Still, the many risks to Crown’s gaming operations included a probe by financial crimes watchdog AUSTRAC, she noted, saying some of the remedial work planned by the company to address problems already identified by regulators “will be onerous”.
Meanwhile, pressure is mounting on Crown director Harold Mitchell to resign, but he is yet to succumb.
NSW Independent Liquor and Gaming Authority chair Phillip Crawford told 2GB radio: “We think he needs to move on.”
‘There’s an ongoing dialogue there … watch this space.”
Victoria’s gambling regulator is also investigating Mr Mitchell, who was found in 2019 to have breached his director’s duties while on the board of Tennis Australia.
The breaches were in connection with a 2013 decision to award the domestic television broadcast rights for the Australian Open tennis tournament to the Seven Network, earning him a $90,000 penalty in November.
Four directors, including Mr Barton, have quit so far, with nominees of Crown’s biggest shareholder James Packer expunged from the board.
The NSW inquiry was told Mr Packer was the driving force in the push to bring in more junkets and had a powerful influence on the company with “disastrous” consequences.
Mr Coonan said their decisions to exit had “helped to accelerate our plans for board renewal”.
“In addition, Mary Manos has today stepped down from her role as general counsel and company secretary of Crown with immediate effect,” the former Liberal senator announced on Thursday.
Ms Coonan said the inquiry findings were “an opportunity for a complete and comprehensive corporate reset”.
“We recognise the need for immediate and swift action, and I would like to reiterate my commitment to driving the necessary ‘root and branch’ change that is required,” she said.
Ms Coonan – who escaped largely unscathed from the inquiry but her reliance on the advice of Mr Barton was deemed “misplaced” – is being paid a further $1.8m per year after being elevated from chair to executive chair, bringing her total annual remuneration to $2.5m while in the role.