Crown Resorts has registered an AU$945.4 million ($632.18 million) loss for its financial year (until June), mostly due to the company preparing some AU$617 million ($412.58 million) in preparation for expected fines due to the numerous inquiries into its casino operations.
The loss is a near four-fold increase from the AU$261.3 million ($174.73 million) loss registered in financial 2021.
The financial results are the first to be published by the group since its $8.9 billion takeover by US private equity firm Blackstone in June.
Despite the investigations ruling that Crown Resorts was unfit to run its casinos, authorities did not take the step of canceling its licenses in New South Wales, Victoria and Western Australia.
Aside from the money set aside to handle fines, a total of AU$145 million ($96.96 million) was funneled into additional staff, lawyer and consultant pay in order to bring the company into proper compliance following accusations of money laundering, organized crime via junkets and exploitation of problem gamblers.
The group says it has increased responsible gaming staff by nearly 80 percent in the past 18 months at Crown Melbourne, and more than doubled such staff at its other resorts.
The group was already fined AU$120 million ($80.26 million) in November over operational problems at its Crown Resorts Melbourne property – the largest fine the state’s casino watchdog had ever issued.
Fines in the states of NSW and WA are also anticipated to be high, with the states lifting their maximum casino-related penalties to AU$100 million ($66.88 million).
The group is also facing up to hundreds of millions in fines from the nation’s financial crimes watchdog, AUSTRAC.
Aside from the group’s legal woes, COVID-related lockdowns of its Perth, Sydney and Melbourne casinos last year contributed to its losses.
A Crown spokesperson told the media that Crown’s results embody the “challenging environment faced by Crown Resorts during the pandemic, with significant impact on our operations, particularly in the first half”.
Regarding the group’s regulatory issues the spokesperson noted that “these matters are ongoing, and we continue to cooperate with the relevant parties on resolutions”.
During the period the group’s revenue rose by some 26 percent yearly, to AU$1.9 billion ($1.27 billion), but operating earnings were negative AU$699.9 million ($468.14 million).
According to the group’s results, Crown Melbourne recorded revenue of AU$923.8 million ($617.9 million), a strong increase from the AU$567.5 million ($379.6 million) in the previous year, while Crown Resorts Sydney revenue rose to AU$113 million ($75.58 million).
The new figures did not take into account the opening of its high-roller gaming room at the AU$2.2 billion Barangaroo tower in Sydney. Rival group The Star had previously reported that Crown’s VIP operations across the river in Sydney had begun to eat into its earnings.
Regarding Crown Perth, the group saw saw a slight drop in revenue, to AU$731 million ($488.99 million) from AU$740.9 million the previous year ($495.61 million).