An ongoing battle
According to a new study, the Australian casino sector was the fifth worst-hit in terms of daily revenue loss during the COVID-19 shutdowns.
losing AU$14.2m (US$10.5m) on a daily basis
New research shows that Aussie casino properties were losing AU$14.2m (US$10.5m) on a daily basis during the pandemic closures, reports local network 9News. Nevada, representing the US, is at the top of the list, followed by the pachinko market in Japan and the casino sectors in Singapore and Canada.
Casinos across Australia are still dealing with the impact of COVID-19. Revenues have been lower owing to property closures, lower operating capacity, and decreasing visitor numbers.
Meanwhile, as retail properties remained closed for business, the use of online gambling platforms soared. National Australia Bank (NAB) transaction data from June shows that Australians were spending 62.7% more on internet gambling than for the same period in 2019.
Recent financial results
The Star Entertainment Group generated a loss of AU$95m (US$67.9m) in the 12 months ending June 30, 2020, with revenue falling 31% year-on-year. The closure of its Queensland and Sydney casinos during the pandemic was a major reason for this significant drop. In the period before the pandemic outbreak, revenue was still down 10% year-on-year, but the company generated profit of AU$67m (US$47.9m).
There are glimpses of a recovery, with domestic gaming revenue figures bouncing back since Star Entertainment properties began reopening in June and July.
glimpses of a recovery
For the same period, Crown Resorts’ net profit fell 80% from AU$401.8m (US$287.3m) down to AU$79.5m (US$56.8m), while revenue dropped by 25.7%. With extensive international travel restrictions in place, the casino company is hoping that domestic demand will somewhat make up for this shortfall of international visitors.
Lottery operator Tabcorp raising money
Also hit by the effects of COVID-19, Australian gaming and lotteries operator Tabcorp is looking to raise as much as AU$600m (US$429m) worth of new equity through an accelerated entitlement offer. It is looking to reduce its gross debt to EBITDA ratio as well as drop its target dividend payout ratio by 70%-80% amid ongoing uncertainty.
Total revenue for the company fell by 4.8% year-on-year to AU$5.22bn (US$3.73bn) for the financial year to June 30, alongside a net loss of AU$870m (US$622m). However, chief executive David Attenborough believes Tabcorp’s “diversified portfolio” will allow it to deal with the business challenges it is currently facing.