Australian Casino Operators Likely to Face Stricter Regulatory Checks, Says Fitch

  • Fitch Ratings released its What Investors Want to Know: Australian Gaming report on Friday
  • It highlights the fallout of investigations into Crown Resorts and the impact of the pandemic
  • Australia’s three main casino operators are all facing investigations by AUSTRAC
  • The report also notes the resurgence in casino profitability since the rolling back of restrictions
  • Casinos in parts of Australia have been closing in recent days following new virus outbreaks
Crown casino resort in Melbourne, Australia
A new report from Fitch Ratings predicts that Australian casino operators will face increasing regulatory checks in the coming years. [Image:]

Assessing the country’s gaming sector

Following a number of investigations into the actions of casino operators in Australia, a new Fitch Ratings report suggests that gambling businesses face increasing regulatory oversight and costs in the coming years.

The American credit rating agency published What Investors Want to Know: Australian Gaming on Friday. The report looks at all aspects of the country’s gaming scene, including the fallout from the actions of Crown Resorts in recent years, as well as the impact of the COVID-19 pandemic.

Crown Resorts was found to be unsuitable to hold a casino license for its property in Sydney, following a New South Wales (NSW) inquiry. It is also facing probes by Royal Commissions in both Western Australia and Victoria over its actions in these provinces. These latest investigations have already found issues regarding problem gambling and tax payments.

Increased oversight, compliance systems

Each of the three major casino operators in Australia is also facing scrutiny from the country’s financial crime watchdog, AUSTRAC. SkyCity Entertainment Group, Star Entertainment Group, and Crown Resorts are undergoing probes into possible anti-money laundering failings.

operators might even have to pay higher contributions as a result of additional monitoring

The Fitch Ratings report suggests that any disciplinary action resulting from these investigations will also be accompanied by further necessary investment in compliance systems, in addition to more regulatory checks. Operators might even have to pay higher contributions as a result of additional monitoring. For example, one of the recommendations of the Crown Resorts NSW inquiry report was the creation of a new gaming regulator, which casino operators would have to fund.

The report also indicates that certain aspects of the operators’ businesses might have to cease. This would hurt their overall ability to generate revenue, and potentially eat into profit margins.

One of the more optimistic aspects of the report is the belief that the lower VIP revenues off the back of junket bans will not likely have a long-term significant impact on Australian casinos, as most profits come from domestic gamblers. In relation to VIP players, Fitch said: “In particular, operators will find it difficult to cater to Chinese VIPs, as China prohibits the direct promotion of gaming activities and junkets are used to facilitate international play.”

Finally, the report notes that most casino properties have managed to return to profitability follow pandemic-related closures, despite restrictions.

The latest round of casino closures

With COVID-19 cases increasing in certain parts of Australia, closures are becoming an issue once more for casino operators. The Star Sydney casino resort closed on Friday night for at least a week following a new lockdown order in certain parts of New South Wales, including the City of Sydney.

The Western Australian government has also introduced new restrictions, which saw the Crown Perth casino resort limiting its operations from Sunday for at least three days. The gaming area has shut down until further notice, along with the bars and restaurants on the casino floor.

Crown Melbourne currently has capacity restrictions in place on its casino floor. These include a limit of 300 guests in a single indoor space, a distance of 1.5 meters between gaming machines, and seated service only.

Leave a Reply

Your email address will not be published. Required fields are marked *