Fitch Ratings Gives Negative Outlook To Crown Resorts

Fitch Ratings has given a negative outlook to Australian casino giant Crown Resorts because of a weaknesses in the governance system of Crown that were revealed during an investigation in New South Wales, as well as the risks to Crown’s operations and financial profile from possible outcomes of the various investigations, which may include fines, adjustments in operating conditions and regulations, or adjustments to or losses to

Currently, the operator is the target of an investigation by the NSW Independent Liquor & Gaming Authority into suspected links with criminal organisations and possible anti-money laundering violations through its junket operations from China.

Fitch stated: “Under our base case, Crown would be able to absorb around AU$800m in fines and penalties such that its financial profile remained consistent with its rating. If this were to materialise, it would be among the largest fines imposed on a corporate in Australia. Alternatively, the most severe regulatory action would be loss of licence. We believe there is low probability of this event, and hence have captured the risks under the Negative Outlook.”

It added: “We believe Crown’s Melbourne and Perth properties, which accounted for over 90 per cent of revenue since FY18, will continue to benefit from predictable local markets and Crown’s position as each region’s sole licensed casino operator.

“Border restrictions in place to combat COVID-19 will see VIP revenues remain low over the foreseeable future. Nevertheless, this volatility has a minimal effect on the group’s overall results, because VIP revenue made up less than 25 per cent of normalised group revenues from FY16.”