Crown Resorts ‘picking up’ after gaming reforms, cutbacks and hefty fines

Crown Resorts‘ departing boss has revealed a major pick-up in the casino company’s fortunes after bedding down gaming reforms and emerging from a $200 million repair program forced on it by regulators.

Ciaran Carruthers, who is set to depart Crown by the end of the year after stepping down as chief executive in August, told an Asian gaming website that the group’s margins “had greater than doubled ... across the business”, despite cost-of-living pressures weighing on discretionary spending.

He says that trading at its flagship Melbourne casino has picked up after disruptions linked to the implementation of responsible gaming reforms in December and the group is finally free to focus on running its integrated resorts, having overhauled its culture and its compliance systems and cut back job numbers.

“As we’ve gone through this restructure, through the COVID years and coming out of the Royal Commissions to a really challenged economy, a lot of additional costs have been baked into the business, so the financial performance has not been there,” Mr Carruthers told the Macau-based Inside Asian Gaming website.

“Now, despite the weak economy, we’ve greater than doubled the margin,” he said.

“People are starting to see the numbers come through. We’re nowhere near where we need to be, but we can see the pathway, we’re making progress, and we can see the direction ahead.”

Crown, which also operates casinos in Sydney and Perth, has yet to disclose its 2024 financial year results after recording a $166m loss last year that was heavily influenced by regulatory fines and the costs of the remediation program.

Crown’s owner, US private equity giant Blackstone, recruited Mr Carruthers in 2022 from the huge Wynn Macau gaming and hotels complex, where he was chief operating officer, to lead the group’s rehabilitation after inquiries found it was unfit to hold its casino licences in Melbourne, Sydney and Perth.

The probes in NSW, Victoria and WA found Crown breached anti-money laundering and counter-terrorism laws, citing “disgraceful” conduct that was deemed “variously illegal, dishonest, unethical and exploitative”. The group was forced to accept the supervision of outside monitors to survive and has since paid $700m in fines.

Mr Carruthers stepped back from Crown in late August, telling staff that with “the work of rebuilding” the former James Packer company was “well under way” and it was time to pursue other interests.

He told Inside Asian Gaming that the introduction of mandatory carded play for its 2600 poker machines in December lost Crown Melbourne about 13 per cent of its “foot traffic and slightly more in business volume”.

“Some of that business returned because we have so much more to offer than just the machines, in terms of bars, restaurants and entertainment,” he said.

However, “it had a material impact on the business, and while that has softened, we’re still below where we were, even in the roll-out to mandatory carded play, let alone where we were in 2019 (before COVID)”.

Mr Carruthers said the costs associated with the gaming reforms and the upgraded systems to ensure compliance with anti-money laundering and terrorism financing laws “obviously impacts margins”.

“But we’re seeing improvement with the restructure of our cost base that’s been rolled out over the last six to nine months ... and there’s still room for (more).”

Crown is being run by its former Perth boss, chief operating officer David Tsai, on an interim basis while Blackstone looks for a permanent replacement for Mr Carruthers.