The Star Entertainment Group has seen its annual profits slip by more than 44 percent due to an “abnormally weak” house win rate.
However, despite the in-house win rate for its three Australian casinos being lower than expected, other areas of the business are flourishing according to the 2017-2018 annual report. Published on August 24, the financial review notes an improvement in pokie revenue as well as non-gaming profits.
VIPs Ante UP En Masse but Win More than Usual
The area showing the most promise, however, is the company’s VIP services. Following a drive to attract more high rollers to its venues, Star Entertainment has seen a 54 percent increase in VIP turnover during its recent accounting period.
As per the report, the money processed was $61.2 billion, while normalised gross revenue improved by 51.8 percent to $827 million. Those figures mean that Star Entertainment is now the number one destination for domestic and foreign high rollers.
Despite improvements across various sectors of the business, the operator’s overall profit was down because visiting high rollers enjoyed an unprecedented run of luck. Although it wasn’t the only reason for the fall, statutory net profit fell from $264.4 in 2016-2017 to $148 million because players were overcoming the odds.
Although players were “luckier” than usual, the company’s chief financial officer Chad Barton said the results were positive and house win rates were “higher” this financial year.
Aquis Entertainment in Choppy Waters
While Star Entertainment has reconfirmed its position among Australia’s gaming elite, Casino Canberra owner Aquis Entertainment has run into trouble. Following the news that H1 revenue for 2018 was down 3.6 percent to $12.3 million, the company announced the resignation of its CEO Jessica Mellor.
Citing “personal reasons” for the departure, Mellor will officially leave her post in February 2019. Although Aquis chairman Tony Fung praised Mellor’s work in turning around Casino Canberra’s fortunes since she became CEO in 2016, the latest losses would suggest the battle is far from over.
With a current building project yet to be approved, the operator is only able to offer 200 poker, compared to the 500 it expected to host when Aquis proposed a mass-redevelopment in 2016. Looking forward the company will look to appoint a new CEO as soon as possible as it continues to push for more pokie provisions.