Crown Resorts Blames Regulatory Challenges, Compliance Costs for $199m Loss in FY2023

Summary:

• Crown Resorts reported a $199 million loss in FY2023 despite rising revenues
• Its profit was outweighed by billions in expenses stemming from fines and remediation costs
• Crown continues to implement compliance measures in a bid to win back trust with gaming regulators

Crown Resorts suffered a $199 million loss during the 2023 financial year as the Australian casino operator continues to deal with massive financial penalties and remediation costs after it was found unsuitable to hold a gaming license in all three Australian states where it operates.

Revenue Up But Expenses Hit $3 Billion

Crown managed to generate $2.7 billion in total revenue in 2022-23, up 44% from the previous financial year, but that profit was overshadowed by $3 billion in expenses, most of which accounted for regulatory fines and compliance measures across its three properties in Perth, Melbourne, and Sydney.

Nevertheless, the $199 million loss represents a major improvement on the near $1 billion loss that the operator suffered in the 2022 financial year when it faced major regulatory challenges along with the COVID-19 pandemic impact.

In documents filed with the Australian Securities and Investments Commission (ASIC) this week, Crown posted revenue growth for each of its three properties in the country. Revenue at Crown Melbourne climbed from $939 million to $1.4 billion in FY2023, with Crown Perth also generating $854 million, up 16% year-on-year. Crown Sydney, which launched its gaming venue in August of last year, also saw its revenue increase by 139% to $271 million.

In its latest financial report, Crown stated that it continued to face challenges regarding regulatory matters during the past financial year, with independent monitors appointed to oversee the gaming operations of all of its three properties.

Crown Making Significant Progress on Remediation

The silver lining in all of these is that the group has made “considerable progress” in relation to its remediation and transformation plan, leading to a significant uplift to the operations and culture of the business, a Crown spokesperson said.

Crown’s regulatory troubles are not yet over, as the company has been slapped with a record $450 million fine by the Federal Court back in July for serious breaches of anti-money laundering (AML) and counterterrorism laws at its Perth and Melbourne casinos.

The group has doubled its efforts to win back its gaming licenses, unveiling a new safer gambling program which includes the launch of a digital self-exclusion scheme for casinos and the creation of a dedicated gambling policy team.

Founded by Australian billionaire and investor James Packer, Crown was acquired by New York-based alternative asset management company Blackstone in June 2022 under an $8.87 billion deal.