Star Entertainment Group is well-positioned to attract foreign tourism and remains the better performing of Australia’s two dominant casino operators in VIP after stealing the mantle from long-time rival Crown.
So say Australian-based JP Morgan analysts Donald Carducci and Abhinay Jeggannagari in a new research note assessing the outlook for the local gaming industry in 2019.
While the VIP segment shows promise for both operators over the next 12 months – with Crown tipped to see 7.4% growth at flagship property Crown Melbourne and 5.4% in Perth compared to 4.8% for The Star Sydney and 1.4% for Star’s Queensland properties – JP Morgan believes the latter “remains the better performing Australian casino in VIP play” after overtaking Crown in the high-end segment over the past two years.
Once considered Crown’s little brother, Star booked VIP revenue of AU$826.7 million in FY18, up 51.8% year-on-year, compared with Crown’s AU$758.2 million at 38.2% growth.
The analysts also anticipate stronger all-round GGR growth for Star in 2019 with Sydney at 5.3% and Queensland at 3.0% compared with 2.6% for Crown Melbourne and 1.0% for Perth.
“Sovereign room refurbishments and loyalty programs will support growth at Star and recent comments from the AGM support main floor gaming growth,” Carducci and Jeggannagari said. “For Crown, main gaming floor revenue (excluding VIP) was down 0.6% in the AGM update and we estimate a subdued outlook for Crown Melbourne and Perth.”
Crown has fallen in Australia’s casino pecking order ever since the arrest of 19 employees in mainland China for promoting gambling in October 2016.
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