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· Posted on
February 21, 2024

Crown Resorts cops major losses after COVID cuts guests

Aussie billionaire James Packer's baby is having a tough time.

What's the key learning?

  • Crown Resorts is a hotel, casino and gaming chain worth around $6.31 billion
  • Covid forced Crown to shut shop, or limit capacity, dealing it a $261 million blow
  • Theoretical earnings measure the profit the casino would make off of each guest who comes in
  • It depends on how long a guest stays and plays, and how often they actually in - hence 'theoretical

Crown Resorts is Aussie billionaire James Packer's baby. The hotel, casino and gaming chain operates across Oz, the UK, the US and the Bahamas, and the whole biz is worth a huge $6.31 billion.

Crown has been killing it for a long time, but it's had a rocky road over the last 18 months. First, Aussie regulators are threatening to pull its casino license for dodgy gaming practices. Then, COVID forced casinos to shut shop or limit guests. 

As a result, Crown's seen a full-year net loss of $261 million. And its 'theoretical earnings' (dw we'll get to this in a sec) were just $242 million. Yiiikes.

So what's the key learning?

Theoretical earnings - aka theoretical wins - are a measure used in the casino industry to represent the profit the casino would make off of each guest who comes in.

It's called 'theoretical' because it depends on a few factors, like how long a guest stays and plays, or how often they actually win. The longer the gambling session, the closer the real earnings or win will be to the theoretical one.

Because Crown's doors have been shut or their capacity limited thanks to COVID, guests are spending less time gambling...Which means their theoretical earnings are taking a hit.

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