Crown casinos hit by China corruption crackdown

Crown in Melbourne Image copyright WILLIAM WEST
Image caption Crown Resorts was started in Melbourne and has since expanded to Sydney, Perth, London, Macau, Manila and Las Vegas.

A crackdown on corruption in China has prompted Australian casino operator Crown Resorts to spin off its international assets into a separate company.

The new company will take over Crown's 27.4% interest in two Macau businesses.

Macau is the world's largest gaming centre and the only place in China where casinos are allowed.

Its gaming revenues have been hurt by a slowdown in Chinese spending.

China's campaign against corruption and luxury spending began in late 2012 and has left officials and businesspeople from the mainland more wary of gaming and spending in Macau.

Crown said the demerger, which included a move away from interests in Las Vegas among others, would benefit shareholders.

Rob Rankin, chairman, said: "We believe that Crown Resorts' extremely high quality Australian resorts are not being fully valued and the Crown Resorts share price has been highly correlated to the performance of its investment in Macau."

Shares in Crown closed 13.2% higher at $12.75 in Sydney following the announcement, but were still flat over the past 12 months.

Image copyright Getty Images
Image caption James Packer quit as a director of Crown Resorts last December

Crown was founded by James Packer, who stepped down as a director last December. He is the son of the late Australian media mogul Kerry Packer.

James Packer still owns a 53% stake in Crown and said last year that he planned to focus on projects in Sydney, Melbourne and Las Vegas, as well as Crown's online gambling operations.

Crown's first casino was in Melbourne and has since expanded to Sydney, Perth, London, Macau, Manila and Las Vegas.

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