The ratings agency Moody’s has downgraded Crown’s credit rating, just as a regulatory inquiry hears the gaming giant is unable to govern itself.
On Friday, Crown told the Australian Stock Exchange that as a result of Moody’s downgrade to Baa3, it will now face increased interest costs associated with its company notes.
But that’s just the latest problem facing Crown.
In a horror week for Crown, the NSW gaming regulator has also ruined the company’s hopes of opening its $2.2 billion Barangaroo casino in Sydney next month.
The regulator’s inquiry into Crown underway in Sydney has heard the company’s longstanding failure to investigate or admit to claims that money was laundered through its bank accounts is even worse than the money laundering itself.
“What it says is that this company is unable to govern itself,” counsel assisting, Scott Aspinall, said on Friday.
The latest episode shows Crown is not suitable to run the Barangaroo casino, Mr Aspinall argued.
Crown has been under investigation since reports in 2019 that it knowingly breached Chinese gaming laws, using Chinese junket operators with organised crime links and turning a blind eye to money laundering.
Several senior Crown staff were arrested in China in 2016.
More recently, Crown’s revenue has been under huge pressure in what Moody’s describes as a “cash burn”.
The company has endured the collapse of its Chinese high-roller market, while the pandemic has meant its Melbourne casino has closed for most of this year.
Moody’s analyst Maadhavi Barber says Crown’s rating is under further review.
He says the current investigations into the company could result in large fines or potentially even the loss of its gaming licences.
Crown shares lost ground on the ratings downgrade to close at about $9.34.