Fitch places Crown under negative ratings watch

The ratings agency has downgraded the operator again, fearing it could be hit by to fines or other sanctions from regulators in various states.

Australia.- Crown Resorts’ financial rating has been downgraded again by Fitch Ratings after the New South Wales’ (NSW) Independent Liquor & Gaming Authority delayed the opening of its new casino until February 2021.

Fitch already gave Crown a negative outlook after the regulator requested Crown delay the opening of its new casino in Sydney, which had been set for December 14.

But the agency has now placed Crown Resorts ‘BBB’ Long-Term Issuer Default Rating (IDR) and senior unsecured rating on Rating Watch Negative (RWN).

The agency fears the Victorian Commission for Gambling and Liquor Regulation might also take measures against Crown, and that the West Australian Gaming and Wagering Commission might look into its licence for its casino in Perth.

Fitch said: “The RWN reflects Fitch’s opinion that these actions highlight an increased risk of severe regulatory action being taken by ILGA, including a loss of licence, and have heightened the potential for further regulatory action by the Victorian and Western Australian regulators that would have a significant impact on the company’s business or financial profile, which would lead to Fitch downgrading Crown’s ratings.

“Fitch will resolve the Rating Watch once we can assess the outcomes of the various regulatory inquiries and their impact on Crown’s ongoing operations and financial profile.”

In case sanctions are applied, Fitch foresees that the operator would be able to absorb around AUD800m (US$587m) in fines and penalties.

Fitch is expecting revenue at Crown to decline by around 30 per cent next year due to ongoing pandemic-related restrictions.

However, the agency believes revenue will also almost double in 2022 and return to pre-pandemic levels the following year.