Right now, Crown Resorts looks to be one of the best all-around casino investments in the world. I can find little reason not buy this company right now. The fiscal conservatives are running hog wild at Crown, if fiscal conservatives could even be described as running like wild hogs, which they probably can’t. It’s balance sheet is as strong as it possibly can be, it isn’t chasing dreams but rather shoring up its core assets, it’s dividend is through the roof, its stock is cheap, and Australia is a stable jurisdiction where government is more or less predictable compared to, say, China.
The only bad news out of Crown is actually good news for investors. The mass arrest of many of its executives in China is still a lingering embarrassment and scaring away new shareholders. A new scandal involving allegedly rigged poker machines is making the rounds, but Crown has challenged the MP involved in exposing the claim, Andrew Wilkie, to release any evidence he does have to the relevant authorities. This means either there is no evidence, or that Crown can easily hide the evidence or already has done so. If some sort of software was used to rig the machines and encourage certain betting patterns over others, the software could be easily removed at a moment’s notice.
I’m not saying that Crown actually did this or is hiding anything, but merely that they wouldn’t have challenged an MP to release evidence to the authorities if they thought he actually had any or could get his hand on it. Ultimately, most likely nothing will come of these accusations and they will be forgotten, with the advantage to investors being some artificial and short term bearish sentiment from the news to acquire stock more cheaply.
The other artificially bearish news is that Crown will not probably not be pursuing expansion into Japan, at least for now. Foregoing Japan has some people comparing Crown to Caesars when it decided not to expand into Macau. I believe the comparison is unfair because Caesars was in tremendous debt at the time, and Crown is not. Besides, Crown’s reasons for foregoing Japan for the near future makes sense.