The casino industry in Australia

The casino industry in Australia operates under an environment of uncertainty. According to the Australian Bureau of Statistics Australia†s 13 casinos recorded a total operating loss of $288 million in 97-98. Outsiders predict a gloomy future for the casino industry in the next few years due to the reduction in international high rollers and the low level of management talent in Australia†s young casino industry. In this business environment Crown must implement business strategies will carry it into the next century as one of the worlds most successful casino complexes. The Crown was set up as a multimillion-dollar establishment in order to attract international gamblers especially the Asian junket gamblers. However with the economic meltdown of countries such as Thailand, Indonesia, and Malaysia Asian gamblers are fewer and have less money to gamble. The present focus of Crown casino towards the Asian market is fruitless as its competing in a highly saturated international market. International casinos have a much better operational efficiency compared to Crown due to the high levels of tax and intense monitoring experienced by Australian casinos. Nevertheless this excessive regulation reduces the perception of corruption which can be used to market Crown as a reputable operator in the world stage. Its current strategy of focusing on the Asian market is an inefficient management of resources. Crown should focus on the growing local market, which would stabilise the balancesheet, as the focus should be on maintaining a high volume of local gamblers as opposed to a small number of high rollers. The current volatile earning figures for Crown are caused due its reliance on Asian junket gamblers. In the current business environment buyer power is high as Crown focuses on few high volume gamblers this should be reduced, as it should concentrate on a higher numbers of smaller gamblers. The recent increases in the gambling to HDI ratio as a result of better domestic economic conditions should be exploited by Crown. In order to broaden its local market advertising campaigns to lure the suburban poker machine players towards the city and away from RSL clubs and bars should be undertaken. The recent acquisition of Crown by the media giant PBL should ensure that Crown promotions reach a wider audience through the magazine/television business with little cost. The main issue for Crown in the future is to maintain a consistent rate of turn over in slot machines and tables. This should be achieved not only through advertising moreover by offering patrons the latest technologies and gaming programs. Once the parton numbers are increased loyalty schemes targeting the lower end of the gaming market should be under taken to maintain the flow of customers. Crown should better take advantage of it regional monopoly and reputation for offering ‘ world of entertainment† by hiring top rating international performers. This would not only boost revenue to the Crown entertainment complex but to the casino as well. Online gambling is luring more and more customers away from physical casinos. This new frontier of gaming is thriving due to its ease of access to customers and many online operators are benefiting from the lack of regulatory and tax burdens. This industry is expected to grow from $US5 billion to $US25.4 billion by next year. In Crown ‘s strategic outlook it should attempt to tap into this booming market. Crown would be able to use its globally recognised name and add credibility to this undisciplined market. With the cooperation of PBL namely ECORP its Internet Company Crown would be able to offer unrivalled Internet gambling services which are regulated by the Australian government. At present US based enterprises are unable to provide Internet gaming which would provide Crown with an opportune time to enter into this market and gain a foothold. (an operational efficiency.) The capacity exists for Crown to from strategic alliances with other off shore gambling facilities overseas in the hope of attracting more international gamblers. Such a venture could offer joint accommodation deals more lucrative jackpots and discounts to valued customers in reciprocal venues. This should compensate for Melbourne†s low level of International tourism. In addition relationships should be built up between Crown and the Victorian Tourism board to induce tourism into Melbourne. Michel Porter suggested that the ‘essence of strategy is choosing to perform activities differently than rivals do† in the current competitive environment Crown is able to do this by offering a complete package of entertainment and gaming which is unparalleled in Australia.