From Kris Sayce – Port Phillip Insider (Australia) –
It’s no wonder the stock is taking a beating.
But it’s also a good reminder that, while Crown’s main casino and gaming operations may be in Australia, it’s really an export business. An export business that relies on cashed-up Chinese gamblers coming to Australia.
Or more precisely, an export business that relies on the Chinese government allowing Chinese gamblers to come to Australia.
Investors shouldn’t forget that. For all the talk about China becoming a more market-based economy, its government still wants to make sure that everyone knows who’s in charge.
Remember, this is regulation China-style. The Chinese have their own way of dealing with things. In the US, the Securities & Exchange Commission (SEC) files a lawsuit and then settles for a few hundred million, or a billion…or 12 (just as Deutsche Bank).
But, then, the US government is in a different position to the Chinese government. The US government needs cash. So it thinks nothing of good old-fashioned extortion – ‘Pay up and we’ll leave you alone.’