PBL Closes Crown Online Casino

Sydney-based Publishing and Broadcasting Ltd. said today that it ceased its online gambling operation, CrownGames.com, as of Monday.

The company blames regulatory change in the global I-gaming environment and the site's poor financial performance.

"We have flagged at our past two results presentations that a review of our online gaming operations would be conducted prior to the end of this financial year," said Peter Yates, CEO of PBL. "We have formed the view that the business will not break even this financial year and is now unlikely to achieve the scale necessary for this business to contribute meaningfully to the group's profitability."

A note to players on the site states that the site was shut down at 6 a.m. on May 5. All players who were owed winnings or had money in their accounts would be repaid "very soon," the note also says.

The site also assures players that their personal and financial information will be destroyed and not given to a third party.

PBL's online gambling division did not contribute substantially to the company's profit, the company stated in a press release. For the half year ending Dec. 31, 2002, CrownGames suffered a loss of AU $5.6 million in EBITDA. During the same period, PBL as a whole recorded a net profit of AU $188 million.

A Q&A section on the Web site tells players that the reputation of the land-based Crown Casino, which is in Melbourne, might have been tinged by the Internet version.

"In many countries," the site states, "legislative amendments to gambling laws have created a very 'grey' area for online gaming and bookmaking. CrownGames, which draws from the prestige of Australia's largest and most prestigious casino--Melbourne's Crown Casino--was and is still not prepared to 'work around' the rules to be competitive."

CrownGames.com was licensed and regulated by Vanuatu, a country in the South Pacific that consists of 80 islands.

ABN Amro analyst Sean Monaghan was quoted in the Australian press as saying that PBL probably got out of the online gambling business just in time.

"It was easy money before and it was smart for them to try it," he said. "(But) the trend internationally is for governments to prohibit a lot of these activities, and I don't think the outlook is getting any better."

With CrownGames.com defunct, PBL is said to be concentrating on getting the Australian government to change its laws against interactive television betting, which is growing fast in the United Kingdom. Australia's lawmakers are in the midst of reviewing the Interactive Gambling Act of 2001, which prohibits companies from offering online gambling services to Australians.