Investors are selling the company on more controversy.
The post Crown (ASX:CWN) share price slumps as problem gambler lawsuit heats up appeared first on The Motley Fool Australia. –
The Crown Resorts Ltd (ASX: CWN) share price is down as the company faces further legal troubles.
At the time of writing, shares in the casino operator are trading for $9.75 – down 1.61%. For context, the S&P/ASX 200 Index (ASX: XJO) is 0.99% lower. It comes after The Australian reported Crown had filed its defence in a nearly $5 million lawsuit brought by a former patron of the business.
Let’s take a closer look at the news.
Crown’s latest lawsuit
Today’s news may be unsettling investors, judging by the falling Crown share price.
Ahmed Hasna, a self-described problem gambler, is suing the $6.7 billion company for allegedly failing to act on his problem gambling at its Melbourne casino between the years 2016 and 2020. He claims he lost $4.59 million during those years – the amount he is suing to recuperate.
He also alleges the company were aware or should have been aware, of his addiction. In its defence, Crown calls the claim of observable problems in Hasna “vague and embarrassing”.
As The Australian reports, despite Hasna indefinitely self-excluding himself from the casino four times, Crown allegedly allowed him to revoke these bans while providing him with a flow of benefits to encourage his patronage such as free dinners, Phil Collins concert tickets and a family holiday to Crown’s Perth casino.
Crown’s general manager of VIP Customer Service, Peter Lawrence, told the Victorian Royal Commission – which looked at Hasna’s case as part of its examination into the suitability of Crown to retain its casino licence – that Crown’s treatment of Hasna was “possibly” predatory.
Crown denies it failed to take reasonable steps to offer Hasna help or inquire about his financial, mental and emotional wellbeing. It does concede it offered incentives to Hasna to continue gambling.
This latest headache for Crown comes while the Victorian Royal Commission is actively considering whether to rescind the company’s gaming licence in the state. While a blanket ban on Crown in the state is seen as unlikely, the damning evidence has seen heads roll at the company – including Chair Helen Coonan and Melbourne CEO Xavier Walsh.
The Crown share price has lost all of its gains since an initial takeover bid on the company because of the considerable uncertainty facing the company.
Crown share price snapshot
Over the past 12 months, the Crown share price has increased 6.67%. This is around 20 percentage points lower than the ASX 200. Year-to-date, shares in the company have fallen in value by 0.66%.
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Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.