Crown’s casino in Sydney is expected to generate $100 million in additional tax revenue for the NSW government in its first year, just a quarter of what the Melbourne location provides to Victoria’s treasury.
Most important points:
- Crown was licensed to operate its Sydney casino earlier this week
- Experts say the casino will earn a quarter of what Crown Melbourne makes
- Crown predicts it will need to hire 2,000 more employees
Experts say the gambling floors in Sydney’s tallest skyscraper may not deliver as much as promised for the state’s economy, with its high-roller market decimated, unless it gets a major change in its operating license.
Crown Resorts was this week granted permission to operate its casino by the NSW Independent Liquor and Gaming Authority (ILGA), the same body that ruled in February 2020 that Crown was unfit to hold a gaming license after an investigation found it was a turned a blind eye to money laundering at its casinos in Melbourne and Perth.
Nevertheless, Crown continued in Sydney, opening its $2.2 billion building on Sydney Harbor in 2020 with hotel rooms and restaurants, but no casino.
Sixteen months later, ILGA granted Crown a provisional gambling license, just in time for the company’s official takeover on Friday by US private equity firm Blackstone.
Blackstone has yet to commit to an opening date for the casino, but NSW Treasury’s budget papers predict the government will bring in $231 million from casinos in the next fiscal year, a revenue stream that also includes Sydney’s Star Casino.
Gambling researcher Charles Livingstone of Monash University said Crown wouldn’t be the big tax incentive it could have been.
“The revenue we can expect to be generated by Crown Sydney over the next year would be approximately $500 million based on what the Treasury has estimated their share of tax revenues.
“That’s about a quarter of what Crown would earn in Melbourne in a good year.”
Crown Sydney will not be the international high-roller attraction promised when it was approved in 2013 by then Prime Minister Barry O’Farrell.
Not only has China stamped out international travel, but China has also issued edicts banning gambling in several jurisdictions, and while the destination blacklist is not public, experts strongly suspect that Australia falls under this list as well.
Macau-based casino analyst Ben Lee said Crown now needed to attract other customers from abroad, as well as from the country where gamblers are already served by existing casinos.
He believes that Crown cannot run a successful casino without poker machines – something the current license prohibits.
“Straight away, [pokies] are not allowed, but I bet they will lobby the government with any money to allow slot machines in Barangaroo.”
However, the opening of the casino is good news for local jobs as the company predicts it will hire 2,000 people in its restaurants, hotel and gambling floor.
When announcing the license, ILGA chairman Philip Crawford claimed the “new crown” was a vast improvement over the “old crown”, noting that the company had to “blow itself up to save itself”.
A handful of board members and senior executives resigned in the wake of the Bergin report and Mr Crawford said the organization had rebuilt its gambling policy from the ground up.
Blackstone has since bought Crown’s three Australian casinos, with ILGA confirming it had also done significant honest work on that company.
And billionaire James Packer has left the company, selling his 37 percent stake for $3.3 billion.
Announcing the Blackstone acquisition on Friday, Crown Resort Chief Executive Officer Steve McCann said the company has “endured a massive transformation”.
ILGA insists on controlling Crown’s business and reserves the right not to grant a full license after the Provisional Period if it violates any of the terms of its license.
A spokeswoman said Crown had agreed to the following:
- No interaction with junket operators
- Appointment of an independent monitor
- Requirement to conduct rigorous customer due diligence for both members and guests and monitor user accounts for criminal activity
- Due diligence on cash transactions above a certain threshold, including identifying the source of player funds.
Budget documents from the NSW Treasury show that the state still expects an overall increase in gambling tax revenues to $3.2 billion in 2022-23, mainly due to taxes earned from poker machines and in part due to higher taxes on online gambling. bets.
#Crowns #Sydney #Casino #bank #fraction #Melbourne #location