Monday, August 15, 2022
Sunday, August 14, 2022
Blog: High rollers still on the menu as Crown and Star lock horns
High rollers still on the menu as Crown and Star lock horns
After a decade of drama, Sydney finally has two casinos vying for its gambling dollar - separated by the barest sliver of a harbour.
Crown Resorts and Star Entertainment Group have been put through the regulatory ringer, many would say belatedly, for their shoddy approach to compliance. But suitably chastened, both are now ready to go toe-to-toe in their pursuit for punters.
However, as Crown Sydney’s marketing brochures highlight, the multibillion-dollar resort dreamed up by billionaire James Packer is staying true to its promise of focusing on high rollers. There is no enticement for the grind market, which is the staple of The Star and the poker machine dens across Sydney.
A $10,500 bar tab is the sort of spend needed to get a punter through Crown Sydney’s VIP gaming room doors at Barangaroo, which opened for the first time this week. This figure is based on Crown’s rewards program for Barangaroo which, ironically, does not specify how much gambling is needed to reach the Gold and Platinum status needed to gain entry to its gaming facilities.
One thing is clear, Crown clearly does not have to worry about the “RSL on steroids” tag, which dogged The Star for years.
Crown, under the new ownership of US private equity group Blackstone, has also remained faithful to Packer’s mantra that the gaming operation - which was originally due to open alongside the hotel in December 2020 - remains central to the economic feasibility of the entire resort.
“Crown Sydney is quite a unique facility and integrated resort. I think that integrated nature will also extend itself to the integrated nature of income,” Crown Sydney chief executive Simon McGrath said.
“It’s got a very good balance of gaming, hospitality, restaurants, bars and spas and other facilities. And I think that’s really important.”
Barangaroo needs to be firing on all cylinders. Blackstone paid $8.9 billion for the entire Crown operation in Australia, a price that took the casino operator back to a valuation that pre-dated the scandals and a regulatory nightmare that has seen it deemed unfit to hold a casino licence in all three states in which it operates.
The inquiries were triggered by a series of reports by The Sydney Morning Herald, The Age and 60 Minutes in 2019 that examined Crown’s irresponsible treatment of problem gamblers and its relationship with high-roller “junket” operators linked to powerful Asian criminal gangs.
The regulatory upheaval, which is still impacting both Crown and Star, is another unwelcome juggle for the newly opened facility.
“First, and foremost, we’ve got to make sure that we deliver safe and responsible gaming, and then we deliver the curated experience of luxury service,” McGrath says. “I think the combination of both those will give us a strong and sustainable business going forward.”
Also making life tougher is the fact that the disgraced junket operators, which did the dirty work of attracting Chinese high rollers, and extracting the cash when they lost - for a significant fee - have been banned.
But Crown’s new operation offered a not-so-subtle hint that Chinese gamblers are still on the radar with its opening date 08.08.22: eight is the luckiest number in Chinese culture with its traditional association with wealth.
Whether it succeeds in wooing them will be clearer in October when its exclusive high-roller floor opens.
To enter the hallways of Barangaroo’s Mahogany room - which houses 30 private salons for the serious high-rollers that Crown once enticed with its own private jets - a minimum spend of $45,000 across its bars, restaurants and hotel is needed to attain the Platinum status necessary for entry. Once again, Crown’s brochures do not specify the level of gambling spend needed for Platinum status.
Of course, the serious high rollers will be offered the Black tier membership which is by invite only.
Market analysts no longer track Crown as it is a private company, but in December last year, Macquarie forecast that Barangaroo could end up with 35 per cent of Sydney’s tables-based gambling market by the 2025 financial year. This is expected to be worth $923 million. Macquarie forecast VIP turnover of $10 billion by 2025.
Meanwhile, analyst reports focused on the ASX-listed Star following a July market update highlighted that poker machine and non-gambling revenue, across its Sydney and Queensland casinos, have soared above pre-COVID levels. Table gaming revenue, which is all Crown is relying on in Sydney, remains subdued.
Crown will have 160 tables, plus 66 electronic tables operating across the Crystal Room and 30 private salons on the Mahogany floor. While Crown Sydney will ensure Star’s table gaming revenue does not recover in Sydney, Star does have a secret weapon that Crown cannot rely on: the grind market.
“In NSW, we note that Club electronic gaming machine (EGM) data to May-22 is consistent with Queensland, with profit per EGM running at 129 per cent of pre-COVIDlevels,” a report from Goldman Sachs said last month.
And as JP Morgan analyst Don Carducci pointed out in a recent research note, The Star has a lot at stake as it extracts roughly $115 million in EGM, or slot, revenue from its top-tier gamblers on top of what it gets from their table-based gaming.
“The slot support for Star cannot be overstated; approximately one-third of Sydney (VIP) revenues are linked to slot play,” he said.
A fund manager who watches the casino market closely, says Crown has had the edge with high rollers in Melbourne due to the assets it had at its disposal including golf, horse racing and the Grand Prix.
“They always attracted that tier one player and probably didn’t have to do as much as what Star needed to do to attract those players to this market,” the fund manager, who did not wish to be identified due to the sensitivities of the high roller business, said.
But high roller rooms are not where the big money is made.
“Crown had the advantage on that part of the business, but it’s worth remembering. It’s not the best part of the business,” he said.
“The grind, that’s where you make your margin. That’s 80 per cent of your profit.”
Monday, August 8, 2022
Blog Update: Crown Sydney, Australia opens under a close eye; Mixed response from great to concern depending upon what business and community sector
Crown Sydney, Australia opens under a close eye; Mixed response from great to concern depending upon what business and community sector
The NSW casino regulator has warned that its independent monitor installed to watch Crown’s Sydney casino will scrutinise every move Crown makes at the $2.2 billion Barangaroo tower when its high-roller gambling floor opens for the first time today.
As gaming group Crown's flagship skyscraper casino on Sydney Harbour finally opens its doors to VIP customers, anti-gambling groups are concerned about the harm caused by gambling.
Only Crown members and guests will be allowed to wager when the Crystal Room gaming floor opens on Monday, with patrons having to undergo comprehensive checks.
Crown had been prevented from opening the high-end casino in its $2.2 billion dining and hotel tower in Barangaroo for more than a year.
The opening was blocked after an inquiry led by former Supreme Court judge Patricia Bergin found Crown was not fit to operate a casino.
The inquiry heard evidence of foreign junket operators with likely organised crime links being allowed to do business through the casino.
The approval was finally granted earlier this year by the NSW Independent Liquor and Gaming Authority (LGA) for the members-only gaming facilities inside the upscale Barangaroo complex.
This week the NSW government will introduce legislation designed to improve transparency and accountability for casino operators and clamp down on organised crime and money laundering risks.
The centrepiece of the reform will be the establishment of the NSW Independent Casino Commission, which will have enhanced and wide-ranging compliance and enforcement powers likely to extend beyond the existing powers of the existing authority.
Casinos will be banned from dealing with junket operators under the reforms.
The chief advocate of the Alliance for Gambling Reform, Tim Costello, said the Royal Commission into Crown Casino Melbourne exposed a pattern of predatory behaviour that caused great harm.
"Gambling harm was front and centre of the inquiry, it was clear that Crown failed to protect people and instead systematically sought to exploit them," he said in a statement on Monday.
"With the opening of Crown Sydney, we hold deep concerns about the gambling harm its operations will cause, and we are fearful that the NSW government will not put in place strong enough measures to protect people, their families and communities across the state."
Wesley Mission general manager Jim Wackett said he had no confidence in Crown's commitment to minimising gambling harm.
"Crown Sydney is pitched as an 'exclusive high roller' venue, but with minimum table game bets starting from as low as $20, the casino will be accessible to many more people than they imply, increasing harm to the community," he said.
"It is just another example of why we can't trust Crown to administer their products in a way that protects the community.
"To be clear, there's nothing exclusive about gambling harm - it affects high rollers to everyday punters, and we see the full impact on individuals and families through the services we provide."
NCOSS chief executive Joanna Quilty said more needed to be done to address the scourge of gambling.
"Problem gambling destroys individuals, families and communities, and it's often the social services sector that is left to pick up the pieces," she said.
Crown's conditional period, which will run for 18 to 24 months, will allow the LGA to monitor changes made at Crown Sydney.
The once-listed Crown has been taken private by US investment firm Blackstone after a successful $8.9 billion takeover was ticked off in June.
Other
More than 18 months after the launch of non-gaming operations, Crown Resorts will open the casino at its AU$2.2 billion (US$1.6 billion) Crown Sydney development today.
The VIP-only casino will set over two high-end VIP gaming rooms – the Crystal Room and Mahogany Room – with 12 additional exclusive private Sky Salons located on levels 28 and 29. The facilities feature approximately 160 gaming tables and 70 electronic table games, as well as premium dining options and outdoor terrace areas for members.
However, only the Crystal Room will welcome guests today with Mahogany Room to open at a later date.
The long-waited launch of Crown Sydney’s casino comes some time after non-gaming operations commenced in December 2020, with Crown Resorts having been found unsuitable to hold a NSW casino license following the Bergin inquiry.
The company since undergone a substantial corporate makeover, prompting the NSW Liquor and Gambling Authority to recently issue Crown with a conditional license which it said would give the regulator additional time to monitor the final phase of Crown’s restricted gaming licence suitability assessment.
Crown Sydney CEO Simon McGrath said the property’s casino “sets a new standard in luxury and elegance – from the design of the room to the overall member experience. The salon floors are flooded with natural light to highlight our unparalleled waterfront views, while the finishes and furnishings are of the highest quality and standard.”
News
‘Huge step forward’: Government clears way for The Star Sydney’s luxury tower
The Star Sydney is gearing up for the development of a six-star Pyrmont hotel and entertainment precinct after the NSW Government last week cleared the way for the proposed site.
As part of a 20-year framework to revitalise the Pyrmont area and drive visitation, the state government has made changes to planning rules that will allow The Star to enter a development application and approvals process to build a 105-metre hotel, new theatres and a rooftop dining area.
The Star Sydney’s recently-appointed CEO, Scott Wharton, welcomed the decision saying it supports The Star’s ambition to become ‘Australia’s leading tourism and entertainment destination’.
“It represents a huge step forward to eventually realising what have been long held ambitions to increase our tourism and entertainment offerings while creating jobs and delivering other significant economic and community benefits,” Wharton said in a post on Linkedin.
“This means that The Star could in the future with the necessary approvals add a new luxury hotel – it would be the property’s fourth – to its suite of award-wining accommodation offerings, expand its dining portfolio with rooftop dining experiences and additional theatres to complement the Sydney Lyric Theatre.”
Wharton believes that the addition of these new entertainment venues will draw more visitors to the city and help support the arts industry’s COVID recovery.
“Not only would a buzzing theatre precinct such as this be a wonderful asset for Sydney, attracting both international and local productions and advancing the city’s vibrant arts and culture scene, it would also act as a catalyst to create more jobs and further support the state’s tourism sector,” he said.
In 2020, The Star’s hotel proposal was evaluated to be aligned with the strategic intent of the Pyrmont Peninsula Place Strategy, subject to certain requirements, including a maximum height of 105 metres so that it would not overshadow public and open spaces.
During public consultation, government found that business and industry groups mostly supported The Star’s hotel proposal and the economic opportunities it could bring, while many residents and community groups objected due to concerns around building height, overshadowing and wind impacts.
On announcing the planning changes that will facilitate four major sites within the Pyrmont Peninsula, NSW Planning Minister Anthony Roberts recognised the ‘significant potential’ of the area and the economic opportunities that lie ahead as a result of new developments.
“We’re giving industry and the community the certainty they need to bring to life incredible new assets, including an Indigenous residential college at the University of Technology Sydney, and The Star’s planned six-star hotel which will be located next to a proposed new theatre, as well as new dining and retail spaces,” said Roberts.
“This milestone means we have completed the first stage of implementing our 20-year strategy, which aims to unlock 23,000 new jobs and 4,000 new homes for the area.”
The planning changes also support the introduction of two sites for the new Sydney Metro Station, one of which includes an integrated tower.
The Star is currently awaiting the findings from the Bell Review, an independent review of processes at The Star Casino, which are expected next month. The review considers how effectively The Star is complying with its statutory obligations and whether it remains suitable to hold a casino licence.
(Hotel Management)
Wednesday, August 3, 2022
Blog news: Crown’s Sydney casino to open next month
Crown’s Sydney casino to open next month
The Crown gaming empire’s flagship skyscraper on Sydney Harbour will open its luxury casino in two weeks.
“The doors to Australia’s only VIP casino will begin opening to members and guests from 08.08.2022,” Crown said in a statement on Monday.
Crown had been prevented from opening the casino in its $2.2 billion dining and hotel tower in Barangaroo for more than a year.
The opening was delayed and then blocked after an inquiry led by former Supreme Court judge Patricia Bergin found Crown was not fit to operate a casino.
Last month the troubled gambling behemoth was given approval by the NSW Independent Liquor & Gaming Authority for the members-only gaming facilities inside the upscale Barangaroo complex to finally open on a conditional basis.
The conditional period, which will run for 18 to 24 months, will allow the authority to monitor changes made at Crown Sydney and ensure they are “embedded” in the business.
“The opening of our gaming operations at Crown Sydney is a defining moment for Crown, and the culmination of months of hard work from our dedicated team,” Crown Sydney CEO Simon McGrath said.
“The entire team at Crown Sydney has been preparing for this moment for a long time and we felt the symbolism of the 08.08 date represented ideal timing to open our doors.”
The number eight is believed to be the luckiest number in China because eight is associated with wealth.
LGA chair Philip Crawford said last month the Bergin inquiry highlighted the scale and scope of issues to be remedied by Crown, with potentially billions of dollars having been laundered through its casinos.
“With a complete clean-out of the board and senior executive, Crown has made significant progress and has agreed to ongoing work to regain its casino licence,” he said in a statement.
Crown says its gaming operations are set “over two luxurious VIP gaming floors – Crystal Room and Mahogany Room – with 12 additional exclusive private Sky Salons located on levels 28 and 29”.
The facilities accommodate approximately 160 gaming tables and 70 electronic table games.
The Crystal Room gaming floor will open on day one, with Mahogany Room set to open at a later date.
“We are committed to delivering a safe and responsible gaming environment for all, and Crown Sydney’s restricted gaming facility has been designed with the highest levels of governance and compliance,” Mr McGrath said.
All patrons are required to be a member or guest of a member and undergo comprehensive checks.
“The gaming floors at Crown Sydney set a new standard in luxury and elegance,” Mr McGrath said.
The once-listed Crown is being taken private by US investment firm Blackstone after a successful $8.9 billion takeover was ticked off last month.
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