Sydney’s Crown casino is expected to bring in an additional $100 million in tax revenue for the NSW government in its first year, just a quarter of what its Melbourne site brings in to the coffers of Victoria.
- Crown was granted a license to run its Sydney casino earlier this week
- Experts say the casino will make a quarter of what Crown Melbourne does
- Crown predicts it will need to hire 2,000 additional staff
Experts say the gambling floors of Sydney’s tallest skyscraper cannot deliver as much as promised to the state’s economy with its decimated high-roller market unless it benefits from 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 which in February 2020 ruled that Crown was unable to hold a casino license. game after an investigation revealed that he was turning a blind eye. money laundering in its Melbourne and Perth casinos.
Nonetheless, Crown has moved forward 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 an interim gaming license, just in time for the company’s formal takeover on Friday by US private equity firm Blackstone.
Blackstone has not yet committed to an opening date for the casino, but NSW Treasury budget documents predict the government will raise $231 million from casinos in the next financial year, a source of revenue which also includes Star Casino Sydney.
Charles Livingstone, a gambling researcher at Monash University, said Crown would not be the biggest boost it could have been for tax coffers.
“The revenue we can expect Crown Sydney to generate next year would be around $500 million based on what the Treasury has estimated as its share of the tax revenue.
“That’s about a quarter of what Crown in Melbourne would earn in a good year.”
Crown Sydney will not be the international high-roller attraction that was promised when it was endorsed by then Prime Minister Barry O’Farrell in 2013.
In addition to COVID wiping out international travel, China has issued executive orders banning gambling in several jurisdictions, and while the blacklist of destinations is not public, experts strongly suspect it includes Australia.
Macau-based casino analyst Ben Lee said Crown now needs to attract more customers from overseas, but also from within the country where players are already served by existing casinos.
He believes Crown cannot run a successful casino without poker machines, which its current license prohibits.
“At present, [pokies] are not allowed, but I’d bet any money they’ll lobby the government to be allowed to have slot machines in Barangaroo.”
The opening of the casino is good news for local jobs, however, with the company planning to hire 2,000 people at its restaurants, hotel and gaming hall.
Announcing the license, ILGA President Philip Crawford claimed the “new crown” was a big improvement on the “old crown”, noting that the company had to “blow itself up to save itself “.
A handful of board members and senior executives resigned following the Bergin report and Mr Crawford said the organization had rebuilt its gambling policies from scratch.
Blackstone has since bought Crown’s three Australian casinos, with ILGA confirming that it has also done significant probity work on the company.
And billionaire James Packer left the company, selling his 37% stake for $3.3 billion.
Announcing the takeover of Blackstone on Friday, Crown Resort CEO Steve McCann said the business had “undergone a huge transformation”.
ILGA insists that it will monitor Crown’s operations and reserves the right not to grant a full license after the interim period if it has breached any of the conditions of its licence.
A spokeswoman said Crown has agreed to abide by the following:
- Do not engage with junket operators
- Appointment of an independent monitor
- Obligation to undertake rigorous customer due diligence for members and guests and to monitor customer accounts for criminal activity
- Due diligence on cash transactions above a certain threshold, including identifying the source of player funds.
NSW Treasury budget documents show the state still expects an overall increase in gambling tax revenue to $3.2 billion in 2022-23, mainly from the tax levied on gambling machines. poker and partly to the increase in taxes on online betting.