In a decision that echoes through the Australian business landscape, Crown Resorts has finally secured approval to operate its Sydney casino. This long-awaited green light, granted on April 23rd, 2024, by the New South Wales Independent Casino Commission (NICC), signifies a turning point for the company.

However, the path to this point has been controversial, forcing Crown to undergo intense scrutiny and implement significant reforms. The approval will have significant implications, not only for the company but also for the broader Australian gambling industry and the local economy.

A Look Back at Crown’s Tumultuous Journey

Crown’s Sydney aspirations were initially met with enthusiasm. In 2013, the development of a $1.5 billion luxury resort with an integrated casino at Barangaroo, a prime location in Sydney Harbour, was approved.

However, the path to opening wasn’t smooth. In 2021, a devastating inquiry led by former judge Patricia Bergin, SC, exposed a series of concerning practices within Crown Resorts. The issue unearthed evidence of money laundering, irresponsible gambling practices, and connections to organized crime syndicates through the company’s dealings with high-roller junket operators.

These revelations sent shockwaves through the Australian public and regulatory bodies. Crown’s license for the Sydney casino was suspended, and its suitability to operate in New South Wales was called into question.

Regaining Trust

Faced with the potential loss of its Sydney venture, Crown embarked on a comprehensive reform program. The company underwent a leadership overhaul, with a complete restructuring of its board and senior management.

Furthermore, the organization focused on cultural change. It puts a high priority on responsible gambling, anti-money laundering, and strong governance. Crown also implemented stricter compliance protocols and risk management strategies.

This commitment to reform was further strengthened by a change in ownership. In June 2022, US private equity giant Blackstone acquired Crown Resorts for $8.9 billion. Blackstone, known for its focus on responsible investment, pledged to uphold the highest standards of governance and compliance. This commitment resonated well with regulators, demonstrating Crown’s dedication to reform.

What’s more, this shift brought in new leadership and significant investment. It includes $200 million specifically allocated to support responsible gambling initiatives and anti-financial crime initiatives.

Notably, Crown Sydney adopted cashless gaming for all electronic table games, a first for casinos in New South Wales. This demonstrated its commitment to addressing money laundering concerns.

A New Dawn for Crown

The NICC’s decision to grant Crown Sydney its license reflects confidence in the company’s reform efforts. However, the approval comes with a set of stringent conditions. The NICC will maintain close oversight, and Crown will be obligated to demonstrate ongoing adherence to new regulations and compliance protocols.

This period of conditional operation serves as a probationary phase. During this time, Crown must consistently prove its suitability as a responsible casino operator.

For the Australian gambling industry, Crown’s Sydney approval signifies a potential turning point. The industry has faced increased scrutiny in recent years, with calls for stricter regulations to curb problem gambling and enhance anti-money laundering measures.

Crown’s experience serves as a cautionary tale. It highlights the severe consequences of non-compliance and the importance of responsible practices. The industry will likely see a ripple effect with other gambling operators, including the online casino in Australia. They will re-evaluate their own internal controls and compliance measures to avoid a similar situation.

The economic impact of Crown Sydney’s opening is expected to be substantial. The casino complex is projected to create thousands of jobs and generate significant tax revenue for the New South Wales government. It should also contribute to the revival of Sydney’s tourism industry.

However, concerns remain regarding potential social costs associated with increased gambling activity. Measures to mitigate problem gambling addiction and ensure responsible practices will be crucial in the long run.

The Public’s Verdict: A Jury Still Out

While the green light for Crown Sydney signifies a step towards regulatory reconciliation, the court of public opinion remains in session. The controversies that engulfed Crown have left a deep scar on the company’s image. Regaining the public’s trust won’t be a quick fix; it will be a long and arduous process demanding sustained commitment from Crown.

Regaining trust requires more than just regulatory compliance. Crown needs to demonstrate a genuine commitment to responsible gambling practices. As part of this effort, it is important to implement effective player identification and monitoring systems as well as provide support services for problem gamblers. It should also encourage a culture that prioritizes player well-being over maximizing profits.

Transparency will be a key factor in this process. Open communication with the public about Crown’s reform efforts, including detailed information on implemented changes and their effectiveness, is crucial.

Crown should be proactive in engaging with stakeholders. This includes community groups, problem gambling organizations, and the media. Regularly publishing independent audits and reports on its compliance efforts would also demonstrate a commitment to transparency.

A Second Chance, a Continued Watch

The story of Crown Sydney goes beyond the fate of a single casino. It represents a critical moment for the Australian gambling industry. As Crown Sydney prepares to open its doors, the industry as a whole face a period of heightened scrutiny and potential reform.

Whether Crown can capitalize on this second chance and the industry can navigate a more responsible path remains to be seen. Only time will tell if the lessons learned from Crown’s tumultuous journey will lead to a more sustainable and responsible future for Australian gambling.

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Two years after Crown Resorts’ Melbourne property came under government review, and following the acquisition by Blackstone Group, the flagship casino has been deemed fit to retain its license and continue to operate, overcoming a difficult regulatory spell that necessitated strict government supervision because of breach of anti-money laundering laws.

VGCCC Pleased with Progress and Ongoing Efforts

Much of this is now in the past, with the Victorian Gambling and Casino Control Commission (VGCCC), a hardened regulator which emerged precisely because of omissions in the previous watchdog’s model, deeming the Crown Resorts property as suitable to carry on. The VGCCC allowed itself rare praise of the property, calling the “systematic failings” of Crown Melbourne a “thing of the past.”

But ongoing suitability will be significantly demonstrated by how Crown responds to instances of operational failure, not by their total absence.

VGCC chair Fran Thorn

VGCC chair Fran Thorn has spoken about the long process that the property and the regulator undertook to ensure that all regulatory benchmarks are met in full and conscientiously. Crown Resorts has confirmed that it will continue to work towards the betterment of its operations and achieving better sustainability.

“Over 10,000 pages of documentation have been submitted and 770 remediation activities have been delivered to our state regulators, fundamentally rebuilding our organization from the inside out,” Crown CEO Ciaran Carruthers said, indicating that the property has been actively working on clearing up its name.

Crown Resorts will also be paying $294 million worth of fines that have to do with the breaches of AML law, or some AU$450 million.

Too Big to Fail but Not Excused from Responsibility

Crown Melbourne is almost “too big to fail” as authorities seriously debated whether the property should lose its license altogether, but in the end, it was deemed that the adverse economic impact would only compound the matter. The property also remained vigilant over its name being misused by bad actors.

Crown Melbourne is the biggest private sector employer to operate out of a single location in the state, employing some 11,500 staff members, which gives it some bargaining leeway. Regardless, VGCCC’s attitude over the past two years suggested that the regulator would not have hesitated to pull the trigger if it had been forced to shutter the company’s license over non-compliance, however.

Recently, Crown Resorts conducted an internal investigation looking into alleged wrongdoings by CEO Carruthers who supposedly allowed patrons who were escorted out by security back in. These allegations proved false.

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Two 2023 police raids at Mt Lawley and Cloverdale gambling dens helped authorities seize almost $190,000 in cash, along with gambling cards and chips usually found at Monte Carlo casinos.

The two underground locations used for illegal gambling were allegedly run by a number of Crown Casino workers. 

The casino chips and blocks of cash will be destroyed as police efforts continue toward targeting more underground venues. 

$130,000 Seized from Mount Lawley

Last April, police raided a Mount Lawley business where it seized close to $130,000 from an alleged illegal game, along with tens of thousands of dollars worth of casino chips, a baccarat table cover, and gaming cards.

An ex-Crown Perth employee is believed to have allegedly recruited three additional dealers from the same casino and instructed them to run games that would allegedly target members of organized crime or problem gamblers.

All three dealers had their licenses canceled.

$60,000 Seized from Cloverdale Home Raid

At the end of 2023, during a raid on a Cloverdale home, police allegedly discovered 16 players who had been previously banned from the casino plus $60,000. 

The respective home was suspected of allegedly operating a game without a permit or license. 

A 35-year-old man pleaded guilty to money and property laundering.

While gambling activities in charities and clubs are permitted in Western Australia via a permit, police allege the respective operations did not have one.

“Eventually They’ll Pop Back Up”

According to Gaming and Regulation executive director Jennifer Shelton in an interview for 9News, these Australian criminal organizations that are targeting vulnerable individuals “who are then using it for other criminal gains” are currently laying low. 

However, Shelton is confident that “eventually they’ll pop back up either in the same location or same premises.” 

The director added that organizers were interested in targeting Crown Casino employees and recruiting both problem gamblers who are patrons at the facility, as well as dealers.

The vulnerable players are either self-excluded players or individuals who are no strangers to the world of organized crime or who have accumulated “unexplained wealth.”

At the start of the year, Crown Resorts revealed that illegal online gambling websites had been using their intellectual property to deceive consumers.

Police and Gaming Minister Paul Papalia issued a statement regarding the events, saying the tighter supervision, casino monitoring, and organized crime prevention in casinos will get, the more likely we are to see people “try and get around it.”

Gambling is considered a serious public health risk in the context of hundreds of millions being lost to the activity each month. 

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Crown Resorts urged the community to exercise caution regarding counterfeit social media accounts and advertisements falsely using Crown’s identity. The operator was adamant that online gambling in Australia was strictly prohibited, reaffirming it did not offer any form of iGaming. Such developments further threaten Crown’s public image as the company struggles with reforms.

The Operator Urged People to Report Any Offending Websites

Crown’s official warning highlighted the rising prevalence of fraudulent social media accounts, advertisements, or apps that utilize Crown’s name, logo, images, and other identifying information. The operator was adamant it did not operate an online casino or provide any form of online gambling, as its activities are only limited to its physical venues.

Crown Resorts advised the public to refrain from engaging with such suspicious accounts, avoid disclosing personal information or credit card details, and promptly report fraudulent content or suspicious activity. Despite the Australian government’s efforts to curb illegal online operators, the country struggles to enforce its regulations, leaving many people vulnerable to gambling harm.

Crown continuously works with social media and technology companies to seek removal of fraudulent content as a priority.

Crown Resorts official statement

The Australian Communications and Media Authority (ACMA) has been the country’s leading authority in identifying and dealing with illegal online operators. It regularly requests internet service providers to block offending websites and has been steadily intensifying its efforts. However, such measures usually have limited success as offending operators can change their IP address and circumvent restrictions.

Crown Still Struggles to Regain Compliance

The cautionary message comes amid Crown Resorts’ comprehensive reform initiatives across its Melbourne, Sydney, and Perth integrated resorts. The company is actively working to regain its casino licenses following inquiries in these three states, which delivered unfavorable assessments. Regulators have generally observed steady progress, raising hopes for the beleaguered operator.

Notably, Crown Melbourne recently implemented mandatory time and loss limits for all patrons using electronic gaming machines in compliance with recommendations from the Finkelstein Royal Commission. The company’s rigorous reform agenda is paying off in other jurisdictions, thanks to company-wide safer gambling initiatives and a determination to return to suitability.

Despite Crown’s progress, some recent developments have raised new integrity concerns. The company’s CEO is under investigation over allegations that he allowed removed patrons back into the company’s properties. If confirmed, these suspicions could substantially hinder Crown’s progress toward compliance, and seeing the company’s logo on illegal websites does little to improve its image.

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Crown Melbourne has declared its commitment to becoming the world’s safest casino with the help of a groundbreaking initiative that comes in the form of a new carded play system.

Crown Melbourne Mandates Swipe Cards for Player Limits

The casino, once embroiled in controversy following the 2021 Finkelstein royal commission, has announced that poker machine players will now be required to use swipe cards to establish binding limits on both losses and time spent gambling. 

Crown Resorts chief executive, Ciaran Carruthers, expressed the casino’s ambition to operate the safest casinos globally, emphasizing the transformative nature of this pioneering shift, reported the Australian media outlet The Age.

Effective immediately, patrons utilizing Crown Melbourne’s 2500 poker machines will need to employ a swipe card to determine their maximum allowable losses and set time constraints. This innovative approach aims to promote responsible gambling and empower players to manage their gaming activities more conscientiously.

Additionally, players will receive detailed player activity statements, providing insights into their ongoing spending and playing habits. This move is part of Crown Melbourne’s commitment to fostering an environment of transparency and responsibility.

Crown Resorts Unveils Ambitious Plans for Statewide Gaming Reform

The new system is not limited to Crown Melbourne alone. Plans are underway to extend it to the state’s other 26,380 poker machines in pubs, clubs, and RSLs. 

This development coincides with a challenging period for the casino, as recent reports indicate an investigation into allegations that CEO Ciaran Carruthers intervened to permit blocked patrons to gamble.

Crown Resorts, having faced a substantial $100 million fine last year for allowing prolonged gambling at its Southbank complex, remains under scrutiny for past practices. This year, Crown Resorts also got slapped with a substantial AUD450 million ($309.8 million) fine by the Australian Transaction Reports and Analysis Centre (AUSTRAC) for significant lapses in anti-money laundering and counter-terrorism measures at Crown Perth and Crown Melbourne. 

This move towards heightened player protection aligns with broader industry reforms. Former premier Daniel Andrews previously announced stringent gambling and anti-money laundering measures in August, affecting all pubs and clubs. 

Back in September, Crown Resorts introduced a Premium Player Program at its Crown Melbourne and Crown Sydney casinos, excluding Crown Perth, in a strategic move to rebuild its. The program, directly overseen by Crown Resorts, enforced strict eligibility criteria, collaborating with regulators to ensure compliance with post-inquiry regulations, reflecting the company’s commitment to responsible gaming and ethical practices under the leadership of CEO Ciaran Carruthers.

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Crown Resorts will cut 180 jobs and reduce operating hours at its Sydney casino due to a lack of patronage.

The decision, which was announced to staff earlier this week, comes only two months after the Barangaroo property was forced to close one of its gaming floors.

It means Crown Sydney has now axed 275 positions since opening its doors in August last year.

No longer able to justify remaining open 24 hours a day, the casino will now operate between 10am until 2am from Monday to Thursday and until 4am on Fridays.

The gaming floors will open at 2pm on weekends, closing at 4am on Saturdays and 2am on Sundays.

Crown Sydney CEO Mark McWhinnie said the company was committed to finding the affected staff other roles at its Melbourne and Perth casinos.

“Our priority is to support the 180 impacted team members alongside their union as they determine their next steps,” he said.

Both Crown Resorts and rival operator Star Entertainment have struggled to recover from major regulatory penalties levied against their Australian casinos in the past two years.

Both companies were subject to Royal Commissions that uncovered massive operational failings with regard to anti money laundering (AML) and counter terrorism financing (CTF) regulations, resulting in record fines and licence suspensions.

They have also been affected by significant changes to New South Wales’ gambling tax laws.

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Crown Resorts is set to cut jobs at its Sydney casino, which continues to struggle with low visitation. The casino operator will also reduce its working hours, according to a report by The Sydney Morning Herald.

The NSW news outlet said that the casino operator’s Sydney property does not have enough visitors to justify the 24/7 working hours of the property. The casino, which already shut down one of its gaming floors, will thus reduce its work hours and will close down for eight hours every day.

Under the new schedule, Crown Sydney will close at 2 am and will reopen at 10 am from Monday to Thursday, as well as on Sundays. On Fridays and Saturdays, the casino will close at 4 am instead.

This change will also affect Crown Sydney’s workforce as the operator prepares to part ways with as many as 180 workers. This would mean that the gambling company has cut off a total of 275 since it opened the Barangaroo property in August 2022.

According to a Crown spokesperson, the dismissed workers include many people in frontline gambling-related roles. Some people in casino support and hospitality are also likely to be affected by the layoffs.

Crown Sydney promised to redeploy as many people as it can to its other casinos in the state and promised to provide support to the rest.

Crown’s Business Remains Troubled

Crown Resorts continues to struggle in the aftermath of the regulatory trouble it recently encountered. Multiple violations forced the company to introduce changes to its leadership and implement remediation measures to prevent repeated offenses.

Amidst these hurdles, Crown recently tried to renegotiate its AUD 1 billion tax guarantee with the government of New South Wales. However, Premier Chris Minns said that he believes Crown should either honor its agreement or return the land.

Adding to Crown’s woes, the company narrowly avoided a strike at its Melbourne property. Luckily, the casino operator was able to reach an agreement with its workers.

In the meantime, a former guard is preparing to sue the casino company once again, alleging that Crown and its ex-president James Packer failed to pay him the AUD 260,000 they owed in relation to a previous lawsuit.

One of Crown’s competitors, Star Entertainment, has encountered similar troubles and recently sold its Grand Mirage Resort Gold Coast property.

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Crown Resorts’ woes continue as Crown Melbourne workers prepare to strike just as the highly anticipated Melbourne Cup looms. The Australian casino and hospitality giant recently encountered regulatory problems and is currently struggling with low visitation rates and taxes.

Crown’s workers also aren’t happy with the conditions they are getting. Their current demands include fair wage increases for every year of the new employment agreement and higher weekend and holiday pay rates. Furthermore, employees demand better work rosters that would allow workers to maintain a healthy work-life balance. Finally, the Crown workers demand service-based payment progression.

The upcoming strike comes amid the ongoing cost-of-living crisis that continues to affect the global economy. As a result, workers across the world have been increasingly vocal in their demands for better conditions.

Crown Resorts’ workers in particular expressed concerns about the increasing bills and transportation costs that continue to affect their financial well-being.

Protests May Disrupt Crown amid the Melbourne Cup

A proposed schedule envisions strikes to take place on Saturday from 6 pm to 10 pm, Sunday from 10 am to 2 pm and Monday from 6 pm to 10 pm. The strikes will see the Crown workers stop work for four hours on each of the three days in demonstration of their disgruntlement with the current state of affairs.

The strike is set to coincide with the Melbourne Cup, potentially causing trouble for the casino company. Workers likely hope that this will exert pressure and make the higher-ups listen.

At first, the United Workers Union tried to organize a strike involving 3,600 workers, claiming that all union members should be allowed to strike in accordance with a recent vote. At first, Crown tried to bring this number down to only 1,700 but eventually agreed to allow 3,100 employees to strike.

The dispute between the casino company and its workers is ongoing.

Elsewhere, Detroit’s casino workers entered a third week of strike but a resolution seems to be on the horizon. The Detroit strike saw 3,700 unionized casino workers disrupt casino operations.

In the meantime, unionized Las Vegas workers continue to negotiate with local casino employers. A peaceful protest was recently staged but, unfortunately, led to arrests, much to the union’s dismay.

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Crown Resorts is renegotiating its 1 billion-dollar (AUD) tax guarantee agreement with the New South Wales government. In 2013, the operator promised to pay at least $1 billion in license fees and taxes  over the 15 years after the opening of its Sydney property.

However, the casino didn’t quite pick up as Crown Resorts had hoped. Amid the pandemic and the severe regulatory hurdles experienced by Crown, the casino continued to struggle, eventually forcing the company to shut down two VIP gaming floors.  The decline of visitation from affluent Chinese tourists and Crown Resorts’ losses didn’t help either.

This caused concerns over Crown’s tax obligations. Under the initial agreement, Crown and The Star were expected to pay three times higher taxes in the first three years since the opening of Crown Sydney than those paid by The Star in the year prior to Crown Sydney’s opening. In addition, Crown is still supposed to contribute at least a billion in gaming taxes over the first 15 years of its property’s operation.  

Because of its ongoing financial hurdles, Crown is currently renegotiating its tax obligations with the NSW government. This was confirmed by NSW Treasurer Daniel Mookhey, who was unable to reveal more at this time.

Premier Minns Says Crown Should Honor Its Deal

Premier Chris Minns is unamused, however, saying that Crown secured the casino site for next to nothing thanks to the $1 billion tax deal. Because of that, he slammed Crown Resorts for seeking further relief. Minns pointed out that the company’s demand is “really an insult to all Sydneysiders.” He said that if Crown cannot honor its deal with the people of New South Wales, it should hand the land back.

Despite his pessimism about Crown’s demands, Minns said that his team was obliged to hold negotiations about tax scales and tax arrangements to the state. However, he noted that people “shouldn’t jump the gun” and presume that these negotiations will necessarily lead to an actual net reduction in tax take for casinos in the stake.

Minns added that he does not intend to have public negotiations with casino companies. He added that any potential changes to tax rates will be announced publicly.

In other news, Star Entertainment recently struck a tax relief deal in NSW, reaching a concession on casino duty rates with the government after criticizing the duties earlier this year.

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The Blackstone Group, the globally recognized US private equity giant, acquired Crown Resorts, the leading Australian casino operator, last summer. At the time of the announcement, the price tag of the deal was a staggering AU$8.9 billion ($6.5 billion). However, despite the initial investment to acquire Crown Resorts, The Blackstone Group revealed that it has already spent hundreds of millions of dollars more to help revitalize and overhaul Crown Resorts in the upcoming years.

In a recent interview for The Australian, Blackstone’s global co-head of real estate, Kathleen McCarthy, spoke about the company’s intentions to invest further in Crown Resorts’ Melbourne property. She explained that Blackstone has already invested “hundreds of millions of dollars” in the property as it prepares to completely transform the customer experience.

According to McCarthy, the company is delighted about this investment and the exciting journey that lies ahead. She spoke about Crown’s Melbourne property, explaining that it represents an excellent location. However, McCarthy added that Crown Resorts Melbourne “needs capital investment to make it an exciting and fresh place for folks to come.”

“We have invested hundreds of millions of dollars (behind the scenes), now we get to the really exciting part, which is transforming the customer experience and what they are seeing. We remain very excited, and we are just really beginning the journey here.“

Kathleen McCarthy, global co-head of real estate at The Blackstone Group

Transforming the Experience to Attract More Visitors

When asked about other possible investments, McCarthy said that Blackstone explores additional opportunities. Still, she added that an ongoing focus for the company is the transformation of Crown. According to McCarthy, Blackstone anticipates attracting a wide range of guests at the Melbourne property, including Australians and visitors overseas. She outlined that this can be achieved through investment in new and engaging experiences, such as shopping or food outlets, that can make the property even better.

“We’re really focused on the work ahead of us at Crown and the opportunity to transform the business,“

added McCarthy

Focusing on the bigger picture, McCarthy said that Blackstone prioritizes the transformation of quality real estate. Such initiatives can help bring operational assets, boost cash flow and at the same time, elevate the experiences for the visitors, she said. Finally, McCarthy outlined that the company continues to explore different investment opportunities.

The gambling sector in Australia has seen quite a lot of turbulence lately. With local governments scrutinizing operators and ongoing changes to the established regulations, fears about overspending and gambling harm continue to rise. Yet, the changes to the gambling sector are on a government level, reaffirming the commitment of lawmakers to curb problem gambling and reduce gambling harm.

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