Can Crown Sydney’s style refresh win back the high rollers?

Crown Sydney has reopened one of its gaming floors in the hope that a refurbishment will attract foreign and local punters to its VIP-only casino after poor foot traffic resulted in more than 200 job cuts and reduced operating hours just one year into operations.

The Barangaroo tower’s boss Mark McWhinnie said he was confident the revamped Mahogany Room would attract gamblers from Australia and overseas. He stressed he believed the business model would prevail regardless of whether Chinese tourists, who formerly propped up the bottom line of all Australian casinos, returned to Australia.

Crown Sydney boss Mark McWhinnie says he’s still confident there’s enough appetite for two casinos in NSW despite soft foot traffic.
Crown Sydney boss Mark McWhinnie says he’s still confident there’s enough appetite for two casinos in NSW despite soft foot traffic. Credit: Dominic Lorrimer

“I’m not overly concerned [by the absence of Chinese tourists] because we’re not just hanging our hats on China. It’s quite the opposite. We’re focused on developing awareness and demand on a number of countries in South-East Asia,” McWhinnie said.

Inbound tourism to Australia has picked up over the last year, with the latest ABS data revealing international arrivals increased to 75 per cent of pre-pandemic levels as of September last year.

McWhinnie said Crown was “quite bullish about what the international market will represent in the future”.

This masthead revealed in August that Crown had been forced to close the Mahogany Room – which was originally designed with private salons for top high rollers – due to poor visitation. It also reduced its hours of operation and made more than 200 staff redundant.

The Mahogany Room has since been redesigned to have a mix of tables and private booths to attract all kinds of punters to the same floor. Crown said it planned to reopen its second floor, known as the Crystal Floor, but did not commit to a timeline. As a VIP-only facility, Crown Sydney has no poker machines. A minimum bet of $20 applies.

Private equity giant Blackstone purchased Crown Sydney and the broader Crown Resorts business for $8.9 billion in June 2022 after the casino group was disgraced by extensive breaches of anti-money laundering and counterterrorism financing laws. The breaches culminated in the loss of its casino licences in the three states in which it operates.

Crown Sydney opened one month after Blackstone formally took the reins of the business and overhauled its original strategy, which was based around attracting junket-driven, overseas high-rollers.

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The company has spent $71 million in anti-money laundering and counterterrorism compliance measures since 2021, discontinued all junket tour operations and is transitioning to cashless gaming.

Crown Sydney has been operating under a conditional licence since opening in 2022. The NSW Independent Casino Commission will decide later this year whether its investment and strategy change has been enough to reinstate Crown’s full licence.

Regardless of whether it regains it, investors and industry analysts have long questioned whether the state is big enough for two casinos.

US-based Blackstone investors told this masthead in December that they were concerned the Crown takeover was a bad call. Rumours have also intensified about whether a long-touted merger between Crown and Star Entertainment is finally on the cards, as casinos face challenges from the high cost of living, increased taxes and regulatory hurdles.

McWhinnie dismissed the idea that the business model of the $2.2 billion Barangaroo precinct wasn’t sustainable, or was too reliant on casino visitation.

“If you look at the fabric of what we offer we’re not just about a casino experience. We’re a well-rounded entertainment space,” McWhinnie said.

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Source: Thanks smh.com