China’s directive could hurt Crown Sydney

by Mia Chapman Last Updated
Public park near Crown Sydney won?t open for five years 

The Chinese government directive urging its citizens not to travel to Australia threatens to make Crown’s under construction $2.2 billion casino complex on Sydney Harbour a “white elephant”, according to industry experts.

The Guardian reports the project can no longer rely on income from high-roller gamblers from China once it opens, who were initially central to its business model.

Gambling academics and city planners have expressed concern over the future of Crown’s Sydney casino at Barangaroo as a result of the Chinese Ministry of Culture and Tourism’s warning to Chinese residents “to enhance their safety awareness and do not travel to Australia” issued last week, citing a spike in racism during the coronavirus pandemic.

Senior gaming industry advisers said the Chinese government had previously been successful in directing where Chinese citizens gamble, noting Macau, and while most Australian casinos will suffer from last week’s travel warning, it appears Crown’s planned Sydney venture will be impacted most directly.

Crown, whose ownership and allegations of high-roller junkets and money laundering are the subject of a New South Wales parliamentary inquiry and other planned inquiries – has attracted controversy over plan to target VIP players at the 75-floor tower that will also include 82 luxury apartments and a six-star hotel, due to open in December, ahead of the casino’s opening in early 2021.

However, the future revenue stream of the building, which was controversially approved for the city’s second casino licence in 2013, has been throw into question after a drop in high rollers in recent years.

This has prompted industry observers to question the viability of the Crown Sydney project relying solely on foreign high rollers, and while Crown has not applied for poker machines – considered a reliable income source for casinos – its future rival Star City recently secured a 21-year exclusivity deal with the New South Wales government to be the only Sydney casino with poker machines.

Staff stood down but construction continues

While the group’s strategy throughout COVID-19 saw it stand down 95 per cent of its workforce while securing funding to continue construction of the Sydney site, revelations surfaces that Crown had organised invite-only events for VIP players at Fairfield and Rooty Hill RSL earlier this year.

Chief executive Ken Barton said Crown Sydney “has always, at its heart, been a destination designed for both Sydneysiders and visitors alike.”

Associate professor of public health and head of the gambling and social determinants unit at Monash University Charles Livingstone, said that while the Chinese travel warning would also affect middle-class tourists who stay in and gamble at Australian casinos, the drop off in high rollers presented a bigger threat to casinos.

“Where are they going to get the gamblers from? That’s a very good question because their finances rely on a high number of high rollers from China,” Mr Livingstone said.

“I’d say they are in very difficult circumstances.

Livingstone, a long-time critic of Crown, warned the Barangaroo casino may look to target local gamblers and negotiate with the state government for a poker machine licence, citing its contribution to the economy.

“Many casinos in Australia have opened on the promise they won’t have pokies and usually within five years they end up with pokies,” he said.

There is no evidence to suggest Crown has made any attempts to secure poker machines for its Sydney casino and it has ruled out doing so in the past.

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