Crown to open Sydney casino in early 2022 as it works with regulator on governance failures

Australian casino giant Crown Resorts has announced plans to offer gambling at a new Sydney resort in early 2022. The news comes as the operator works with regulators in the country to address governance failures which have troubled the company throughout the last two years.

The $1.6 billion integrated resort first opened in December 2020. However, it did so without gaming after a government probe in New South Wales determined Crown was not suitable to conduct gambling operations, amid issues with organized crime groups and money laundering. The casino had its license suspended by the Independent Liquor and Gaming Authority (ILGA).

However, following a revision and changes to its leadership and board, Crown would now be set to open its gaming floor as early as January next year. The ILGA has confirmed the resort has made progress on a series of governance changes, local media reports, and Crown is waiting for the final permissions from the regulator.

As the gaming giant rebounds from restrictions and its regulatory woes, the renewal of interstate travel and the opening of its Sydney casino are expected to boost its earnings, said new chief executive Steven McCann. Moreover, he brought up the possibility of a fourth hotel in Melbourne at an investor briefing on Monday, reports The Sydney Morning Herald.

“We’ve had continued challenges obviously through COVID 19. In terms of lockdown, that’s been the single biggest material in business performance,” McCann said. “But today we have all three resorts open and operating and building momentum back to pre COVID levels.”

The group’s hotel offering in Sydney has so far been well-received by customers, especially over the past month. Occupancy has progressively improved since reopening, averaging about 40% since mid-November with higher occupancy on weekends and average room rates “around twice the competitor set in the Sydney market.”

Whilst no official opening date for gambling operations in Sydney has yet been given by the regulator, McCann confirmed “frequent discussion” with the ILGA, currently targeting the gaming floor “opening early in the new year.” This opening will be on a staged basis given current staffing levels, with further recruitment for gaming-related roles required ahead of launch.

However, while Crown remains optimistic about launching its Sydney casino, its flagship Crown Melbourne venue still suffers from a lack of people traveling into the city’s central business district. In the few weeks since Melbourne’s restrictions had been lifted, gaming revenue was at 75% of pre-Covid levels, and hospitality revenue was at 65%, reports Sydney Morning Herald.

“The CBD hasn’t come back anywhere near as hard as some of the other cities and is still pretty soft,” Crown chief financial officer Alan McGregor told the briefing. “We anticipate that it’s probably going to last through to Christmas and the New Year period.” Crown's hotel performance has also been affected by the lack of both domestic and international travel.

The company has also reported staff shortages across the hospitality industry, which is impacting certain areas of its business, “most notably hotels and food and beverage.” The operator has thus recently announced a training partnership with the state government to get more staff working at its Melbourne property.

Crown has faced its two hardest years after local media launched an investigation into the company’s relationships with junket operators tied to Asian crime syndicates, shortly after sparking inquiries in Victoria, NSW and Western Australia. 

These reviews led to the clearance of Crown’s management and board, plus newer strict license conditions. Crown has now cut all former partnerships with junket operators, and the group has worked in improving its balance sheet. The WA review is yet to report its findings.