Crown Sydney expected to underdeliver on tax revenue
The new Crown Sydney casino is set to deliver an extra $100 million in tax revenue to the New South Wales government in its first year of operation alone.
The ABC reports that this figure is just a quarter of what Crown Melbourne delivers to Victoria.
Experts say the gambling floors in Sydney cannot deliver as much as initially promised to the state’s economy, as its model was based on the high-roller market, which has been decimated.
Crown Resorts was granted an approval to operate its casino by the NSW Independent Liquor and Gaming Authority in late June, the same body that ruled in February 2020 the venue owners unfit to hold a gaming licence after an inquiry found it was turning a blind eye to money laundering in its casinos in Melbourne and Perth.
Nevertheless, Crown pushed ahead in Sydney, opening its $2.2 billion building on Sydney Harbour in 2020 with hotel rooms and restaurants, but no casino.
Sixteen months later, ILGA granted Crown a provisional gaming licence, just in time for the official takeover by US private equity firm Blackstone.
Blackstone is yet to commit to an opening date for the Sydney casino, but NSW Treasury budget papers predict the government will rake in $231 million from the state’s two casinos in the next financial year.
This revenue includes Sydney’s Star Casino.
Crown to poach customers from nearby Sydney and Queensland casinos
Monash University gambling researcher Charles Livingstone said Crown would not be the major boost to tax coffers it could have been.
“It looks like it’s going to bring in an additional $100 million at most,” he said.
“The revenue that we can expect Crown Sydney to generate in the next year would be around $500 million based on what the Treasury has estimated their tax revenue share to be.
“That’s about a quarter of what Crown in Melbourne would make in a good year.”
Crown Sydney will not be the international high-roller attraction that was promised when it was approved by then-premier Barry O’Farrell in 2013.
As well as COVID wiping out international travel, China has issued edicts banning gambling in several jurisdictions, and while the blacklist of destinations isn’t public, experts strongly suspect it includes Australia.
Macau-based casino analyst Ben Lee said Crown now had to attract other customers from overseas, but also from within the country where gamblers are already serviced by casinos.
“Crown is not going to poach their people from Melbourne and send them to Sydney.
“They’re going to go after Star’s local Sydney market as well as Queensland’s market,” he said.
Pokies a must for successful casino – expert
He believes Crown cannot operate a successful casino without poker machines, something its current licence prohibits.
“Right now, pokies are not allowed but I would bet any money they will be lobbying the government very hard to be allowed to have slot machines in Barangaroo.”
The casino opening is good news for local jobs though, with the company predicting it will hire 2,000 people in its restaurants, hotel and gaming floor.
In announcing the licence, ILGA chairman Philip Crawford claimed the “new Crown” was a vast improvement on the “old Crown”, noting the company needed to “blow itself up to save itself”.
A handful of board members and senior executives resigned in the wake of the Bergin report and Mr Crawford said the organisation had rebuilt its gaming policies from the ground up.
Blackstone has since bought Crown’s three Australian casinos and billionaire James Packer has exited the business, selling his 37 per cent stake for $3.3 billion.
