Crown Resorts and The Star, two major casinos located across from each other in Darling Harbour, have both faced challenges in recent years. Crown, once owned by James Packer, struggled to find a buyer before selling a stake to Melco Resorts. This decision led to investigations into Crown’s dealings with junket operators linked to organized crime, resulting in the cancellation of its license in Melbourne and delays in opening its Sydney casino. The Star also came under scrutiny, with a recent inquiry recommending it unsuitable for a casino license due to various issues. Both casinos now face new regulations and compliance requirements that may impact their profitability.
The regulatory landscape for casinos has changed dramatically, requiring increased customer information collection, cashless poker machines, and regular welfare checks on gamblers. While Crown, now owned by Blackstone, has been deemed suitable to operate in NSW, it has struggled to attract customers and has made staff cuts. The Star has faced similar challenges, losing executives and market value, with concerns about its future profitability. Both casinos are now required to pay significant taxes to the state government, despite facing financial difficulties.
Industry experts question whether Crown and The Star can achieve profitability in the current environment, given the decline of the VIP high roller market and restrictions on poker machines. While domestic VIP customers may provide some revenue, the casinos may struggle to reach their previous levels of profit. However, some believe that with the backing of Blackstone, Crown could eventually return to profitability by adapting to the new regulations and finding ways to generate revenue.
As both casinos navigate the changing regulatory landscape, there are concerns about the impact of cashless play requirements and increased compliance measures. While these rules aim to prevent money laundering and promote responsible gambling, there are calls for them to be extended to pubs and clubs that operate poker machines. Despite the challenges faced by Crown and The Star, some industry insiders believe that casinos will eventually find ways to work around the regulations and return to profitability. The future of both casinos remains uncertain, but there are opportunities for them to recover and thrive in the long term.
Despite facing financial difficulties and regulatory challenges, Crown and The Star are working to adapt to the changing landscape of the casino industry. With increased compliance requirements and changes to their business models, the casinos are exploring ways to attract customers and generate revenue. While there are concerns about profitability in the short term, some experts believe that with the right strategies and investments, both casinos can overcome their current challenges and thrive in the future. The casino industry in Australia is facing a period of transition, but there is optimism that Crown and The Star can find success in the long run.
