In light of recent developments in the Australian gaming industry, gaming consultant David Green offers insights into the suitability of Crown Resorts and the challenges faced by its competitors: The Star and SkyCity.
After a lengthy audit, Crown Resorts was allowed to retain its casino license in Sydney, when authorities in New South Wales ruled that the group’s remediation efforts have been sufficient.
In its report, the New South Wales Independent Casino Commission (NICC) acknowledged the group’s ‘comprehensive transformation of its business, implementing extensive reforms across harm minimization, financial crime, governance, compliance, and risk’.
These reforms have been undertaken under new ownership and executive leadership since Crown was acquired by Blackstone in June 2022. Notable changes include the establishment of new Boards, including Crown Sydney’s Board chaired by John Borghetti.
Crown Sydney has implemented standards to deter and detect money laundering, including being the first in NSW to introduce cashless gaming on all Electronic Table Games (ETGs).
Commenting on the matter, CEO of NewPage Consulting David Green emphasized to AGB Crown’s strategic advantage in maintaining its suitability, stating that the “finding of suitability of Crown provides a redundancy position in the event that the second Bell inquiry into The Star finds that it continues to be unsuitable to hold a casino license.”
Australian gaming operator The Star is also facing its own deal of scrutiny, with the public hearings as part of the second Bell Inquiry into its Sydney casino operations initiated this month.
Green highlighted Crown’s methodical approach to regaining suitability, citing its strong operational team and cooperation with its appointed monitor. The Independent Liquor and Gaming Authority has installed Gary Gill from consultancy Kroll to closely watch how Crown runs its Sydney casino staff training procedures.
Despite Crown’s success in maintaining both its Melbourne and Sydney casino licenses, it is now reportedly cutting up to 1,000 staff due to market conditions and its ongoing remediation efforts.
Addressing Crown’s ongoing issues, Green notes concerns about the commercial viability of its Barangaroo casino under current operational limitations. However, he suggests that the Star’s precarious position may work in Crown’s favor, especially if the Star remains unsuitable for a casino license in New South Wales.
In contrast, Green criticized The Star’s handling of similar challenges, describing it as “chaotic, unfocused and adversarial,” with a lack of leadership possessing deep operational experience.
Shifting focus to SkyCity Entertainment Group, Green discussed the challenges facing its incoming CEO.
SkyCity recently announced the appointment of former Aristocrat executive Jason Walbridge as the company’s new Chief Executive Officer.
The appointment coincides with ongoing state investigations into SkyCity. National financial regulator AUSTRAC initiated proceedings against SkyCity Adelaide in 2022, alleging significant and systemic non-compliance with anti-money laundering and counter-terrorism financing laws.
In February, SkyCity increased the amount it had set aside to cover a potential civil penalty from AU$45 million ($29 million) to AU$73 million ($47.3 million).
“The incoming CEO will need to re-establish its relationship with its South Australian regulator, and presumably with AUSTRAC as well,” Green told AGB.
The consultant emphasized the importance of understanding compliance obligations and meeting stakeholder expectations, particularly the South Australian government’s, noting that while SkyCity is dual-listed on the Australian and New Zealand Stock Exchanges, expansion beyond existing markets is imperative for growth.
“Having a strong share price will be a crucial determinant as to how quickly it can tap additional financing for that purpose,” Green concluded, highlighting the need for strategic growth beyond mature, heavily regulated markets like New Zealand and South Australia.
