In this regular feature in IAG to celebrate 18 years covering the Asian gaming and leisure industry, we look back at our cover story from exactly 10 years ago, “Crown’s jewel”, to rediscover what was making the news in July 2013!
Hindsight can be a wonderful thing. In the cover story of our July 2013 issue, titled “Crown’s Jewel”, IAG detailed the news that Crown Resorts and its billionaire owner, James Packer, appeared to have won their battle to develop a new high-end casino-resort in Sydney – making it the first city in Australia to shelve the nation’s traditional one-city, one-casino model.
This much proved true: Crown Resorts opened its AU$2.2 billion integrated resort in Barangaroo, located in prime position on the Sydney Harbour waterfront, as a non-gaming only resort in December 2020 with casino gaming given permission to launch in August 2022.
What we didn’t know at the time was the controversy this development would bring and the sheer chaos its presence would inadvertently instigate for the entire Australian casino sector as a whole.
The ostensible argument behind a second Sydney casino was the need to provide broader appeal to the high-spending international tourist market, and particularly those from China.
In a statement provided to the NSW state cabinet in June of 2013, Packer wrote of rival Star Entertainment Group, operator of The Star Sydney, “The Star has failed to capitalize on the opportunities provided by the growth in Chinese tourism, the massive Asian high-roller market and Sydney’s natural attraction as a superior destination for high-end tourists and VIP players.”
Then-NSW premier Barry O’Farrell said the decision to ultimately award Crown approval to develop Crown Sydney without having to go through a competitive tender process was “the opportunity to introduce competition into the market. Sydney was falling short of its potential share of the growing international gaming and tourism market and has underperformed compared with Melbourne,” home to Crown Melbourne.
Despite backlash over O’Farrell’s decision and questions over his links to Packer, the greater threat to Crown Sydney becoming a reality proved to be the NSW Bergin inquiry into Crown’s dealings with Asian junket operators at its flagship Melbourne casino.
Launched in 2020 in response to a media exposé, the inquiry ultimately found Crown unsuitable to hold a casino license in NSW but provided recommended pathways through which the company could return to suitability. It also sparked two more separate inquiries into Crown Melbourne and Crown Perth which resulted in similar findings, with Crown’s remediation efforts ongoing to this day.
The irony is that, while the NSW regulator ultimately gave Crown the green light to open its Sydney casino last year, the company itself looks very different to the one that oversaw Crown Sydney’s development, with almost the entire Crown Resorts board and dozens of senior executives having been shown the door as a result of serious compliance failings. Even James Packer himself is a distant memory, ultimately forced to sell off his entire stake as part of US private equity giant The Blackstone Group’s AU$8.9 billion (US$6.5 billion) takeover in June 2022.
In IAG’s 2013 cover story, we quoted supporters of the Crown Sydney development pointing out that, controversy aside, no one else had put their hand up to invest upwards of AU$2 billion to improve Sydney’s global tourism appeal. Patricia Forsythe, executive director of the Sydney Business Chamber, called Crown’s approval a “clear winner” for the city given only one new five-star hotel had at that time opened in Sydney since the turn of the century.
There is no doubt Crown Sydney has raised the bar when it comes to world-class hotel accommodations. But with the Chinese high-roller Crown Sydney was targeting now constrained by Beijing’s cross-border gambling crackdown and bans in place on the use of Asian junkets, only time will tell whether the property has the appeal it needs to become a true success story.
