Crown's Sydney casino is expected to deliver an extra $100 million in tax revenue to the NSW government in its first year, just a quarter of what its Melbourne venue delivers to Victoria's coffers.
Experts say the gambling floors in Sydney's tallest skyscraper cannot deliver as much as promised for the state's economy with its high-roller market decimated unless it is afforded a major change in its operating licence.
Crown Resorts was this week granted an approval to operate its casino by the NSW Independent Liquor and Gaming Authority (ILGA), the same body that in February 2020 ruled Crown was 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 Friday's official takeover of the company by US private equity firm Blackstone.
Blackstone is yet to commit to an opening date for the casino, but NSW Treasury budget papers predict the government will rake in $231 million from casinos in the next financial year, a revenue stream that also includes Sydney's Star Casino.
Monash University gambling researcher Charles Livingstone said Crown would not be the major boost to tax coffers that it could have been.
"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 existing casinos.
He believes Crown cannot operate a successful casino without poker machines — something that 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 gambling 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, with ILGA confirming it had also done significant probity work on that company.
And billionaire James Packer has exited the business, selling his 37 per cent stake for $3.3 billion.
In heralding the Blackstone takeover on Friday, Crown Resort's Chief Executive Officer Steve McCann said the business had "undergone immense transformation."
ILGA insists it will monitor Crown's operations and reserves the right not to grant a full licence after the provisional period if it breached any of the conditions of its licence.
A spokeswoman said Crown had agreed to comply with the following:
- Not engaging with junket operators
- Appointment of an independent monitor
- Requirement to undertake rigorous customer due diligence for both members and guests and monitor patron accounts for criminal activity
- Due diligence on cash transactions over a certain threshold, including identifying the source of player funds.
NSW Treasury budget papers show the state is still expecting an overall increase gambling tax revenue to $3.2 billion in 2022-23, mostly thanks to the tax earned from poker machines and due in part to increasing taxes for online wagering.
