Crown Sydney, one of the premier land-based casinos in Australia, has announced that it is closing one of its two VIP-designated gaming areas, known as the Mahogany suite, in response to mounting economic concerns.
The suite, which was just unveiled about a year ago, was designed to cater to patrons who had a minimum tab of AUD $45,000 for Crown amenities, including gaming, resorts and restaurants.
The closure is expected to affect some 95 employees, and the company is reportedly working with those employees to relocate them to other areas of the company.
“Crown has made a decision to consolidate its two VIP casino floors in Sydney in response to the current macroeconomic challenges facing our industry alongside other Australian businesses,” a company spokesperson told the Sydney Morning Herald.
With the closure of the Mahogany suite, VIP play at Crown Sydney will now be consolidated to the Crystal Room for the time being, which offers a total of 226 traditional and electronic table games, each with a minimum bet of AUD$20.
Despite the fact that Crown intends to reopen the Mahogany suite during special events such as Chinese New Year, the closure marks a big shift for Crown Sydney, which was designed by former chairman James Packer as being a hotspot for international high-rollers.
However, thanks to a high-profile acquisition by U.S.-based Blackstone Group and a litany of regulatory woes, Crown as a company has had a very turbulent 18-24 months, in turn affecting its properties.
Ben Lee, a top consultant based in Macau, told ABC News that several factors were working against Crown Sydney’s ability to remain a VIP-catered destination, especially one reliant on clientele from China and other Asian markets.
“That was a property that was predicated on a burgeoning and robust international VIP market,” Lee said. “Even in Macau, our VIP [market] is probably down to about 30 percent of what it used to be pre-COVID and that is a direct function of China’s crackdown on junkets.”
The mismanagement of junket operations has caused Crown immense headaches, as the operator recently agreed to a staggering AUD$450 million (US$289.9 million) fine from AUSTRAC, Australia’s financial crime watchdog, over repeated and systemic anti-money laundering and counter-terrorism funding (AML/CTF) violations.
Junket-related mishaps, including innumerable suspicious transactions, were cited in the ruling.
Some experts, including leading gambling researcher Dr. Charles Livingstone, have posited that the casino is not altogether lost, but it desperately needs to recalibrate its business plan—the quickest way to do so could be to insert poker machines (pokies), which have proven to be the biggest cash cow in Australian gaming.
“Every casino in Australia has poker machines, and there’s unfortunately not a shortage of customers of poker machines in Australia,” Livingstone told ABC News.
Crown is currently unable to offer pokies due its restricted license, but due to the fact that the casino already offers electronic table games, the general consensus is that it wouldn’t be terribly difficult to find a way to get them in the door. In any case, the license only extends through next April.
“Really, there is no barrier to them having pokies,” Lee told ABC News.
