Some critics of the luxury Sydney casino development of Crown Resorts say the project could become an investment that would be not only expensive to maintain but also difficult to dispose of.
The casino development in Sydney is planned as one of the city’s tallest residential buildings, with the project also including the construction of a VIP casino and luxury hotel. The project has been considered as the marketing pitch for Crown Sydney, which development is worth AU$2.2 billion, and the establishment is still expected to start operation by the end of 2020.
The largest shareholder in Crown Resorts, Australian billionaire James Packer, hired some lobbyists to try to convince the wider public that the construction of the gambling company’s tower will be a great addition to the city. The project for the 275-metre-high building overlooking the Sydney Harbour has faced strong opposition and criticism, while Crown’s supporters highlight the fact that the building will be an attractive addition to Sydney’s cityscape with exceptional quality of the venue.
However, with the construction of the Crown Sydney approaching its final touches, the gambling operator is to face the challenge of attracting guests to the casino and hotel venue and selling a total of 82 luxury apartments at a time of a global pandemic and a serious economic crisis.
Crown Resorts Dealing with a Bunch of Challenges amid Lack of Chinese High-Roller Gamblers
Apart from that, Crown Resorts faces additional difficulties, as it currently finds it hard to attract affluent Chinese gamblers, known as high-rollers, to its Australian resorts. Considering the closed borders because of the coronavirus pandemic and the fact that Sino-Australian relations are currently at its lowest, bringing Chinese VIP players to its casinos in Australia would not be easy in the ongoing situation. In addition, the gambling company is also subject to a public inquiry over allegations of working with junket operators known for their links to criminal organizations and money laundering practices.
When asked about the impact of the coronavirus crisis on Crown Sydney, the company’s vice-president of strategy and development, Todd Nisbet, explained that the gambling operator is well-capitalised and remains on track to get the project “up and running”. Mr Nisbet further explained that the Covid-19 pandemic situation provided Crown Resorts with some time to introduce its new project to the domestic market.
As revealed by the gambling operator, it had already managed to sell apartments worth AU$650 million that are situated in the building. However, Crown will still have to shift a considerable amount of real estate, including a penthouse worth AU$100 million and to attract customers to the Crown Sydney hotel and casino in order to generate profit.
According to some analysts, Crown Sydney could become a property that could only make things worse for the gambling company in case it keeps its focus on attracting VIP Asian players. According to one of the experts who has researched the Crown Resorts’ project for several years, Mike Harris, said that Crown Sydney could become “a white elephant”. Mr Harris further noted that the gambling company could either wait for a market recovery or ask for approval to expand the casino operations in Crown Sydney at a later stage.
For the time being, the casino licence held by the operator suspends it from installing poker machines, also known as pokies, which have been one of the key revenue sources of other casinos across Australia. This licence clause has forced Crown Resorts to depend on its high-roller customers, most of whom originate from China.
- Author
Olivia Cole
