AU Land-Based Casinos See Considerable Growth

There were significant developments in the land-based casino sector in Australia last week, with 2 major players going down different trajectories in facing and overcoming regulatory and compliance challenges. Crown Entertainment scored a win and retained its license after dealing with licensing issues and takeover bids , while Star Entertainment seems at this point in time unable to come out of the problem conundrum as it gears up for another inquiry. This comes not long after they faced major losses due to faulty TICO machines.

Crown Sydney Retains Casino License

Three years after the Bergin inquiry in 2021 found Crown Sydney Gaming Pty Ltd. ‘unsuitable to hold a gaming license, Crown Sydney achieved a major comeback when the NSW Independent Casino Commission (NICC) granted it an unrestricted license for its Melbourne casino and then for its Sydney outfit.

Crown’s Barangaroo Problems

Crown Resorts opened a huge resort in Barangaroo in 2020. However, it ran into problems soon after, after an independent inquiry led by former Supreme Court judge Patricia Bergin found evidence of money laundering in its Melbourne and Perth casinos and also governance issues arising out of the actions of some of its earlier directors.

The Bergin inquiry's findings led to Ms. Bergin ruling that Crown Resorts was ‘unsuitable to hold a license.’

The Way Back

In June 2022, though, Crown was able to obtain a provisional license from the NICC for the casino to stay open, under the watchful eyes of special monitor Gary Gill from Kroll Consultancy under authorization from the Independent Liquor and Gaming Authority (ILGA).

That license, which was set to expire in December that year, was extended to June 2023. In the years in the interim, the gaming giant has stuck to the roadmap that it had put together with the regulator. In the process it achieved significant transformations in its corporate culture and made structural changes, while also introducing measures to counter money laundering.

It was bought out by Blackstone in 2022 for $8.9 billion and this made it possible for the company to invest wholesale – to the tune of over $200 million – and get through the remediation program that it had arrived at in collaboration with the regulatory authorities to ensure harm minimization, prevent financial crime, and adhere to all regulatory, governance and compliance standards.

Making the announcement regarding the future of Crown Sydney, the Chief Commissioner of the NICC Philip Crawford said, “The NICC is confident the Crown we deemed suitable today has a strong model to keep operating into the future… There is and will always be room for improvement, but Crown is a changed business that is looking toward the future.”

Star Entertainment Remains Tangled in a Web

While Crown Sydney seems to have shrugged off its troubles to get back on the road to profitability armed with an unrestricted gaming license, its competitor and rival Star Sydney continues to struggle with its problems as it remains firmly entangled in a web of controversy.

As if the multiple controversies that Star Sydney seems to be wading through is not enough, David Foster, the chairman of the Star Entertainment Group, is now facing flak for his recent comments against NICC, the state’s gaming regulator.

Foster Lashes Out, Says He Wished to ‘Abolish’ NICC

Foster recently expressed his wish to ‘abolish’ the NICC, which on its own may seem like a one-off slant. However, set it against the backdrop of the public inquiry that Star Entertainment is facing regarding its license suitability for running the casino, and it takes a different spin altogether.

Star Entertainment Group Facing Multiple Inquiries

To put things in perspective, Star Entertainment Group has been facing inquiries on multiple counts. The first of these involved an investigation for regulatory breaches, which led to the Star Sydney casino being found unsuitable to hold a casino license. The public hearings to address this led to disclosures about a mismatch between data records about interactions by Guest Support Officers and possible falsification of records.

To add to all this, the casino was alleged to have paid out up to $3.2 million by ‘mistake’ through defects in their TICO machines that allowed visitors at the casino to cash out more than they were due – when a player inserted two tickets into a machine it threw one back out, allowing the player to reuse it and collect a payout again.

Foster has offered clarifications about his remarks and said they were not made to undermine the NICC’s authority in any way. He said that he was, through those remarks, merely trying to address the gaps that seemed to be present between regular gaming establishments and casinos. However, doubts remain about the manner in which he has gone about interacting with the regulatory authorities.