Crown Resorts Takes a Page Out of Las Vegas Playbook, Pivots From Casino Focus

Posted on: June 6, 2024, 03:43h. 

Last updated on: June 6, 2024, 03:43h.

Australian casino giant Crown Resorts is prepping its next chapter, one company officials and investors are hoping stays clearer of regulatory scandals and government inquiries into the firm’s business practices.

Crown Resorts non-gaming casino Australia
Following a dark period for Crown Resorts, the Australian casino operator hopes to make its casino resorts more appealing to non-gamblers. Crown leadership says the company will make considerable investments off of its casino floors in the coming years. (Image: Reuters)

The organization controlled by New York private equity firm Blackstone revealed this week that it will lessen its focus on casino gaming in the coming years in favor of improved hospitality and entertainment offerings. Crown brass told The Australian that the goal is to reduce its dependency on table games and slot machines, the latter of which are commonly called pokies Down Under.

If you look at where Las Vegas has been for the last couple of decades, and even in places like Macau, the importance of non-gaming revenue has taken a much more central role,” Ciaran Carruthers, Crown’s chief executive officer since July 2022, told The Australian. “Globally, integrated resorts have moved to more hospitality and a complete service offering focus rather than being just casino-centric.”

Carruthers says Crown has “lagged” with pivoting towards more non-gaming attractions and amenities at its three resorts — Crown Melbourne, Crown Perth, and Crown Sydney.

Licenses Retained

Crown Resorts faced three government inquiries in recent years for what investigators determined to be numerous regulatory shortcomings. Among the gravest findings was Crown’s inability to properly monitor the flow of money through its casino cages.

The inquiries in New South Wales, Victoria, and Western Australia concluded that Crown was unsuitable to possess a gaming license in the Australian states. However, the governments allowed the company to retain the critical casino concessions on the assumption that the casinos would undergo vast changes to become compliant with anti-money laundering safeguards and allow government-appointed monitors to keep close tabs on the businesses.

Crown overhauled its C-suites and board makeup and continues to make updates to its gaming operations. Moving forward, the casino company founded by billionaire James Packer will invest more in projects outside of the gaming spaces.

Carruthers wouldn’t pinpoint just how much capital Crown might inject into its three properties, but said it would be “in the many hundreds of millions of dollars.” Possible additions include more entertainment, enhanced food and beverage options, the hosting and/or sponsoring of live sporting events, and expanded wellness offerings.

Carruthers’ career in the casino industry started as a table game dealer. He’s since climbed the corporate ladder to one of the global gaming market’s top positions, albeit one with many eyes on his performance.  

Blackstone Gaming Business

Blackstone, one of the largest alternative investment management companies in the world with more than $1 trillion in assets under management, is today also a major player in the global gaming industry.

Blackstone in 2022 rescued Crown amid its inquiries and threats of losing its gaming licenses. Blackstone paid more than $6 billion for the casino group. Crown paid roughly $450 million in inquiry fines, while Blackstone allocated another $133 million to update the company’s regulatory controls to get the casinos back in compliance.  

Blackstone is no stranger to Las Vegas, as the firm is the landlord of the Bellagio, The Cosmopolitan, Aria, and Vdara. Blackstone leases the resorts’ operations to MGM Resorts International.

Blackstone formerly owned Mandalay Bay and MGM Grand.