$1.6 Billion Crown Sydney December Opening Banned, License Hangs in Balance
Posted on: November 18, 2020, 05:04h.
Last updated on: November 18, 2020, 05:31h.
Crown Resorts has been told by the New South Wales gaming regulator (ILGA) to put the opening of its $A2.2 billion ($1.6 billion) new Crown Sydney on ice. That’s pending the verdict in February of a licensing suitability investigation.
The embattled casino operator had planned to open next month, despite the ongoing inquiry into whether it had allowed criminals to launder money through its VIP segment.
There was a trading halt of the company’s shares on the ASX Wednesday, shortly before ILGA announced its decision.
Missing ‘the Vibe’
“The authority has found ongoing evidence before the Bergin inquiry to be extremely concerning, and that any gaming activity at the casino before the inquiry’s findings are released in February 2021 and considered by the authority would pose unacceptable risks on the community against the public interest,” ILGA chair Philip Crawford told reporters.
Crawford added he was “disappointed” that Crown had not taken the decision itself to postpone the casino opening.
“I think they are not picking up the vibe,” he said. “There is a lot of serious stuff going around.”
Crawford said ILGA had discussed a limited opening with Crown that would include restaurants and bars but not gaming. But the operator “didn’t take us up.” Instead, Crown asked for a graduated opening that included gaming, something the regulator was not comfortable with, Crawford said.
The Bergin inquiry was launched at the beginning of the year. It came in response to lurid media reports about Crown’s relationship with junket operators with links to triads. The organizations allegedly washed dirty cash at its high-limit tables.
Inquiry chair and former judge Patricia Bergin will submit her recommendation on Crown’s licensing suitability to ILGA by February 1. The regulator will then decide the fate of the license and, with it, the Crown Sydney.
On Wednesday, Crown admitted that two bank accounts it controlled for the use of high-rolling gamblers had been used for money laundering.
Lawyers assisting the inquiry have called for the company to be found unsuitable to retain its New South Wales license, criticizing its corporate culture and governance.
Crown is also facing an investigation by AUSTRAC, the country’s financial crimes agency.
The new casino, located on the waterfront in Sydney’s Barangaroo district, was conceived as an exclusively VIP destination. And it was designed to attract the Asian high rollers – precisely the kind of clientele that has got Crown into trouble. Crown Sydney is table games only — no slots — and the operator had planned to staff it with Mandarin-speaking workers.
The building, Sydney’s tallest, has a 75-floor tower that will include 82 luxury apartments and a six-star hotel. To lose the gambling license would be an unmitigated disaster for Crown. With no gambling, the high rollers won’t come, and the company will be forced to sell.
“The [ILGA] decision highlights the potential severity of findings by the inquiry, and the risk of meaningful sanctions and/or limitations on Crown’s ownership and operations,” said Moody’s Investors Service analyst Maadhavi Barber Wednesday.
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