Crown Resorts’ Sydney casino opening could be delayed
The huge paperwork burden of two royal commissions could see Crown’s Barangaroo casino opening date come down to the wire.
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Crown Resorts’ hopes that it will be able to open its $2.2bn Sydney casino gaming floor in October are coming down to the wire, with the burden of two royal commissions into the company raising the spectre of further delay for major shareholder James Packer’s pet project.
The hotel, luxury residential and casino complex at Barangaroo on Sydney Harbour was set to open last December - but the opening of the gaming floor was delayed by the NSW Independent Liquor and Gaming Authority (ILGA) pending the outcome of the Bergin Inquiry into the gaming giant.
When the Bergin Inquiry in February ruled that Crown Resorts was unsuitable to hold a casino licence due to money laundering vulnerabilities and deficient corporate governance, the opening of the casino was delayed until ILGA and its chair Philip Crawford could be satisfied Crown had reformed itself.
Mr Crawford appointed governance and risk consulting firm Kroll to act as “independent monitor” of the reform efforts spearheaded by Crown’s new chief Helen Coonan, but confidently assured the public they would return a finding of suitability well before the year’s end.
“I think we can assume that we are hopeful and confident that the opening of the gaming rooms will happen well in advance of the end of October,” Mr Crawford said in May.
But it is understood that Crown’s ability to meet requests put to it by Kroll have been compromised by the severe burden of the two royal commissions into the company - one in Victoria, and one in West Australia.
Sources at ILGA say that although Crown has been working hard and engaging with Kroll and the authority, the Victorian commission had been particularly demanding on the company’s legal and compliance teams - requiring the provision of more than 100,000 documents - which is three times what was provided to the Bergin Inquiry.
Kroll, ILGA and Crown are set to meet to establish a clearer timeline to the completion at the end of August - the same time Ms Coonan is expected to resign as executive chairman of Crown and announce a new chair.
Crown’s regulatory transformation team headed by former NRL chief operating officer Nick Weeks is confident that the original timeline for approval can be adhered to, while ILGA is more circumspect and willing to push back Crown Sydney’s opening date if needed.
Crown Sydney being unable to open in October would come as a blow, with the Victorian royal commission set to report whether the company is suitable to run its flagship Crown Melbourne casino on October 15.
One senior casino analyst told The Australian that industry observers have already factored in a delay in a Sydney opening due to the regulatory complexity and the threat posed by the spread of the Delta Covid strain.
“It wouldn't be a huge surprise that the opening might be delayed, I think most people factor in a delay into the next calendar year in their models - it’s also unknown whether gaming facilities will be able to be up and running late this year anyway,” he said.
The analyst added that the Crown share price - which has fallen around 30 per cent since May - would be more impacted by what happens to Crown Melbourne.
“The expectations around Crown Sydney are not material, the main game for crown is retaining the Melbourne license,” he said.
Originally published as Crown Resorts’ Sydney casino opening could be delayed
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