Crown Resorts moves to shake off seamy casino underbelly to be become a ‘resort destination’
As the company formerly backed by James Packer fights to keep its casino licences, it has unveiled its own gambling reforms aimed at re-establishing its reputation as a resort destination.
After $700m in fines and three inquiries, including a royal commission, Crown Resorts is eager to shift the spotlight off its gaming floor and poker machines that fuel its profits.
Casinos are Crown’s main draw but the company - backed by James Packer before it was sold to US private equity titan Blackstone for $8.9bn last year - wants to be known more as a resort destination, akin to the gaming hubs of Las Vegas and Macau.
Following damning revelations of historical money laundering breaches, facilitating organised crime and other wrongdoing, Crown under new chief executive Ciarán Carruthers is moving to shake off its seamy casino underbelly image, spending $13m on a suite of gambling reforms.
Mr Carruthers says the changes - which include mandatory carded play, pre-commitments, cashless gaming and enhanced data sharing - may hit the company’s profits in the short-term but will strengthen its earnings in coming years.
“One of the perceptions at the moment is that all of these measures, particularly for a resort like Crown Melbourne - but the same goes across Perth and in Sydney - is that it will be negative for the casinos in terms of our commercial viability,” Mr Carruthers said.
“The way I look at it is … people have forgotten that we’re an entertainment integrated resort with so much more to offer and our intention as we roll this plan out is to act aggressively and genuinely to make it a safe environment for people to enjoy.
“Over time that will help us reach a larger cohort of people, be more attractive to many more people, many of whom don’t want to necessarily see themselves as patrons of a casino but want to be entertained and have a good time.”
If Mr Carruthers pulls it off, it will also help attract more people into the CBDs where Crown operates that have been hit hard by the pandemic hangover of working from home.
“It is a difficult and challenging time now. CBDs are struggling, the economy is struggling and international tourism is not back to the numbers that we would all have hoped for by now.
“We see the same pressures as the rest of the hospitality and entertainment industry in terms of a limit of discretionary spend. People are feeling the pinch but we (Blackstone and Crown’s new executive) didn’t come here with the expectation that within the first six, 12, 18 and 24 months that things would be going gangbusters after the pandemic.
“We’ve come out of some very difficult times for Crown as a company and a brand. But we now have those legacy issues behind us, we’ve got clear sky ahead of us, and this is the first of our major announcements and it’s a critical one talking about a safe environment for people to enjoy our resort.”
The reforms include rebadging its responsible gaming unit to Crown PlaySafe in effort to remove the stigma associated with problem gambling. Mr Carruthers said the changes went above legislative requirements.
Victorian Premier Daniel Andrews shocked hoteliers and gaming operators last week when he announced sweeping poker machine reforms aimed at curbing problem gambling.
Mr Andrews’s changes included slashing pokie venue trading hours - which Crown was exempt from - smaller spending limits and slower spin speeds.
Mr Carruthers said Crown’s program - headed by public health researcher Jamie Wiebe, who joined the company in March last year - focused more on preventing problem gambling rather than just minimising it.
“Our mission is to take every moment and touch point and make them all safe for our guests to ensure that the entertainment aspect - which is obviously key to the integrated resort and its model - is enjoyed by all our guests and those who are vulnerable, those that are subject to harm are identified when they exhibit those behaviours.
“But as part of this program, we are going one step further and putting in place plans that actually prevent that from occurring in the first place. And this is where we believe we are going above and beyond.”
Initiatives currently being introduced include mandatory carded-play and pre-commitment
systems at Crown Melbourne, cashless gaming on electronic table games at Crown Sydney, $10 maximum bet limits on electronic gaming machines at Crown Perth, and a new resorts-wide online self-exclusion portal.
Dr Wiebe said tackling gambling harm is complex and there are often many factors at play.
“While our knowledge and understanding of gambling harm has deepened over the years, the introduction of new reforms and expanded support for vulnerable or at-risk players will make it easier for guests to manage and play within their personal limits,” she said.
“Gambling safety features like mandatory carded-play, time and spend limits, and online self-exclusion are some of the many tools being implemented to support guests to play safely.”
The changes follow Stephen O’Bryan, KC, - the special manager the Andrews government appointed to oversee Crown Melbourne following the Victorian royal commission’s damning findings into the group - releasing his third six monthly report into the company.
Mr O’Bryan has been tasked with testing Crown’s reform program after the group previously facilitated money laundering and organised crime - including sex slavery and human trafficking.
In his report, Mr O’Bryan said: “An area that needs considerable improvement is Crown’s approach to handling complaints to ensure any concerns raised by customers and other members of the public are properly recorded, considered, and responded to”.
“An audit by Crown to identify how its public complaints handling policies, systems and practices can be improved will be independently monitored and assessed by the OSM (Office of the Special Manager),” Mr O’Bryan said.
Crown is obligated to implement longer-term reforms to prevent gambling harm and crime at the casino. Under the Victorian government’s reforms, Crown must include a mandatory pre-commitment scheme, a new responsible gambling code of conduct, and restrictions on the use of cash at the casino by December 2025.
Mr O’Bryan will submit his final assessment in January, which will play a “key role” in the Victorian Gambling and Casino Control Commission’s decision on whether the company is suitable to hold a Victorian casino licence.
More Coverage
Clarity needed on WiseTech succession planning
WiseTech founder Richard White might have settled a legal case with one of his former lovers but investors are still pushing for greater clarity on the tech firm’s succession planning.
Watchdog on the trail of Mineral Resources boss
ASIC is interested in the outcome of an internal inquiry launched by the MinRes board into Chris Ellison’s admission that he once cheated on his personal tax obligations.