Crown Resorts realises James Packer’s dream with Barangaroo’s gaming floor

Sydney’s VIP-only casino is finally opening – more than a decade after James Packer dreamt up the idea over lunch with former NSW premier Barry O’Farrell at Alan Jones’s house.

Crown Resorts will finally open the doors of Sydney’s VIP-only casino on Monday – more than a decade after James Packer dreamt up the idea over lunch with former NSW premier Barry O’Farrell at Alan Jones’s house.

While the troubled casino company has chosen one of the luckiest days in the lunar calendar – the eighth of the eighth – to open the gaming floor, it isn’t placing all its bets on cashed-up Chinese gamblers.

Crown Sydney chief executive Simon McGrath has revealed a more diversified strategy in attracting rollers that also taps into Australia’s domestic market as it rebuilds its pandemic-decimated VIP business.

It comes after Crown’s new owner Blackstone toured league and RS clubs in western Sydney as part of its due diligence for its $8.9bn takeover of the company. Blackstone executives mingled with gamblers and their chicken schnitzels, steaks and schooners in what seemed a world away from the luxury of Crown’s $2.2bn Barangaroo resort, where the nightly room rate tops $1000.

But the tour provided a valuable insight into Sydney’s gaming market.

“The ability for any good business is to have diversity in its market segments and not rely on one too heavily, and I’ll think you’ll see that in a city such as Sydney and with such a luxury product. It will appeal to many different markets,” Mr McGrath said.

“As you could imagine, we follow the border openings with the tourism sector and we will follow those markets that open. They won’t be the long-haul markets of Europe initially but they will be closer to home throughout South-East Asia.

Crown Sydney chief executive Simon McGrath with VIP host Hannah Knights and dealer Peter Oliver. Picture: Jonathan Ng

“We’ve got a strong domestic market and that’s a very important part of our business as well.”

Mr McGrath said this strategy had already “exceeded expectations” for Barangaroo, which unlike other Sydney gaming venues will not have a poker machine in sight.

“We‘ve been really pleased with the level of interest, both from members that were signed up already and the expression of interest that has come through. So there’s a very, very strong indication that we’ve exceeded expectations at this stage that would lead us to feel fairly confident that there’s a strong VIP market.”

The auspicious opening date recognises how Mr Packer’s dream almost evaporated when Crown was declared unsuitable to hold a NSW casino licence after the explosive Bergin Inquiry found the company facilitated money laundering and other organised crime.

Following the inquiry, and two others in Victoria and Western Australia, Mr Packer is no longer Crown’s dominant shareholder.

While a Victorian royal commission into Crown recommended Mr Packer reduce his holding to 5 per cent within two years, he sold his entire 37 per cent stake to Blackstone, reaping about $3.3bn.

But Mr Packer has confirmed he will move into his $60m apartment at Barangaroo next March. “I can’t wait to see Crown Sydney, and to be in Sydney with my kids and with Eri,” Mr Packer told The Australian in June.

Blackstone has planned the gaming floor’s opening carefully. As Mr Packer was declaring his excitement to move into his Barangaroo apartment, the NSW Independent Liquor and Gaming Authority granted the company conditional approval to begin gaming operations.

ILGA chair Philip Crawford said “pages and pages” of rules for Crown – although the specifics had not been released as they were “probably commercial in confidence. Crucially, Mr Crawford said if the regulator is not satisfied that Crown has reformed itself, it could still be found unsuitable to hold a NSW casino licence when the conditional period ends in 18 months.

In other words, the licence is now for Crown to lose, a notion that is not lost on Mr McGrath.

“We‘ve got a very strict level of probity, customer awareness, operating protocols and shifting customer safety and in health,” he said. “We will continue to work with the Independent Liquor and Gaming Authority and that will continue evolving over time as you would expect. So we‘ve got a very heavy remediation program in place and that remediation program won’t necessarily finish once we get suitability.”