Crown and Star in Battle for Sydney Gamblers

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Tuesday, August 22nd, 2017 | Written by Shane Larson

Along the famed Sydney Harbor, Star Entertainment Group Ltd has enjoyed a privileged position as the area’s sole gambling resort, but its monopoly is about to run out next year, with Crown Resorts Ltd already poised to take advantage of the situation by building a lavish casino resorts on an inlet of the Sydney Harbour Bridge. In the meantime, Star has authorized a A$1 billion upgrades to its own current casino, with the development heralding an imminent struggle in the competitive battle for private gaming rooms, roof top pools and fine dining in the affluent district.

Crown versus Star

Australian billionaire James Packer is attempting to build a $2 billion six star hotel and casino before the year 2021 on some of the hottest pieces of real estate on the Sydney Harbor. Packer originally secured support from authorities for a new casino by pledging to attract ultra rich Chinese players, but with the promotion of gambling in mainstream China experiencing a restriction, Crown is now looking at a plan to try to compete with Star for less wealthy customers looking to play poker, blackjack and baccarat gambling games. These major casino companies will therefore basically be trying to compete for the same type of customers, and as GamePlan Consultants founder Sudhir Kale, explains:

“Barangaroo is going to basically get into the grind market of Star, the table-game players.”

Chinese Woes

The contribution to both Star and Crown from high stakes overseas gamblers was made apparent last year when Chinese officials arrested a number of Crown workers in China. A court in Shanghai subsequently convicted 19 former and current staff of the company for allegedly engaging in the illegal promotion of gambling on the Chinese mainland, with their jail sentences running as high as ten months.

Needless to say, since this crackdown occurred, Crown has stopped almost all of its regional marketing in China which helped to direct big stakes gamblers to Australia. Crown’s share of international high roller profit in Australia has since gone down from 70 percent in 2010 to now just to 39 percent. Because of this damaged business model, most of Crown’s revenue is now thought to be coming from local Sydney players, instead. In the meantime, Sydney is also facing competition since resorts popping up around Asia are also trying to get gamblers in from China, including those based in the Philippines and Vietnam.

Uncertain Future

The race is now on to see who can be the most successful hotelier and casino owner in the Sydney Harbor area, and it’s going to be a tight call. This is especially true with the market currently focusing more closely on local players. The question subsequently arises as to how their business revenues will be affected by having fewer big spenders to frequent their venues, and whether all the money and investments will ultimately be worth it. The answers to these pressing concerns remain to be seen.

Online Gambling Ban

In other Australian gambling related news, this month the country’s upper house of parliament gave its final approval to the Interactive Gambling Amendment Bill 2016 which was passed by the Senate back in March. As a result, a blanket ban on internet gambling in Australia is set to go into effect on September 9th, with most of the major gambling operators having already exited Australia’s lucrative market, including PokerStars which announced its decision via an e-mail to its Australian customers.

PokerStars was also quick to reassure its players that there funds were “safe and available for withdrawal”, whilst expressing its hope that one day it would be able to return with a fully approved Australian iGaming license. Nevertheless, no such body exits to apply for such a license for the time being. As PokerStars subsequently explained in its email:

“We’re proud to have seen the Australian poker community grow so strong over the last decade. We do respect the Australian Government’s decision in taking steps to protect consumers and hope that in time we’ll be able to serve real money poker to you again. In the meantime, we will continue to offer play money poker and we hope to continue to welcome many Australian players to our tables.”