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The fallout from the humiliating royal commission into Crown Melbourne’s operations continues, with the Crown Resorts flagship property now facing the prospect of new gambling laws that could effectively end the long-running Aussie Millions tournament. Loss limits and cash usage restrictions at Crown Melbourne are intended for slot players, or “pokies,” as they are known in Australia, but the new rules will almost certainly be extended to other aspects of the casino’s operations shortly.
Crown Resorts was found ineligible to hold a casino operating license for any of its Melbourne, Perth, or Sydney locations after a two-year investigation (which had just opened at the time of the investigation). However, after Crown demonstrated a willingness to change, including nearly completely replacing its Board of Directors and executive directors, those regulators permitted it to continue operating in Melbourne and Perth. One of the conditions for Cthe rown’s continued operation in those two cities was this.
Crown Sydney, which cost AU$2.2 billion to build in Barangaroo, opened its doors on December 28, 2020. However, the high-roller-focused casino’s grand opening date has yet to be announced; the grand opening is scheduled for August 8, 2022. The Crown Sydney was built in Barangaroo.
The Australian government is the target of 33 recommendations made in the Bergin Inquiry report, which highlighted Crown Resorts’ catastrophic failures. The majority of these have already been implemented, but the most recent additions are extremely restrictive, despite some arguing that they are necessary.
To begin with, Crown Melbourne customers who intend to play on the casino’s slot machines must first establish a personal loss limit. The amount is completely up to the player, but the new rules may force the Crown’s hand and force them to set a limit. Furthermore, the computerized gaming machines at the casino will track how much time each player spends gambling.
Second, the amount of money that can be used to play slots at Crown Melbourne is strictly limited. Clients who intend to spend more than AUS $1,000 in cash must present photographic identification. The current maximum is AU$1,000.
Crown Resorts’ total revenue includes a significant amount of revenue generated by “pokies.” Crown Melbourne saw a significant drop in sales and earnings in the fiscal year 2021 as a result of COVID-19-related closures. Crown Melbourne reported a 90.5% decrease in revenue for the first half of the fiscal year 2021 compared to the previous year. Electronic gaming machine revenue contributed AU$23.4 million to the total.
Crown Melbourne’s gaming floor has approximately 2,600 gaming terminals, despite having only 10% of the state’s total of 26,321 gaming machines.
Why Might a Change in Rules Affect the Future of the Aussie Millions?
This latest flurry of new laws and regulations may spread to other aspects of Crown Melbourne’s operations, such as the popular casino table games and poker room. Crown Melbourne’s bottom line will suffer as a result of these customer-imposed loss limits and cash usage restrictions. However, the company is in the business of making money, and these cash usage restrictions and customer-imposed loss limits will harm the company’s bottom line. The casino will have to make up the difference, especially now that the group is under new ownership. The American investment firm Blackstone Group became the new owners of The Cosmopolitan of Las Vegas in late June 2022 after completing a AU$8.9 billion takeover.
It’s difficult to imagine Blackstone’s accountants allowing the company’s primary source of revenue to suffer without compensating elsewhere. Even though there are strict regulations governing the number of slot machines permitted on the premises—Crown cannot simply install another few hundred machines—there may be room for additional casino table games or other elements that bring in guaranteed money.
When compared to slot machines and table games, poker does not generate nearly as much revenue for casinos. Even the most prestigious poker tournaments, such as the 2020 Aussie Millions Main Event, do not generate large sums of money. As an example, consider the main event of the 2020 Aussie Millions.
It attracted 820 attendees who paid a total of AU$10,600, with $600 collected as ra ake. That amounted to AU$492,000 in rake for a single tournament, which appears to be a lot on the surface, but take into account the staffing costs and the fact that those 820 players paid $600 in rake but probably not much else for the week they were grinding. Both of these factors reduce the tournament’s total rake to AU$480,000. If you removed more than 90 tables from the casino and replaced them with blackjack, roulette, and baccarat, you would most likely make more money and would only need a few employees to run the games.
What is causing Crown Melbourne’s problems?
In 2019, Crown Resorts’ largest shareholder, James Packer, offered to sell 19.99% of his stock to fellow businessperson Lawrence Ho of Melco Resorts, based in Macau. This was the start of the Crown Resorts saga. The late Dr. Stanley Ho was a powerful man who once controlled Macau’s casinos. He was, however, heavily involved in triads and organized crime in the region. Lawrence Ho is the late Dr. Stanley Ho’s son. However, according to the New Jersey Casino Control Commission, Stanley Ho’s ties to the triads were so strong that he was denied a gambling license due to the extent of these ties in 2009. Stanley Ho denied any such connections existed until his death on May 26, 2020.
During the establishment of its Sydney casino, Crown Resorts signed an agreement with New South Wales authorities stating that it would have no business dealings with Stanley Ho or any of the numerous other firms to which he and his people were connected. Even though Lawrence Ho’s father is Stanley Ho, Packer believed Lawrence Ho had no commercial ties to his troubled father. Lawrence Ho was discovered to be a company director for one of the blacklisted companies, prompting the investigation.
As the investigators dug deeper into the inner workings of Crown Resorts, they discovered numerous instances of illegality, including money laundering, tax evasion, and unethical business practices. Crown’s operations were investigated by a royal commission, the highest level of investigation possible, and even more flaws were discovered during this investigation.
Crown Resorts was fined AU$80 million after the company was found to be unfit to hold a gambling license. The company now owes another AU$100 million in fines. An investigation conducted by Crown Perth that was very similar to the one described above revealed very similar flaws and concerns.
Since then, the organization has undergone a slew of changes and reforms, including the formation of a brand-new Board of Directors and changes to the way the company does business. It will no longer use “junket operators” to bring in high-profile Chinese businesspeople, for example. Let us hope that any future changes do not result in the Aussie Millions being permanently canceled.
The following are the main events from the previous ten Aussie Millions tournaments
The Australian Millions has long been a fixture on the live poker tournament calendar. The best poker players frequently traveled directly from the PokerStars Caribbean Adventure (PCA) to compete in the Aussie Millions festival, most notably the AU$10,600 Main Event, which has a long tradition of taking place each January.
Since his victory in the year 2020, Vincent Wan has held the title of champion. Lam took home the prize money of AU$1,318,000 (US$910,447) after defeating 820 other competitors. Bryn Kenney, Toby Lewis, Ari Engel, and Ami Barer are among those who have won the Aussie Millions Main Event.
The 2021 Aussie Million has been canceled due to the COVID-19 pandemic. In 2022, a similar situation occurred, with Crown Melbourne’s main page simply stating “on hold until further notice.”