Crown Resorts Shifts Strategy from Casinos, Drawing Inspiration from Las Vegas
Giant casino company Crown Resorts from Australia is planning to shift its focus away from casino gaming in the coming years towards enhanced hospitality and entertainment offerings. The organization, which is controlled by American private equity firm Blackstone, revealed this move this week.
Crown's CEO, Ciaran Carruthers, told The Australian that they've watched how integrated resorts around the world have prioritized non-gaming revenue over the years, and they want to move in that direction as well. Carruthers said their goal is to reduce reliance on table games and pokies, or slot machines, in their three resorts - Crown Melbourne, Crown Perth, and Crown Sydney.
Blackstone CEO since July 2022, Carruthers admitted that Crown has fallen behind other casinos in offering more non-gaming attractions and amenities.
Navigating Scandals and Inquiries
However, Crown Resorts has faced regulatory scandals and government inquiries in recent years, culminating in a determination that the company is unsuitable to possess gaming licenses in certain Australian states. Despite this conclusion, the government allowed the company to keep its concessions, given that it would undergo necessary updates to comply with anti-money laundering safety measures and accommodate government monitors in their operations.
In response, Crown reshuffled its C-suite and board, and has continued to make changes to its gaming operations. Minimal details on how much money the company will invest in these updates have been disclosed, but Carruthers said it will be "in the many hundreds of millions of dollars." This investment could bring entertainment enhancements, better food and beverage options, hosting/sponsoring of live sports events, and expanded wellness offerings.
A table game dealer turned CEO, Carruthers is now dealing with a lot of scrutiny of his performance as Crown's top executive.
Gaming Pioneer and Billionaire Founder
Crown was founded by billionaire James Packer, and the casino company now receives financial support from Blackstone - the world's largest alternative investment management company with over $1 trillion in assets.
Blackstone stepped in to save Crown during its scandals and near-loss of gaming licenses in 2022, paying over $6 billion for the casino group. Crown incurred more than $450 million in fines from the inquiries, while Blackstone allocated an additional $133 million to revamp the company's regulatory controls.
Blackstone is also a major player in the Las Vegas market as the landlord of Bellagio, The Cosmopolitan, Aria, and Vdara, leasing their operations to MGM Resorts International. They previously owned Mandalay Bay and MGM Grand, which they leased to MGM as well.
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