The Victorian Parliament’s upper house approved on Tuesday the extension of the Crown Melbourne casino resort (pictured) gaming licence from 2033 to 2050.
The extension is part of a wider number of reforms that include the removal of the super tax on commission-based play for international and interstate VIP players from next year. The deal with the Victorian government had first been announced in August.
Crown Melbourne is the largest casino in Australia and is managed by Crown Melbourne Ltd, a unit of Australia’s Crown Resorts Ltd. Crown Resorts, headed by Australian billionaire James Packer, is one of the two controlling shareholders of Macau-based gaming operator Melco Crown Entertainment Ltd.
Victoria’s Casino and Gambling Legislation Amendment Bill 2014 also allows for more gaming tables and gaming machines across the floors of the casino.
The number of tables will increase from 400 to 440, but only 10 of the new tables will be allocated for VIP play. The casino operator will also be allowed to increase the number of fully automated table game terminals from 200 to 250. The property will also be able to add 128 new gaming machines to its floors.
The new agreement obliges the casino operator to make a series of additional payments to the state amounting up to AUD910 million (US$794.6 million) depending on the casino’s performance, by way of lump sum payments, instalments and additional tax revenue.
A controversial point in the amendment was the inclusion of compensation payable to the casino operator if gambling laws in the Australian state are tightened.
The compensation could be paid if the government removes or reduces the current exemption to a smoking ban within the VIP areas of the casino or if there is any adverse impact on earnings before interest, taxation, depreciation and amortisation (EBITDA) derived from a decision to reduce maximum bets on table games or to tighten rules on problem gambling.
The compensation will be calculated based on the annualised negative impact on the EBITDA, but will not exceed a cap of AUD200 million, according to the amended regulation. The maximum ceiling will be adjusted every year for inflation.
Greg Barber, member of the Victorian Greens in the parliament’s upper house, had called the compensation clause “absolutely extraordinary”, the Guardian newspaper reported. Mr Barber predicted that casinos in other Australian states would now push for a similar deal.
The parliament’s green light comes ahead of a general election in the state scheduled for November 29.
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”Assuming that our [Tigre de Cristal] phase two project and the other future operators’ development plans remain on track, we may see the benefits of a ‘cluster’ effect [in the Primorye Integrated Entertainment Zone] as early as 2021”
Summit Ascent, lead developer of Tigre de Cristal