Crown Resorts Chews Over Capital Gold Club Offload Over Financial Struggles

Controversial gambling and hotel group Crown Resorts is mulling over the potential sale of its prestigious Capital Gold Club in Melbourne, Australia, in an attempt to stabilize its finances. The group faces financial difficulties due to the decline in high-roller clients. Designed by celebrated golfer Peter Thomson and opening its doors in 1997, the 18-hole course was reserved for elite clientele, like Tiger Woods and Celine Dion. However, it has seen dwindling usage after the COVID-19 pandemic. It has also suffered from the crackdown on junkets from China, which previously provided wealthy clientele.

Building Interest

Crown acquired Capital Golf Club in 2013 for AU$ 67.6 million (45.9 million USD) under former Chair James Pucker. The gambling and hotel group is now owned by Blackstone, a private equity headquartered in New York. Blackstone, which purchased Crown for AU$ 8.9 billion (6 billion USD) in 2022, now considers the golf course non-essential to Crown's core business.

Crown executives have had discussions with several interested parties on the partial or complete sale of the course. Among those who expressed interest in the property are the Fox family, Linfox trucking empire billionaires, and Matthew Tripp, Chairman of Melbourne Storm. Discussions with these parties have yet to result in a formal sale or auction initiation.

If the sale is successful, the property will likely be redeveloped into a luxury golf resort similar to Augusta National Golf Club and Shadow Creek in the United States. Considering the Fox family's history of major property investments, the golf course could also be developed into luxury housing.

Financial Misfortunes

Crown's financial struggle stems from the COVID-19 pandemic and royal commissions in 2021, which uncovered significant regulatory breaches. The inquiries concluded Crown had violated anti-money laundering and counterterrorism laws, costing the group its Melbourne, Sydney, and Perth gambling licenses. It has since regained its Melbourne and Sydney licenses, but it was not enough to offset the financial pressure.

Exploring Other Asset Sales

Capital Golf Club is not the only asset Crown is looking to offload. In July this year, the company sold its 20% stake in the famed Nobu restaurant and hotel chain in an AU$ 180 million deal. Crown has also received inbound interest for its high-end private members casino in London, Aspinall's Club. These sales are expected to boost the hotel group financially while breathing new life into the luxurious golf club and other venues it palms off.