Inside Asian Gaming speaks with newly appointed Crown Resorts CEO Ciarán Carruthers about the career journey that has led him to the Australian casino giant and how he plans to revive its battered reputation in the wake of recent regulatory inquiries.
Ben Blaschke: Ciarán congratulations on your appointment as CEO of Crown Resorts. Given the regulatory challenges Crown is currently facing and the significant upheaval in both ownership and leadership, how have you approached the role?
Ciarán Carruthers: First of all, thanks for the congratulations. It’s a huge opportunity for me and a great honor really to take up a role like this. I’ve been coming to Crown and following Crown since the temporary joint opened in 1994 and then the full resort in 1997. It’s always been a real beacon in our industry – a true integrated resort going back long before the term was used in Macau – so getting the opportunity to take this up professionally has been fantastic.
From a personal level, with my family having been based in Australia, in Adelaide, for the past 20 years it’s a great fit as well.
In terms of the timing, it’s just an opportunity here. This is a company that has been challenged over the last couple of years, the brand has been damaged very publicly, but it still has fantastic assets and lovely people. I’ve really been blown away by the passion and the commitment and the longevity of some of the team. I’ve met people here who have got 20-year pins, 25-year pins. In that respect it is fantastic coming in and realizing the potential this property has over the next couple of years. But clearly there is a mountain of work to be done on the remediation and transformation. That really is the main focus now.
I’ve been here for three weeks now and almost the entirety of that time has been spent meeting regulators and talking to stakeholders externally to get a good understanding of what we need to do and the areas we need to address, plus reviewing all the work that has been done to date. An awful lot has been done over the past 15 months by [former CEO] Steve McCann and the team.
We’ve brought on some solid horsepower to help with the operations and the transformation work that is the next step in the process as we get through mediation. That is my clear focus, to really turn this mediation and transformation work into something that leads us to become a real gold standard in terms of safe and responsible gaming going forward.
BB: What do you see as your single biggest challenge?
CC: I think tech is going to be a huge challenge. Some of the new technology that we’re going to have to develop over the next couple of years to do what we need to do [to satisfy new responsible gaming and anti-money laundering regulations] just doesn’t exist today, so we’re working with various vendors and suppliers in making sure that we fully understand what the requirements are, that they fully understand what the requirements are and are able to work with us on the development of that within the time frames that we have. In some cases we have some pretty tight timelines. The good thing is that the stakeholders externally, they understand that and they are working with us. It’s good for them to see, and they have seen, that our trajectory is as it should be, that we are moving in the right direction towards suitability and then transformation beyond that.
BB: Why are you the right person to lead Crown forward?
CC: I’ve been in this business for 30 years – nearly all of that time in Asia and 20 of it in Macau – so I’ve run the world’s largest properties, have run the world’s most luxurious and awarded properties. I had to be responsible for a regulatory environment within Macau for all the publicly listed companies I worked for there to be compliant with the Hong Kong Exchange. The last two companies I worked for (Sands and Wynn) were also US companies so we had to be compliant with various regulatory bodies in other jurisdictions.
So I’ve got great experience operationally across the size and scale and scope and the aspirational nature of where Crown needs to be. At the same time, I’ve got a very solid background in the complex regulatory environment that is somewhat unique to Crown across the three jurisdictions here in Australia.
BB: Although you are Irish and have spent 20 years in Macau, you also have a deep Australian connection that many people may not be aware of. Can you provide some insight into that?
CC: I am originally from Dublin, Ireland but I was working in the UK in casinos in Luton and London when an Adelaide-based casino management company was over there in the early 90s hiring people to work on casino ships sailing out of Singapore. So I took a six-month gig at 22 years of age to come out and do that. I ended up staying with that company for 10 years and the last consultancy gig I did for them was to help a new start-up out of Hong Kong called Galaxy [Entertainment Group] which had won a concession in Macau. I was then offered the opportunity to join Galaxy full-time in 2002, which is what I did.
That management company was built by some former senior executives of the Adelaide casino so when they were building their operations in Asia a lot of the people they brought out – pit managers, casino managers and cage managers – were also from the Adelaide casino or had passed through the Adelaide casino.
I just built a very strong connection with Adelaide as a result and the first time I was able to visit, which wasn’t until about 2000 or 2001 with my wife Tess and our two very young kids at the time, we fell in love with the place. We had temporary residency so when the opportunity came for Tess and the kids to get permanent residency, Adelaide was just the obvious place for us to move.
We’ve had Adelaide as our home base for 20 years now and the kids call it home. My son has served in the Army Reserves down there since completing university and my daughter has competed for South Australia in Irish dancing competitions on the world stage. So we’re very proud Irish-Filipinos with a very strong Australian connection. We’re very much part of the culture here.
BB: Let’s go back to your Macau experiences where you enjoyed a close-up view of the city’s explosive expansion following liberalization in 2002. What are your clearest memories of that time?
CC: It was just the sheer explosiveness of the growth there which took everyone by surprise. Post the reopening of Hong Kong and Macau after SARS, ironically, in 2003 and the Individual Visitor Scheme that was introduced at the time to reinvigorate the economy, the growth from 2003 to about 2014 was just phenomenal. And the quality of the products that came to market, the investment in that period of time, the quality of the management that came through, the real acceleration of the service standards. If you remember what the service standards back then were like in casinos, hotels and restaurants, then compare them to what they were like five or six years later as those international standards were brought in … and the change to the regulatory regime with the international operators coming through and bringing standards that they had to operate under internationally. The operators worked very hard with government to bring those standards to Macau and get them up to an international level so everybody could be on a level playing field.
At the time you don’t really appreciate what’s going on around you but now that I’ve had a month out of Macau, looking back on it, you realize the sheer amount of work that was done over that 20-year period. It was quite phenomenal.
BB: You spent time with three of the largest, most recognized companies in the industry in Galaxy, Sands and Wynn during your 20 years in Macau. How have those experiences informed your plans for Crown?
CC: I think if we look at Sands and The Venetian first, just the sheer scale and scope of it, and the absolute necessity to be an integrated team across an integrated resort. I learnt an awful lot in my experiences there that I will absolutely be able to bring to Crown in terms of managing teams across the scale of an organization like Crown and each of the individual properties. Melbourne is obviously a massive business, Perth a significant resort and Crown Sydney is much more akin to a Wynn-style property in terms of its focus on absolute quality, luxury and excellence.
Wynn taught me about that unrelenting focus on the customer experience and ensuring that good enough was never good enough. It had to be beyond expectations, and bringing that attitude and cultural transformation here to Crown, the lessons I learned during that period of time are going to be invaluable to me as I pass them down to the rest of the team.
We’ve brought on some great executives – some from Macau, some from the US, some from Australia – to bolster the already powerful team that we had in place which puts us in very good stead ahead of the transformation work over the next couple of years.
BB: You’ve left a premium, high-end customer focused venture in Wynn to join a company that has just launched its own premium product in Crown Sydney, but at a time where the VIP sector is more challenged across Asia than ever before given the collapse of the Macau junket industry and regulatory scrutiny in Australia. With that in mind, how do you approach the VIP space now?
CC: We’re not in the junket business if that’s part of the question. That’s not part of the plan going forward. We will at some point, as the borders are opening again, welcome back international guests to all of our three properties and Crown Sydney is one of them. I think Sydney as a gateway to Australia generally is going to attract a customer that will find the Crown Sydney property very appealing. It’s the closest I’ve seen to a Wynn-like model in terms of the hardware. The rooms are magnificent, the food and beverage magnificent, and the whole facility is exceptional in the Australian landscape. Certainly up against the very best in Macau it can more than hold its own. So I think as the international markets start opening up again, with the very strict controls we have in terms of KYC and AML, we’ll be able to let qualified international players back in again. That will happen sometime in the future but we’re a long-way off from that right now.
BB: So is there any real activity at Crown Sydney at the moment given the absence of those international customers?
CC: It’s a soft opening right now so we’re working through the processes. We obviously have very strict requirements on entering the casino in line with the regulations in NSW. We’re continuing to improve and refine that. I was there last weekend and there is an incredible buzz on the casino floor. It really is an outstanding facility but in terms of the performance we’re being very slow, very methodical to ensure we have everything in place that we need to have.
BB: Crown has three major properties in Australia in Melbourne, Sydney and Perth. How will you split your time between the three, and given the recent appointments of dedicated property CEOs, how hands-on will you be?
CC: I’ve been spending time at all three properties over the past three weeks and I’m about to jump on a plane back to Perth as we speak. I’ve been to Sydney twice already and I’m living on property here at Crown Melbourne. How that will play out in the future, I still need to work that out. Each of the properties has a CEO who is responsible for that business, so they look after the day-to-day of working with the regulators, working with the stakeholders for those states.
My job over the past three weeks has really been meeting the teams, getting to listen to them, understand their concerns, understand their hopes for the future, the opportunities and challenges that we have, looking at the sites and where the potential is for development. We have some incredible opportunities here in Melbourne and also across at Perth. Sydney is brand new and we’re not going to tinker with that anytime soon, so how my time will finally fall out over the coming weeks and months I’m not sure yet, but I’ll be committed to all three properties.
BB: How have your dealings been with the independent monitors and how has that process worked from an operational level?
CC: The monitors at each property very much deal with the CEOs at property level. I’ve had meetings with them all really just to reiterate my commitment to our remediation and transformation process, and to ensuring that all of our businesses here are run as the safest and most responsible gaming and entertainment venues across Australia in order to become a global benchmark. I have ongoing dialogue with them all but it’s very much being led by the CEOs across each state.
BB: The first report from the independent monitor in Melbourne was quite positive. Are you confident that the company is making steady progress in this remediation pathway?
CC: I think they’ve done an enormous amount of work over the past 15 months and full credit to the team that has done that. They’ve left me with a great platform to continue on the work that is required. So yes, I’m very confident, but I’m under no illusions as to just how much hard work is ahead of us to achieve what we need to achieve which is absolute suitability across all three states by the end of next year.
BB: Crown’s reputation has taken a battering since the Bergin Inquiry and the Royal Commissions. How do you win back the public trust?
CC: That’s something we are working on as part of our whole cultural transformation. The brand has been damaged and tarnished. What we have to do is make sure that when we go out with our message to talk about Crown as we are today, that we deliver on that promise at a property level. We are working through the changes that we need to make at the property level operationally in terms of product offering, service standards, our commitment to responsible gambling, our commitment to security and safety at our properties. We are working through that process now but people won’t believe us just because I tell them we’ve changed. People need to come and see and experience it for themselves. I’m hopeful they will see that very, very rapidly.
BB: How have your interactions with the regulators been. Do you have a sense of how they are viewing Crown’s remediation efforts?
CC: It’s been very positive. They are very pleased with the work that has been done to date but also noting that there is an awful lot of work still to be done. I think they are happy with the changes occurring now, obviously Blackstone coming in as new owners, myself and the rest of the leadership team, the appointments that have been made. They can see that our focus has been on bringing in the very best talent from the rest of the world to make sure we have the type of leadership that can drive that cultural transformation that’s needed and required here. They are not going to give us a free pass on anything. They are very clear in their objectives, very blunt in their assessments where they need to be, but the general sense I’ve received has been one of a great level of positivity around the work that has been done to date.
BB: More broadly speaking, what is your approach to running an operation the size of Crown?
CC: Making sure I have some absolutely brilliant people around me. I’ve always said, in roles I’ve had in the past and certainly in this one now, it’s a general leadership role. My job is not to get down into the weeds – I’m surrounded by subject matter experts who are the very best at what they do. It’s my job to give them leadership, direction and a real sense of stability around the direction we’re moving in going forward. We’re three weeks in, hopefully I’ve set some expectations with the team that that’s what they are going to get from me. I’m not going to get in the CEOs’ ways in terms of how they manage their businesses – they’ve all been hired because they are excellent at what they do.
BB: Finally, when people look back in 5 years’ time at the work you’ve done at Crown, what would you like them to say?
CC: I’d like them to be astounded by what we’ve done. I’m not interested in just getting to suitability and ticking boxes as the minimal requirement to get approval across all the three states, I want people to be genuinely astounded as to the progress we’ve made in terms of completely transforming this company and setting us on the world stage as a legitimate contender for the gold standard, the benchmark. You could argue that my last employer (Wynn) has been that benchmark for an awful long time so I’m sure they wouldn’t mind a bit of competition, it’s always healthy. But I’d like people to look back and say Crown now is the number one, the gold standard in terms of large-scale, luxury integrated resorts.