Its historic premises, built in 1895, were also going to be upgraded with new bars, lounges and a wellness centre as part of the $762 million redevelopment, with the club operating from Castlereagh Street during the five-year construction phase.
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Minutes from the AGM indicate gaming had been the club’s only profitable activity for decades, but revenue was declining because of online gambling, competition from casinos and other CBD venues, restrictive laws and social and political ‘anti-gaming’ pressure.
Veloz said revenue from gaming had fallen by 50 per cent in 2024, which he attributed to the after-effects of the pandemic and the cost-of-living crisis.
“High rent costs, high cost-of-living pressures and the impact of previous rate rises that are now catching up with most of us are just some of the factors that impact discretionary spend, which is what a club like City Tatts relies on,” he said.
“These issues are not unique to us; great restaurants, pubs and large hospitality chains have closed and are closing at a rapid rate.”
City Tatts has played a significant role in the life of Sydney throughout its almost 130-year history. However, the decision to redevelop its Pitt Street site and relocate the club to Castlereagh Street has been disastrous, with gaming revenue and patronage falling away alarmingly.
The Sydney City Tattersalls club around the late 1970s.Credit:
“The costs and time associated with a project of this size, in turbulent economic times can only be withstood by solid, long-term investors who can play the long-term game,” Veloz said. “City Tatts is not in that league, and the best decision for the club is to exit and start again.”
Veloz said the club’s fortunes “are not where we want them to be” but it at least had an asset it can sell, unlike many other businesses in similar circumstances.
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“The sale will allow the club the opportunity to restructure, reset and rebuild its future,” he said.
Veloz defended the club’s board and management, which he said had always acted appropriately and with the best interests of members in mind.
“We are simply subject to difficult times, like many businesses in the CBD, and we are transparently doing all that we can to ensure the club remains part of the fabric of Sydney,” he said.
City Tatts is not the only club in financial difficulty. The Kirribilli Club last week was placed in voluntary administration three months after asking its more than 18,000 members to buy $2000 debentures in a bid to purchase its premises overlooking Sydney Harbour.
A ClubsNSW spokeswoman said businesses that have embarked on major property development in the past few years have faced skyrocketing construction costs.
CBD hospitality businesses faced a downturn in weekday trade because of the cost-of-living crisis and fewer workers attending their offices.
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