The war for Australia’s hearts, minds and casino riches is heating up.
Action is sharper than ever on the all-important Sydney front with monopoly operator Echo Entertainment and rival Crown Limited pushing competing megaresort proposals for the continent’s largest city.
Fighting also has spread north to the state of Queensland, where Echo is determined to defend a similarly entrenched position against James Packer’s assault.
In the meantime, Malaysian resort giant Genting has strengthened its hand with a fresh investment in ASX-listed Echo.
ASX-listed Crown, which operates resort casinos in Melbourne in the state of Victoria and in Perth in Western Australia, has selected a waterfront site slated for redevelopment on Sydney’s Darling Harbour for a A$1 billion leisure complex with luxury residences, a 150-table casino catering to Asian high-rollers and a six-star hotel that would be the tallest building in the city. Crown Sydney, as it’s called, will bring “thousands more Chinese tourists that otherwise wouldn’t visit,” Mr Packer has said.
Echo, which operates The Star casino across the harbor under an exclusive license running through 2019, is countering with a plan to add significant new non-gaming attractions to The Star as part of an expansion also pegged at about $1 billion.
Both companies were due to submit their plans this week with an advisory panel appointed by the government of New South Wales to pick only one winner. The panel’s decision is expected sometime in July.
Mr Packer’s original plan was to seize control of Echo and the monopoly, and Crown had received regulatory approval in May to buy up to 25 percent of Echo’s shares. Then, late last month, Crown abruptly sold its entire stake in what observers perceive as a statement of confidence in its Darling Harbour bid.
This has opened the door for Genting to increase its stake to 6.6% from 5.22%. The purchase was made via its Genting Hong Kong unit, which is a major casino developer in the Philippines and has been shopping around the region for additional investment opportunities. Genting also has an application pending with NSW to increase its Echo holding to 25%.
In Queensland, meanwhile, Mr Packer is lobbying Premier Campbell Newman to include a casino as part of a planned redevelopment of the government complex in Brisbane, where Echo operates the city’s only licensed casino, the Treasury. Echo is countering there as well with a large-scale development plan of its own. The state is expected to decide on one or the other by September.
Echo, meanwhile, has chosen to defy New South Wales Premier Barry O’Farrell and go ahead with an advertising campaign on behalf of its Sydney bid. O’Farrell has warned Crown and Echo both against trying to sway public opinion, and Crown agreed to refrain from any marketing out of “respect” for that injunction, it said.
But Echo CEO John Redmond defends his company’s “We’re Aiming Higher for Sydney” campaign. “We didn’t embark on our ad campaign to try and influence the outcome of the process. Our rationale for what we are doing is to respond to the pressure we were getting from the public to disclose our plans,” he recently told The Australian.
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