Gambling

Twirling towards freedom

The Casino Wars

In the final week before Echo Entertainment and Crown are due to present their proposals to the NSW government, the state’s casino war should be winding down. NSW Premier Barry O’Farrell doesn’t seem to think it will though, and has warned rival operators Echo Entertainment and Crown to “take a cold shower.”

In theory, the process of choosing who controls the state's future casino market should be a simple one. An independent committee chaired by respected businessman David Murray has been set up to assess the rival proposals and advise the government accordingly. Presently, Echo’s The Star is the sole casino operator in Sydney, and the company has asked for the state government to extend its license beyond 2019, promising to invest more than $1 billion to further develop the existing precinct. James Packer’s Crown is proposing a “high roller” casino, also with a $1 billion-plus price tag attached to it, across the harbour as part of the Barangaroo development. Both firms must submit their plans to the government by June 21, which will then choose only one to proceed with.

Here’s where it gets complicated.

Early last week, Echo Entertainment chairman John O’Neill spoke out against a “cheap smear campaign” against the company, after a disgruntled former employee revealed details of an enquiry into the behaviour of Echo chief executive John Redmond. It was alleged that Redmond had fallen asleep in one of The Star’s bars after drinking heavily, only weeks before taking over the position of chief executive. CCTV footage was closely reviewed and Redmond was cleared of any wrongdoing.

Another conveniently timed strike against Echo was Crown’s decision to sell its $264 million stake in the company last month, sending Echo’s shares to an all-time low.

Then last Tuesday, Echo launched a newspaper advertising campaign, headlined "We're aiming higher for Sydney,” which prompted O’Farrell to prescribe the two casino operators a cold shower. (Crown too, of course, has their own expensive advertising campaign, touting the company’s ambition to build the world’s best six-star resort on Sydney Harbour.)

O’Farrell’s attempt to emphasise the independence of David Murray’s committee, free from the sway of advertising and public opinion, would be a commendable one, if only it weren’t for a set of documents revealed last October.

Obtained under a Freedom of Information request, the documents listed a series of “key messages” for the chairman of the committee, suggesting a range of “positive” answers that should be given to “negatively framed” questions from the media about Crown’s proposal. The key messages were finalised by a deputy-director in O’Farrell’s department, undermining all the Premier’s assurances that the assessment of the two casino proposals is being done at arm’s length from the government. One anticipated question listed in the document is, “There are numerous casino operators who would love to have a casino licence in Sydney - what's so special about Crown and why not an open tender?'' The suggested reply defends the government’s decision to deal exclusively with Crown rather than go to open tender. Because the Barangaroo hotel site was an open tender process, the company with the winning bid – Lend Lease, not the government – chose which casino operator to work with.

The very public war between Echo and Crown has been a welcome change from gambling’s traditional political battleground, in back rooms and private meetings. Once Murray’s committee makes its decision though, O’Farrell may just find that he has a whole new war to fight. 

 

Michaela McGuire

Michaela McGuire is a journalist and the author of Last Bets: A True Story of Gambling, Morality and the Law and the Penguin Special A Story of Grief. Visit her blog, Twirling Towards Freedom.

@michaelamcguire

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