Echo Releases Sydney Casino Plan with Crown Casino Option
Posted on: June 25, 2013, 05:30h.
Last updated on: June 24, 2013, 06:54h.
The battle over Sydney’s casino marketplace took a dramatic turn this week, as Echo Entertainment unveiled a plan that would feature a $1 billion expansion of their existing Star casino in the city. But while Echo had previously appeared to want a monopoly over the city’s casino industry, their latest plan also includes room for a new venue operated by Crown, their arch rival.
Two Plans Offered Up
Echo’s latest proposal is actually two separate plans that they’re willing to offer the New South Wales government. In either of the two scenarios, Echo says that they’d be willing to invest A$1.1 billion ($1 billion U.S.) in order to build two new luxury hotels along with expanding their casino.
The difference between the two plans comes down to what else Echo is willing to give the government and what they’d allow Crown to do in the city. Under their preferred plan, they would pay the government an additional $250 million in order to extend their exclusivity agreement in Melbourne, an agreement that currently runs through 2019.
However, Echo also provided an alternative plan in which they would not make that payment. Instead, they would allow Crown to build a casino in Barangaroo, on the condition that it was a VIP-only facility.
“This alternative may be seen as a potential win-win scenario for the people of Sydney,” said Echo chairman John O’Neill.” If that proposal were accepted, he said, a total of nearly $2 billion would be invested in the city’s infrastructure and hotel facilities.
Crown Fires Back with Their Own Plan
James Packer’s Crown Ltd. has also made a proposal to the state government. While the specific details of that plan are unknown, Crown has publicly stated that they’d like to spend close to $1 billion in order to build a VIP casino that catered to high rollers, along with a six-star hotel and a residential development on the waterfront. The casino would be an effort to pull in more “whales” from overseas, particularly Asia.
According to the New South Wales government, only one new casino plan will be approved. It’s uncertain whether NSW would be willing to accept the Echo compromise plan that expands their holdings while also allowing Crown to build as being “one” project. While it isn’t clear whether one company or the other has an advantage in the licensing battle, some have pointed to the fact that Crown recently sold their 10 percent share of Echo as a sign that they were confident of earning the state’s approval.
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