CROWN Limited (ASX:CWN) has won conditional approval to undertake a high-rise casino development on Sydney Harbour, trumping fierce rival Echo Entertainment Group (ASX:EGP).
The companies at the centre of Sydney’s casino war have both entered trading halts this afternoon to prepare announcements in response to NSW premier Barry O’Farrell’s announcement.
James Packer’s Crown was the favourite to come out ahead in the battle over competing casino plans for the city and it today its $1 billion Barangaroo South proposal was given a conditional green light to move to the next stage of the approvals process.
“This decision follows months of hard work by Crown to develop its proposal for an iconic six-star hotel resort on Sydney Harbour at Barangaroo South,” a delighted James Packer says in a statement to the ASX.
“The Crown proposal will give Sydney a landmark hotel it can be proud of. Barangaroo South represents a spectacular opportunity to showcase an iconic six-star hotel resort which will be located on the harbour’s best available site.”
“Sydney is one of the world's great cities; it deserves one of the world's great hotels. I want this building to be instantly recognisable around the world and feature on postcards and memorabilia promoting Sydney. That’s how you attract international tourists, create jobs and put Sydney on the map.”
EGP released its own plans for a $1.1 billion upgrade to its Star Casino in an effort to convince the government to restrict CWN’s casino operations at Barangaroo to high rollers.
An independent steering committee, chaired by former chair of the Future Fund David Murray assessed both proposals with the assistance of Deloitte Access Economics. Ken Handley QC, a retired judge of the NSW Court of Appeal, provided further supervision and advice.
The economic assessment shows Crown’s contribution to gross state product (GSP) and tax is 26% higher and 31% larger than Echo’s proposal. It will result in about 1,250 jobs after construction and a $442 million annual increase in GSP.
While the economic benefits are significant, the government says the opportunity to bring competition into the market is the decisive factor.
An assessment by Murray’s found Sydney was underperforming compared with Melbourne in the international gaming market.
The CWN proposal will move to stage 3, but with conditions.
It will not be permitted to include poker machines, or low limit bets on table games and will cater for VIP gaming for members only.
O’Farrell says the process is not complete and an agreement has not been reached and further approvals and public consultation will be required.
Stage 3 of the process involves negotiation of final binding offer and finalisation of all outstanding issues with a view to entering into a binding agreement, if the government decides to accept the final offer.
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