Billionaire James Packer is one step closer to building his Sydney casino complex after the New South Wales government gave the green light for the Crown project to move to the next stage of development.
The approval follows months of lobbying on behalf of Packer and his team to get the casino project up and running – the $1.5 billion project has been on the cards for years.
But the decision is a blow to Echo Entertainment, which put in a competing bid for a $1.1 billion expansion to its current Star casino. The company’s shares have fallen 5% this morning to $2.76.
New South Wales Premier Barry O’Farrell announced yesterday the government had “conditionally accepted” the recommendation of a committee, saying the project should progress to “stage three” development”.
The third stage of development involves the “finalisation of all outstanding issues with a view to entering into a binding agreement” – essentially a negotiation process.
“The independent steering committee found a competitive casino market would deliver increased tourism and broader economic benefits for NSW,” O’Farrell said in the statement.
The committee was led by former Future Fund chair David Murray and supported by Ken Handley QC.
Crown was contacted by SmartCompany this morning, but no reply was available prior to publication. The company said in a statement to the ASX that Packer was “delighted” the proposal can go ahead.
“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,” he said.
In his remarks, O’Farrell even took a swipe at Echo Entertainment, which operates The Star casino, saying Sydney was still struggling to gain market share in the VIP gambling industry. The statement even said the city had “underperformed compared with Melbourne”.
“The economic assessment observes that Crown’s contribution to Gross State Product and tax are 26% higher and 31% larger than Echo’s respectively.”
“It found the Crown project would result in an estimated 1250 additional jobs after construction, increased international tourism and an increase in Gross State Product of $442 million per annum in 2025.”
The new 70-star resort will employ 1250 people, and feature luxury apartments, hotel rooms and VIP-only gaming areas. If the project goes ahead, it will be completed by 2018.
The approval comes years after Packer’s father, Kerry, failed to win the city’s first casino licence.