BUSINESS

Coalition rejects Aussie gambling law changes; Packer out to destabilize Echo

TAGs: Australia, Crown Ltd., Echo Entertainment, James Packer, Tony Abbott

australia-online-gambling-law-packer-echoChanges to Australia’s online gambling law may be on hold following Coalition leader Tony Abbott’s statement that he won’t support the Labor government’s proposed reforms, which include an online poker trial and the introduction of online in-play betting. At a press conference on Thursday, Abbott reached deep into his bag of rhetoric, describing online gambling as “a dark cave into which people can so easily retreat, and there they are beyond help.” (Abbott apparently believes your living room is Sleepy Hollow, Mordor or the set of Saw VIII.) Abbott said Prime Minister Julia Gillard’s “blatant back-down on [Labor’s] pledge not to liberalize online gambling” would mean “every computer is a casino, every smart phone is a poker game.” This was a scenario that was “not on, as far as the Coalition is concerned.”

Appearing gleefully alongside Abbott was longtime anti-gambling campaigner and Independent Sen. Nick Xenophon. The day before, Xenophon made a statement about former Victorian premier Jeff Kennett – the man Crown Ltd. boss James Packer wants to install on the board of Echo Entertainment. Echo runs Sydney’s Star Casino and gaming joints in Queensland, so Xenophon thought Kennett’s presence on Echo’s board would be inconsistent with his role as chairman of depression counseling non-profit Beyond Blue. Kennett admitted he had “no doubt” that some of Beyond Blue’s clientele arrived there “depressed because of their gaming habits,” but countered by saying this was a situation where “being inside the tent, you might be able to have more impact on the policy of a business that is involved in gaming.” Bottom line: Kennett wants the Echo gig.

Trouble is, Echo Entertainment chairman John Story – the man whose seat Kennett is supposed to fill – isn’t going without a fight. The Daily Telegraph quoted Story saying he had the full support of the board and wasn’t entertaining any notions about stepping down. According to regulations, the extraordinary general meeting Packer has asked for must be held before the end of July, at which time shareholders will decide the pair’s fate, which we hope they announce like a finale of Australia’s Got Talent, with Kennett and Story standing up on a stage, anxiously clutching each other’s hand.

Story believes his ouster is the opening move in Packer’s evil plot to acquire control of Echo without paying a premium for the shares. (The Australian’s John Durie referred to it as Packer “destabilizing” Echo’s board.) Crown currently holds just under 10% of Echo, the same amount as investment group Perpetual. Both parties have applied to boost their stake beyond that level. Perpetual fund manager Charlie Lanchester said there was “absolutely no way” Packer would get control of Echo without paying a premium. Then again, Perpetual also holds 8% of Crown, which wouldn’t exactly be harmed by adding a casino monopoly in another Australian territory. And having someone as politically connected as Kennett on Echo’s board could help grease the legislative wheels to permit construction of a second Sydney casino aimed at the extremely lucrative Chinese VIP market. Decisions, decisions…

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