Malaysian conglomerate Genting has raised its stake in Australian casino operator Echo Entertainment from 5.2% to 6.6%. Genting companies acquired a total of 9.9% of Echo last year, and while Genting Singapore sold its 4.8% stake in September, Genting nonetheless applied for regulatory approval to boost its stake to 25%. Monday’s 11.4m share purchase, the price of which was not disclosed, was made through Genting Hong Kong and comes nearly two months after rival operator Crown Ltd. sold its 9.9% stake in Echo at a loss.
Echo is presently waging a nasty war with Crown boss James Packer over which company will win a heads-up battle for Sydney casino bragging rights. Echo has promised to spend close to $1b expanding its Sydney casino into a proper integrated resort if NSW premier Barry O’Farrell will extend The Star’s monopoly past 2019. Crown wants to spend $1b building a VIP-focused casino in the Barangaroo development. Popular theories behind Crown’s Echo sell-off include Crown being more confident of (a) winning a Sydney casino license of its own or (b) regaining its Echo stake on the cheap thanks to what Echo CEO John Redmond referred to as Packer’s alleged destabilization program. Both parties have to submit their final Sydney casino bids to a government committee by Friday (21).
It’s unknown how much Crown’s sell-off may have influenced Genting’s decision to buy, nor whether the purchase means Genting is flying in the face of popular opinion that says Crown will win Sydney’s zero sum game. Even more puzzling is that Genting had the option to take its Echo stake to 10% yet chose a relatively small boost. Genting, which counts among its holdings the global casino brand Resorts World and the set-for-a-$952m-facelift Genting Highlands resort casino in its home territory, likely appreciates that (a) Echo also operates casinos in Queensland, and (b) no matter how many more regional gaming joints open, there’s little danger of thinning the hordes of Chinese tourists looking to get their gamble on.
Further evidence of the Chinese engine driving most tourism planning these days is the proposed life-size replica of Beijing’s Forbidden City an hour outside Sydney. The local Wyong Shire Council inked a deal in December to sell 15-hectares of council property to the Australian Chinese Theme Park Pty Ltd (ACTP) for $10m. The park’s half-billion dollar plans include a full-size replica of the gates to the Forbidden City, as well as a nine-story temple complete with giant Buddha. ACTP chairman Bruce Zhong told Reuters the park “will show our culture in a creative way, this is not a copy.” (Really? It will be interesting to watch China’s reaction when they discover the Forbidden City’s gates are missing.) Construction won’t get underway for at least another year, but the whole shebang will be ready for action by 2020.