CASINO

Crown makes pitch to Sri Lanka officials, celebrates Sydney casino approval

TAGs: crown resorts, James Packer, Sri Lanka, Sydney

crown-resorts-sri-lanka-james-packerJames Packer (pictured) made his pitch to government officials in Sri Lanka on Wednesday, hyping the benefits a Crown Resorts casino could generate for the country’s tourism industry. Crown and local partner Rank Holdings have proposed building a $400m resort casino in Sri Lanka’s capital Colombo but opposition politicians and Buddhist leaders have protested what they feel are sweetheart tax concessions granted to the project. Longtime casino critic and United National Party MP Harsha de Silva went as far as to call for Packer’s arrest when he arrived in Colombo this week to address the Commonwealth Business Forum.

To no one’s surprise, Packer wasn’t clapped in irons after deplaning, and his speech to the Forum reiterated a theme he voiced at Crown’s recent AGM: the disruptive influence of a rapidly expanding Asian middle class. In addition to China’s 300m or so middle class residents, Packer said India’s middle class “currently stands at around 170m and is estimated to be growing by 40m to 50m per annum over the near term.”

Packer said Sri Lanka is perfectly situated to tap into these twin titans of the Asian middle class, but only if the country is willing to “work hard to meet the market with the right tourism offering.” Packer said Singapore’s model of mixing “luxury hotels, signature restaurants, quality entertainment, casinos and high-end retail” indicates the correct formula to attract Asian tourists, who are looking to satisfy “all of their travel needs under one roof.”

PACKER GETS NSW APPROVAL
Closer to Packer’s home, the government of New South Wales (NSW) has granted final approval to Crown’s pitch to build a $1.5b VIP-focused gaming spot in Sydney’s Barangaroo district. Monday’s announcement that Crown had been granted a 99-year license to operate in Sydney was a tad anti-climactic, given that Premier Barry O’Farrell has not taken all that much trouble to hide his enthusiasm for Crown’s project, which will end Echo Entertainment’s Sydney casino monopoly when it opens in 2019. But new details have emerged regarding the full extent of O’Farrell’s Packer-puckering that have set Crown’s critics tongues-a-wagging all over again.

The Sydney Morning Herald revealed that O’Farrell’s government has introduced legislation that would restrict the ability of the Independent Liquor and Gaming Authority (ILGA) to oversee the types and number of games offered at Crown’s Sydney casino, as well as its ability to control the times and days the casino can operate. Furthermore, should there be any change in gaming taxes during Crown’s Sydney stay, the government would be on the hook for compensating Crown accordingly. If this or any other “adverse regulatory event” occurs in the first 20 years, Crown would be owed a multiple of pre-tax earnings, while any changes after that initial phase would be compensated on a “just terms” basis.

Greens MP John Kaye, who believes Packer’s Sydney quest “was a done deal from the outset,” said O’Farrell’s legislation “sweeps aside obstacles” for Packer, while O’Farrell’s spokesman countered that the terms were necessary “to provide investment certainty” for Crown’s Sydney project. For his part, Packer is attempting to ingratiate himself with his new neighbors by pledging $60m in grants to Sydney’s arts community – half coming via the Crown Resorts Foundation and half from the Packer family – to be paid out over 10 years starting in 2014-15.

Comments

views and opinions expressed are those of the author and do not necessarily reflect those of CalvinAyre.com