The NSW Labor Party has threatened to withdraw its support for Crown Limited’s (CWN.AX) Sydney casino, because of government secrecy over key aspects.
The NSW government is considering a proposal by James Packer’s Crown to build a $1 billion six-star hotel at Barangaroo, on Sydney’s waterfront, which is planned to contain a high-roller gaming room. Crown has already signed a deal with construction company Lend Lease Limited (LLC.AX) to develop the project.
However, the government is keeping secret key aspects of the proposal, including an independent report by accounting firm Deloitte commissioned by Premier Barry O’Farrell, according to The Sydney Morning Herald (SMH).
The report was to look at the potential economic benefits to the state, while a separate panel, chaired by former banker David Murray is also considering its benefits. Labor says there is no reason the report should not be publicly released, but the government claims it is a cabinet document.
Labor’s planning spokesman has told the SMH, ‘‘While Labor has approached the Crown proposal with an open mind, ongoing secrecy on the part of the government will make it difficult for Labor to give the proposal bipartisan support in the Parliament.”
More than of NSW voters oppose a second casino in Sydney, with Echo Entertainment (EGP.AX) and its Star Casino at Darling Harbour holding Sydney’s exclusive casino licence. According to a Nielsen poll, 56% of those polled were opposed to it, with 38% supporting it and 6% undecided.
The premier has confirmed that if the government proceeds with Mr Packer’s proposal, it will introduce legislation to grant Crown a gaming licence for a casino targeting Asian high rollers, and without poker machines. That could have a major impact on Echo’s earnings, as well as damaging the value of its casino licence.
Without the support of Labor, the government would need to seek the support of cross-bench MPs, as the Greens are opposed to having a second casino.
Despite Labor’s objections it appears that it will only be a matter of time before the government approves Crown’s proposal and legislates to allow a second Sydney casino, albeit only focused on high rollers and not allowing poker machines.
Looking for a few fantastic small-cap ASX ideas? Discover two under-the-radar opportunities now, including names, codes, and a full investment analysis. Simply click here to download your FREE copy.
The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. Motley Fool writer/analyst Mike King doesn’t own shares in any companies mentioned.