Place your bets: A second Sydney casino is coming

NSW government looks set to approve plans for casino

a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Billionaire James Packer looks likely to get his own Sydney casino licence  – Sydney’s second – according to media speculation.

The Australian Financial Review (AFR) has reported that the NSW state government is expected to give the go ahead for Packer’s Crown Limited (ASX: CWN) to receive a casino licence for its new six-star hotel complex to be built at Barangaroo on Sydney’s foreshore.

The NSW opposition has confirmed that they will support the project, subject to some key conditions. These include no poker machines, a fair return to the state, no intrusion into the public space at Barangaroo and Echo Entertainment Group (ASX: EGP) continuing to hold its exclusive licence until 2019. With support from both sides of politics, it appears official approval is now just a formality.

Crown has already signed an exclusive agreement with Lend Lease Limited (ASX: LLC) to build the $1 billion hotel and entertainment complex, that will include a VIP or high-rollers gambling facilities.

Given Crown no longer needs Echo’s cooperation for its casino plans, the question is what will Crown do with its 10% holding in Echo? Will Crown still proceed with its plans to acquire up to 25% of Echo, and what will Echo do?

Given there are still six years before Crown gets its hands on the licence, it may still proceed with its plans to influence Echo’s future and gain a measure of control over Echo’s casino licence. After all, what’s better than one casino licence but two?

Echo faces six years of business as a monopoly with Sydney’s only casino licence, but it faces some issues in 2019, when its licence expires. Labor spokesman Luke Foley has told the AFR that parliament would not legislate to create a casino duopoly. Instead, casino licences could be open to competitive tender.

Two Sydney casinos could still exist, with Crown focusing on high rollers/VIP gamblers, and Echo’s The Star casino focusing on everyday punters. Echo’s shareholders appear concerned, with shares in the company dropping 6% this morning.

If you only invest in one company this year, make it our “Top Stock for 2012-13”. Operating in two hot markets — one set to double by 2012, the other predicted to grow 5x over the next five years — this stock is a solid growth play that also boasts strong recurring revenue, zero debt, and lots of cash. Get its name and full research case in this brand-new FREE report.

More reading

Motley Fool writer/analyst Mike King doesn’t own shares in any companies mentioned. The Motley Fool’s purpose is to help the world invest, better. Take Stock is 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. Click here now to request your free subscription, whilst it’s still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

asx share price competitions represented by businessmen arm wrestling
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

person reading news on mobile phone
⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »