MENU

Place your bets: A second Sydney casino is coming

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.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…

Including:

The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!