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Brisbane is the next battleground for Echo and Crown

The stage is set for Brisbane to be the next battleground in the ongoing saga between Echo Entertainment (ASX: EGP) and Crown (ASX: CWN) for dominance of Australia’s east coast casino revenue. Queensland’s deputy premier Jeff Seeney has set up meetings with Echo and Crown executives to discuss the redevelopment of the city’s government precinct and the possibility of a second casino in the city.

Echo, which owns the existing Treasury Casino in Brisbane and two other casinos in Townsville and the Gold Coast, understandably believes there is no space in the market for another casino. Meanwhile, Crown’s CEO James Packer has been in the media labelling the Echo assets a ‘disgrace’ and promoting competition in the Brisbane market. Mr Seeney has called for calm between the two and was quick to point out that the discussions were “at the beginning of a very long process”. A decision is expected in September.

Mr Seeney’s statement came at the end of a week where Echo Chairman John O’Neill publically called on Mr Packer to reveal his account of a secret meeting held on his yacht earlier in the year, where Mr Packer is alleged to have agreed to stay out of the Brisbane market if Echo did not stand in the way of Crown establishing a Sydney casino at Barangaroo. The serious allegations by Mr O’Neill could land both in jail on charges of bid rigging if Echo is found to have not genuinely competed for the Sydney casino tender earlier this year.

Foolish takeaway

Whatever the outcome in Brisbane and in court, investors can bet that the ongoing public bickering between Crown and Echo will continue in the coming months. Echo will be hoping that luck is on its side and key decisions start to be awarded in its favour or its shareholders, reputation, and earnings will suffer.

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Motley Fool contributor Andrew Mudie does not own shares of any companies mentioned in this article.

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