Packer’s punt on casino

James Packer’s Publishing and Broadcasting is believed to be laying the groundwork for a casino play in NSW – a move that would give it a truly national gaming business.

PBL already has a presence in Melbourne and Perth and has long been rumoured as a buyer of Tabcorp, which owns Star City casino in Sydney and Conrad Jupiters on the Gold Coast.

Tabcorp was granted a 99-year licence for Star City in 1994, with a 12-year exclusivity period. That ends in September, which could see PBL lobby the NSW Government for a change in the model to include a regional entertainment casino, possibly in the Hunter Valley, or a second casino. Under current legislation, only one casino can operate in NSW.

One source said that with new arrangements up for renewal in September, „the whole package will be looked at as one“.

The source said that while Tabcorp would still hold that casino licence for 99 years, after September it was possible for a rival casino operator to put their hand up for a second licence.

A spokesman for NSW Gaming Minister Grant McBride said last week that „negotiations in regard to a future exclusivity period have not yet commenced“.

„Irrespective of the expiry of the exclusivity period, under the Casino Control Act 1992, there can be only one casino licence at one site in NSW,“ he said. „The NSW Government’s one casino policy has not changed.“

But another industry source believes PBL may attempt to join forces with a big hotel chain and lobby the Government to open up the casino model to set up a community casino. He said PBL could also push for a second casino licence in NSW.

PBL gaming chief Rowen Craigie said: „Presently circumstances do not allow PBL, or any other company, to open another casino in Sydney. Speculation that another casino may be a possibility in the future is simply that at this stage … PBL does not respond to speculation.“

A tilt at Tabcorp, which is finalising plans to spend about USD 250 million to revamp Star City, has not been ruled out.

Last month investment bank Citigroup said that speculation „abounds that Tabcorp is next to go“ and that PBL was a strong contender in a deal potentially worth up to USD 10 billion.

Tattersall’s is expected to be an interested party in any Tabcorp break-up, which would see PBL keep Star City and Jupiters.

Tattersall’s would end up with Tabcorp’s NSW TAB business and the Victorian gaming arm, despite state rules that require two players in the market.

Las Vegas casino billionaire Steve Wynn also indicated last week that he might have another look at the Australian market.