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Tensions mounting between Crown Casino and Echo Enterntainment

It’s probably not too controversial to say The Star Casino in Sydney and Melbourne’s Crown Casino are Australia’s very best casinos (and they’re more than just casinos, of course, with their luxury hotels, bars, restaurants and entertainment venues).

It’s fair to say, as well, that the companies behind the casinos, Echo Entertainment and Crown Casinos, are two of the biggest players in Australia’s gaming industry. And they’ve been at odds with one another for a while.

James Packer, son of media mogul Kerry Packer and owner of Crown Casinos, hasn’t helped calm things down by being outspoken in the press. He hasn’t made a secret of his opinions on topics as diverse as investment in China, gaming regulation here in Australia, availability of flights to major Australian cities, and, of course, the relationship between Echo and his own Crown Limited.

There is a feeling that the timing is right for a takeover of Echo – the company has been involved in a scandal this past month that has affected its share price, and the benefits of the recent huge investment in the renovation of The Star haven’t hit the accounts books yet, but will begin to soon.

Crown seems to be making all the right overtures, this week doubling its share in Echo Entertainment to 10% (the maximum permitted by Echo’s constitution). Even more telling was an application to New South Wales authorities for permission to exceed the 10% cap.

The spectre of a takeover of Echo by Crown Casinos raises some interesting questions for the state of casinos in Australia. We’re not at all sure whether or not a virtual monopoly would be a good thing for gamblers here at home, but there are few who will deny the ambition of Packer and Crown’s plans to lure Chinese VIPs – and the tourism trade that comes with them – to Australian shores.

And it has to be said that Crown is already a giant on the gaming scene in Asia, with investments in the Macau gambling hub and throughout the Pacific. We can’t fault their huge investment in Australian Casinos, either, as the new Crown Perth amply demonstrates. We’ll have to wait and see – anything that means more world-class casino resorts in Australia is fine with us...

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