ECHO Entertainment chief executive John Redmond has accused rival Crown of mislabelling its proposal for Sydney's Barangaroo site as an integrated resort when it really planning a "casino on steroids" on public land.
Hitting back after billionaire Crown chairman James Packer ordered the sale of a 10 per cent stake in Echo and mooted plans to challenge Echo's Queensland properties, Mr Redmond said the Crown proposal amounted to a plan for a second large casino for Sydney, rather than the "boutique" gaming facility or integrated resort initially proposed.
"Now the 'hotel' is only a small part of the project, which has substantially become a casino," Mr Redmond told a private business lunch in Sydney today.
"The casino tower is on steroids and the podium appears to be over-running the public open space, filling in a large part of the Southern Cove. The boutique VIP gaming facility is clearly now a significant casino at risk of over-running Barangaroo."
Mr Redmond said the gaming floor would be about 10,000sq m, about the size of two football fields.
But that the proposed accommodation of 350 hotel rooms would only add 1.4 per cent to capacity in Sydney and fell short of an integrated resort offering several hotels of different quality and entertainment options for whole families.
"So no, it is not an integrated resort - and with 350 rooms simply cannot have a material impact on tourism - no matter how tall it is or how many luxury apartments it accommodates.
"It simply does not offer the scale and diversity of attraction required to draw the Chinese middle class in large volumes as has been claimed."
It stood in contrast to Crown's flagship property in Melbourne, with 1600 hotel rooms and diverse attractions.
Mr Packer is bidding to end the monopoly held by The Star at Pyrmont, across the harbour from Barangaroo, since 1995 when its exclusivity agreement expires in 2019.
Last Thursday he sold a 10 per cent stake in Echo at $3.20 a share, taking an estimated $38 million loss on his investment, to end speculation that he had a "plan B" to joint venture or take over Echo if his proposal is knocked back. He also mooted a plan to take on Echo in Brisbane, where it is proposing a redevelopment of the existing Treasury casino.
Echo shares are trading at a record low $2.98, down 5c following the sale, triggering large losses for those who bought the shares last Thursday.
Echo plans to unveil its own plan to rival the Packer pitch when the deadline for unsolicited proposals passes on June 21. A committee headed by David Murray, the former Commonwealth Bank of Australia managing director and previous chairman of the Future Fund, will make a recommendation on which proposal can go through to the next stage.
Mr Redmond also warned that once Crown secured the Sydney casino it could expand by concession creep.
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