Sydney faces a choice on casino development: Redmond - BRW (subscription)

John Redmond says that Echo’s vision is for an integrated resort. Photo: Glenn Hunt

Echo Entertainment chief John Redmond says Sydney faces a choice between two different casino proposals – his company’s proposed integrated resort on the western edge of the city that would draw Asian families, or rival Crown’s casino that would not.

Redmond, who told Financial Review Sunday that Echo was prepared to spend “upwards of a billion, if not more,” on the unsolicited proposal it has made to NSW authorities in competition Crown’s high-profile Barangaroo plan, laid out his idea of what Sydney needs in a speech last week.

Middle class families from China and south east Asia were visiting a destination such as Singapore for the facilities such as hotels, shopping, bars and restaurants, theme parks, and live shows that were part of the city-state’s integrated resorts and Echo’s plan was for a such a venue on the edge of Sydney’s CBD, Redmond said.

“Looking at our Asian neighbours, there is no doubt that integrated resorts do make a difference to tourism,” he said in a speech to the Sydney Business Chamber last week. “Echo’s vision for Sydney is to replicate such an integrated resort complex with scale to compete with the best in the region, in the new feature entertainment precinct of the city.”

This was a far cry from Crown’s proposal, he said.

“Does Crown Barangaroo really warrant the tag an ‘integrated resort’?” he said. “The proposal is offering a 350-room hotel, which will provide a 1.4 per cent increase in Sydney’s hotel room capacity. Integrated resorts . . . [are] a place international tourists can bring the whole family and everyone: wife, husband, kids of all ages can be entertained in different ways . . . and it includes a casino. This is not what we understand has been proposed by Crown for Barangaroo.”

Crown last month said its proposed structure, with 350-room hotel and invitation-only gambling facilities, would be designed by UK-based firm Wilkinson Eyre Architects. The company said it was not worried by Redmond’s comments.

“Sydneysiders should judge Echo and Crown on their tourism record; Crown is one of Australia’s most successful tourist operators – attracting over 25 million people every year to our Australian resorts,” Crown Resorts said in a statement to BRW on Monday.

“The Star has had 17 years to make a significant contribution to Sydney’s tourism infrastructure and has failed dismally. Echo has yet to deliver the return on their previous investment in The Star and their latest attempt to fix the facility has been pulled together at the last minute purely to block Crown.”

Echo’s proposal for Sydney, which Redmond said would be made public after June 21, the deadline set for submission of unsolicited bids by the state’s independent assessment panel, would commit the company to a hefty capital spend on top of the $870 million it has just made in renovating its existing casino in . It has also said it is prepared to spend $1 billion to expand its existing casino licence in Brisbane.

While the sums involved could be large, they wouldn’t necessarily cause a problem for Echo, Nomura analyst Nick Berry said.

“They can easily find $1  billion through existing cashflow and debt facilities for Sydney,” Berry told BRW. “If the two were to kick in at the same time, I suspect they would have to raise equity, but it’s highly unlikely if both were to go ahead that there would be 100 per cent overlap on funding requirements. They would be staggered over a number of years. I don’t see many speed bumps on funding.”

The assessment panel led by businessman David Murray is expected to make a decision on which of the two competing plans   Crown’s or Echo’s   will proceed by the end of June.