Heavyweights battle to be Sydney's king of gambling
While Echo Entertainment rebuilds, James Packer prepares as the tussle for control of Sydney's casino market comes to a head amid allegations of bullying, sexual harrasment and political favouritism.
Transcript
CHRIS UHLMANN, PRESENTER: It's the latest punch in a fierce brawl over a highly lucrative casino market, marked by claims of bullying, sexual harassment and political favouritism.
Today the owners of Sydney's only casino appointed a new chief executive, charged with trying to rebuild the company.
It's a tough job. Echo Entertainment has lost just about every bout with gambling tycoon James Packer, who now has his own Sydney casino project afoot.
When it opens it'll be the culmination of a decades-long campaign to be Sydney's gambling heavyweight.
Adam Harvey reports.
JAMES PACKER, CHAIRMAN, CROWN LIMITED: I spent a lot of time in casinos as a kid with my dad.
(Laughter from audience)
And I ended up thinking, "F***, this must be a good business."
(Laughter and applause from audience)
ADAM HARVEY, REPORTER: He's done it in Melbourne, Perth, Vegas and even Macau, but perhaps more than anywhere else, he wants to do it in his hometown.
JAMES PACKER (archive footage): Let's not be insulting; of course we would love to build the Sydney casino and of course we would love to operate it.
(Present) This is more than economic for our company. We are gonna try and build something special. I've lived in Sydney all my life. This city has been very kind to my family for many - for many, many years.
ADAM HARVEY: After decades of frustration, Mr Packer looks like achieving his goal. It's taken a relentless campaign against Sydney's existing casino, The Star, deeply personal attacks on rivals and a backroom lobbying campaign that's led to claims of political favouritism and a dud deal for the state's taxpayers.
This was supposed to be Star's year to shine. Its tired image got a $800 million makeover and a star-studded relaunch.
But any positive publicity was drowned out immediately by The Star's battle with the Office of the NSW Premier. The casino's general manager was accused of sexual harassment. One of the alleged victims was the partner of the Premier's key advisor. The Premier's Office was furious when The Star's management released embarrassing text messages between the advisor and Mr O'Farrell.
With The Star reeling, James Packer saw the opportunity to get his hands on the casino's crucial Sydney licence. He launched a bid to buy up to 20 per cent of The Star's owner, Echo Entertainment. And as he was building up his stake in the company, he launched a brutal advertising blitz targeting Echo and its chairman John Story.
NEWSPAPER HEADLINE (male voiceover): "No more excuses, Mr Story."
NEWSPAPER HEADLINE (female voiceover): "The Star fiasco is not over yet."
NEWSPAPER HEADLINE (male voiceover): "John Story's poor leadership is hurting Echo."
ADAM HARVEY: Echo cracked under the pressure. John Story and chief executive Larry Mullin resigned.
STEPHEN MAYNE, SHAREHOLDER ADVOCATE: Chairman of Star John Story was rolled by his own board to try to put an end to this vicious, expensive advertising campaign. So it was a brutal campaign and clearly the Packers are playing for keeps.
ADAM HARVEY: Regulators are still weighing up whether to approve the Packer bid to take 20 per cent of Echo. They've been considering the bid for five months and are due to rule at any moment. But Mr Packer may no longer need a stake in Echo.
The State Government has effectively cleared the way for him to get a second Sydney casino licence.
Out of nowhere, the Coalition Government invited Mr Packer to propose a new hotel and casino on prime Sydney land at Barangaroo.
BARRY O'FARRELL, NSW PREMIER: He's put a proposal forward that is unique, that would see a six-star hotel - something this city doesn't have - located at Barangaroo, and yes, part of that proposal would be for this Asian high rollers room.
ADAM HARVEY: The plan is for three floors of card tables, no poker machines and an invitation-only door policy.
STEPHEN MAYNE: The idea that you'd issue a gambling licence through an unsolicited proposal and without a public tender is frankly ridiculous. It's an insult to any nation of proper process and good governance.
CLOVER MOORE, LORD MAYOR, CITY OF SYDNEY: It's the worst possible way to deal with an incredibly important site that's owned by the public. It's not owned by the Liberal Party. The public owns this site. And the Government should go through a proper process.
ADAM HARVEY: NSW Premier Barry O'Farrell says this is not the product of a backroom deal.
BARRY O'FARRELL: Through this whole process stage one assessment, it's been done at arm's length from the politicians, oversighted by the secretaries of both Treasury and the director general of both premier and cabinet. The second stage being oversighted by David Murray, the former chairman of the Future Fund. We're very keen to ensure there's proper probity around this process.
ADAM HARVEY: Critics of the plan are irrelevant because of the success of Mr Packer's lobbying team led by veteran operatives from the right-wing of the ALP - Labor's former national secretary Karl Bitar and former Gillard Government minister Mark Arbib.
The pair helped Mr Packer win over the state MPs who could have blocked a second Sydney casino licence, including one of the nation's most unlikely gambling converts, the Reverend Fred Nile.
FRED NILE, CHRISTIAN DEMOCRATIC PARTY: Mr Packer arranged - made a phone call and said, "Would you like to come and talk to me?"
ADAM HARVEY: The morals campaigner and long-time gambling opponent was won over during a trip to Mr Packer's Crown Casino in Melbourne.
FRED NILE: It was my own expense. I told him I wanted - I don't believe anybody. Said I wanted to see it myself first-hand and I'll pay for my own fare down there. So it's not all the images of, like, Las Vegas where you got roulette rules, hundreds of poker machines and females hanging around and so on. It's a different atmosphere, from what I've seen, in Melbourne at Crown Casino.
ADAM HARVEY: It's a G-rated casino.
FRED NILE: Yes, G-rated, not X-rated.
ADAM HARVEY: Almost two decades after James Packer began his campaign to get a Sydney casino licence, he's now got some options: at Barangaroo or via The Star. Barry O'Farrell denies he's playing favourites.
It was alleged that you'd said that you wanted to smash Star. Now this decision will do that, won't it?
BARRY O'FARRELL: No. Firstly, I don't believe I ever said that. Secondly, the fact is that nothing that's being proposed and considered by this process affects any arrangement that Star has. So Star has the licence to operate a casino in Sydney. It has an exclusivity arrangement until 2019 and none of that would be affected by the proposal that's currently being assessed by the group chaired by David Murray.
ADAM HARVEY: Do you agree that this decision will do great damage to Star?
BARRY O'FARRELL: No, look, I think competition is a good thing. Competition gets people to sharpen their pencils and lift their performance.
ADAM HARVEY: Echo's announcement today shows that it's trying to get back into the game. In former MGM Grand boss John Redmond, it's chosen a veteran of the world's toughest casino market, Las Vegas.
VAS KOLESNIKOFF, AUST. SHAREHOLDERS' ASSN: Obviously, these are challenging times for the company, so the appointment of a new CEO to lead the company forward is extremely positive and necessary to stabilise.
ADAM HARVEY: Success in Vegas may prove easier than tackling James Packer on his home ground.
CHRIS UHLMANN: A G-rated casino doesn't sound all that exciting really. Anyway, Adam Harvey with that report.
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