Packer slams Echo board for playing the wrong card in casino tussle
James Packer ruled out involving Echo in his plans for a $1 billion casino and hotel development at Barangaroo in Sydney. Photo: Jacky Ghossein
JAMES Packer has hit out at the board of Echo Entertainment, saying its refusal to let him become a director opened the door for Crown's move into the Sydney market.
''All the people who said they should not put me on the board [of Echo] were wrong,'' Mr Packer told BusinessDay.
''They behaved like they had all the cards, but if they had put me on the board I wouldn't have been able to be in discussions for a second licence as it would have been viewed as a conflict.''
Mr Packer also ruled out involving Echo in his plans for a $1 billion casino and hotel development at Barangaroo in Sydney.
''Now we are in a situation where it is not a Crown and Echo proposal it is a Crown proposal for a second licence and so why would we do something with Echo?'' he said.
Having received the backing of the New South Wales cabinet for a casino licence just hours before Echo's shareholders meeting was to be held, Mr Packer did not even bother to send a representative to the AGM to vote his 10 per cent stake.
Echo chairman John O'Neill yesterday told concerned shareholders the company would have the lucrative Sydney market to itself until November 2019.
''In Sydney, we are the only game in town for at least the next seven years and our licence extends until the year 2093,'' he said at the meeting at Echo's Gold Coast casino, Jupiters. ''We will extract every ounce of benefit out of that.''
He promised shareholders there would be ''no more slip-ups or stumbles'' - a reference to a torrid year with the launch of its $860 million investment in The Star marred by the sacking of the casino's managing director for inappropriate behaviour.
Mr O'Neill also insisted that Echo's board was not just ''sitting on its hands'' and he hinted at a strategic growth agenda for Echo, without offering details.
He did not repeat comments from the day before when he had said Echo might apply for another casino licence itself and develop VIP gambling sites separate from The Star.
''This is not the day to be unveiling what we intend to do. We're not going to play our cards,'' he said when queried by reporters after yesterday's AGM.
Earlier, at the meeting, he said: ''We expect to be able to share our growth initiatives in a public forum with our investors and other stakeholders over the coming months.''
Mr O'Neill refused to be drawn by Mr Packer's recent comments that money spent redeveloping The Star was wasted as it was a poor facility.
''Crown and its chairman, Mr Packer, are entitled to express his views about Echo'' but ''we reject his assessment,'' Mr O'Neill said.
Crown owns 10 per cent of Echo and applied to lift its stake to 25 per cent as part of a campaign to partner with Echo for a VIP gaming facility at Barangaroo.
All this is now in doubt after state cabinet approval for the Barangaroo proposal opened the way for Crown to receive a casino licence outright when Echo's exclusivity expires in 2019.
Echo's shares fell for a second day despite the company reporting strong revenue growth at The Star so far this financial year. Crown shares slipped just 3¢ to close at $9.46.
Analysts were not particularly concerned about the implications of Crown planting a VIP gambling facility just hundreds of metres from Echo's flagship casino.
''The risk of a second operator is not fatalistic and is still not 100 per cent certain,'' said Bank of America Merrill Lynch's Mark Bryan prior to yesterday's announcement.
''Echo retains the core grind market assets that drive margins. The competitive threat of a super-high VIP operator at Barangaroo is a setback but not fatalistic and Echo still has a significant number of options to drive returns,'' he said.