Nov. 12 (Bloomberg) -- Crown Resorts Ltd., the Australian gaming company controlled by billionaire James Packer, won final approval from the New South Wales state government to develop a casino in Sydney’s Barangaroo precinct.
The agreement between the state and Crown is consistent with the conditions set down in the government’s initial approval in July, New South Wales Premier Barry O’Farrell said in a statement yesterday. Melbourne-based Crown Resorts will operate a gaming resort restricted to “VIP” clients and will provide tax payments of at least A$1 billion ($938 million) in the first 15 years of operation, according to the statement.
Crown’s proposed casino and hotel tower at Barangaroo on Sydney Harbour will be its first site in the city alongside resorts in Melbourne and the West Australian capital of Perth. The project will compete with Echo Entertainment Group Ltd., which has been the city’s only casino operator.
“Crown Sydney will help attract Asian high net worth travelers to Sydney, in particular from China,” Packer, who’s the company’s chairman, said in the statement.
Crown climbed 0.8 percent to A$16.77 at 10:17 a.m in Sydney, extending gains for the year to 57 percent. Echo dropped 0.4 percent to A$2.45, taking losses for the year to 29 percent. The benchmark S&P/ASX200 index rose 0.5 percent and is up 16 percent for the year.
Crown’s development, which will be operational from November 2019, will have 350 hotel rooms and suites, 80 luxury apartments, restaurants and bars, and conference rooms, according to the company.
A government-appointed independent assessment committee earlier this year found that “the Crown project would result in an estimated 1,250 additional jobs after construction, increased international tourism, and an increase in gross state product of A$442 million per annum by 2025,” O’Farrell said in the statement. “The NSW Government will introduce legislation into Parliament this week to enable approval of the new restricted gaming facility at Barangaroo.”
The agreement includes conditions that there will be no poker machines in the casino or low-limit bets on table games, the government said.
Packer is Australia’s second-richest individual, trailing iron-ore heiress Gina Rinehart. His net worth has increased 30 percent so far this year to $6.6 billion, according to the Bloomberg Billionaires Index.
Crown’s net income fell 23 percent from a year earlier to A$396 million in the 12 months ended June, it said in August. Melco Crown Entertainment Ltd., the Macau casino venture of Packer and businessman Lawrence Ho, posted Nov. 6 third-quarter earnings that missed estimates after high-stakes gamblers spent less. Earnings before interest, taxes, depreciation and amortization rose 39 percent to $315.2 million, including adjustments, Hong Kong-based Melco Crown said in a statement.
To contact the reporter on this story: Iain McDonald in Sydney at firstname.lastname@example.org
To contact the editor responsible for this story: Andreea Papuc at email@example.com