When James Packer sold Consolidated Media’s 25 per cent share in Foxtel to Rupert Murdoch’s News Corporation in June, his agenda was laid bare for all to see. Not content to follow in his late father Kerry Packer’s footsteps as a media mogul, James is now on track to become Australia’s next gambling tycoon.
Monopoly is the driving factor in Packer’s decision to sell and Murdoch’s decision to buy. It grants Mr Packer the funds to make his tilt at The Star casino and Barangaroo, and hands Mr Murdoch further command of the Australian media industry. By selling Consolidated Media’s share in Foxtel, Mr Packer has laid the foundation for an all-out assault on the Sydney casino scene. He can now use the $1 billion generated in the selling off of his Foxtel share to consolidate his designs on Echo Entertainment and Barangaroo.
While the ACCC continue to investigate News Corporation’s takeover, Mr Murdoch has managed to tighten his stranglehold on Australian pay television at a time when he has suffered a character assassination in court over the UK phone-hacking scandal. Meanwhile, Mr Packer is devising how to increase his shareholding in Echo Entertainment, owner of The Star casino. This is the planned prelude to Mr Packer’s grand master plan of a $600 million casino in Barangaroo – the prime real estate location on the Sydney Harbour waterfront.
Federal independent politician and anti-gambling advocate Andrew Wilkie is forthright in his view about the Barangaroo plan. Mr Wilkie said: “I don’t believe Sydney needs a second casino. It means Australian people are spending money they don’t have.”
“The nature of casinos has changed. They used to be a place where you would dress up and have a night out. They have now become poker machine barns,” he said. Mr Packer’s ownership intentions with Echo have been documented in detail; none more so than Mr Packer’s ferocious and ultimately successful bid to fire Echo’s chairman, John Story in June. Why? Because the gambling tycoon didn’t like Mr Story’s agenda.
“He’s following the money,” Mr Wilkie said. “The question is ‘why is investing in gambling so lucrative?’”
In the knowledge Echo won’t grant Mr Packer’s Crown Limited outright control of the organisation, it is widely predicted the 44-year-old will adopt a new technique in coming months. It is a tactic known as ‘creeping’. Currently sitting at a 10 per cent shareholding in Echo, Mr Packer has set his sights on 25 per cent and is said to be content to take the maximum three per cent permitted every six months, and ‘creep’ his way there in the process.
Needing approval to buy beyond ten per cent of Echo, the NSW Independent Liquor and Gaming Authority will decide whether Mr Packer can buy beyond his current level of ownership . A spokesman for the Authority said: “We really can’t say much at the moment. Crown Limited’s application is under consideration.”
As a major player in an assortment of Asian casinos, Mr Packer is aware of the merits of aligning himself with powerful Malaysian group, Genting, who appear to hold an expansion agenda similar to Packer’s. Analysts have predicted Packer will share majority ownership of Echo with Genting in the not too distant future, forming the basis of an expansion of his casino empire.
Already holding a 50 per cent share in Melbourne’s Crown Casino, Mr Packer has further plans to have a stake in four casinos in Queensland, including a brand new casino on the Gold Coast, and has already received cautious support from Queensland Premier Campbell Newman.
