Genting lifts stake in Echo

by **Cals** Wed 19 Jun 2013, 10:39

Business & Markets 2013

Written by theedegemalaysia.com

Wednesday, 19 June 2013 10:25

SYDNEY: GENTING BHD [] has increased its stake in Australia’s Echo Entertainment Group, just weeks after rival casino company Crown Ltd sold its 10% in Echo.

According to Reuters, Genting raised its stake in Echo to 6.6% from 5.22% via its unit Genting Hong Kong Ltd, based on a regulatory filing. Financial details were not disclosed.

The increase comes as Crown and Echo wage an increasingly acrimonious war to gain gambling tourists from mainland China in Sydney.

Echo, which holds the sole licence to operate a casino in the harbour side city until 2019, is lobbying for an extension of that exclusivity and an expansion of its Star Casino in an attempt to block Crown’s plans for a high-roller gambling suite.

Crown’s proposed VIP facility is part of a A$1 billion (RM2.98 billion) six-star hotel and residential development on Sydney’s waterfront that majority owner, billionaire James Packer, has said will bring “thousands more Chinese tourists to Sydney that otherwise wouldn’t visit”.

Officials with Echo and Genting could not be reached for comment.

Crown and Echo must submit proposals by June 21 and the government will approve only one — either Crown builds a second casino or Echo remains the sole gambling operator.

Crown’s stake in Echo was widely viewed as an insurance policy, but sources said Packer’s proposal is likely to win favour with the government, reported Reuters.

Genting, through Genting Singapore Plc, unexpectedly cut its stake in Echo last September, giving no reason, but has since applied to increase its stake to above 10%.

The New South Wales state’s gaming authority has yet to rule on that application and has given no timeframe for a decision.

The fight for market share of Sydney’s gaming industry comes as Australia ups its game to woo tourists, which helps lessen its dependence on the mining industry.

Chinese tourists spent US$102 billion (RM321.3 billion) worldwide last year, according to the UN World Tourism Organisation, and contributed some A$3.8 billion to the Australian economy.

Direct tourism contributes A$41 billion or 2.8% of Australia’s GDP and employs half a million people, according to a Reuters report, citing the Australian Bureau of Statistics.

Australian travel agents said Chinese visitors are sold on the country by images of rugged outback and unique wildlife but in reality want casinos, not koalas, the report read.

In line with efforts to win over Chinese globetrotters, Australian Prime Minister Julia Gillard took a high-level delegation to China in April this year and announced an annual trade and tourism fair.

She also agreed to make the Australia dollar only the third currency to be directly traded against the Chinese yuan after the US dollar and the yen.

This article first appeared in The Edge Financial Daily, on JUNE 19, 2013.