SYDNEY -- Brisbane may yet earn its affectionate name of BrisVegas, if the State Premier gets his way, with the city potentially getting a second casino.
Queensland Premier Campbell Newman has suggested that it will consider allowing a new casino to be built, once the Executive Building and the Public Works Buildings in Brisbane are demolished, as it looks to revitalise that part of the city.
Speaking at a business conference, Newman suggested that they could knock the buildings down and then run a tender process to build a new five-star hotel, or a casino, and it could be Brisbane's answer to Crown Limited's (ASX: CWN.AX) casino, hotel, and entertainment complex in Melbourne.
According to the Courier-Mail, Echo Entertainment Group (ASX: EGP.AX) was planning to build a 36-story riverside casino, but the government knocked that proposal back earlier this year. Echo already owns Brisbane's only casino, Treasury. A second casino could have a negative effect on the Treasury's revenues, especially if they were built fairly close together.
According to press reports, Newman has previously met with major Echo shareholder and Crown chairman James Packer to discuss the proposal. Packer is in the process of selling his 51% stake in Consolidated Media Holdings (ASX: CMJ.AX), as he moves out of media into gaming. It's likely that the proceeds from that sale will allow Mr Packer to take a bigger stake in Echo. Crown owns 10% of Echo currently, but has requested approval from the regulators to increase that up to 25%.
Packer appears keen on getting a new casino built in Sydney as part of his plans for a six-star hotel at Barangaroo, on Sydney's waterfront. He may need Echo's casino licence to do that, hence the move out of Cons Media.
News Corp. (ASX: NWS.AX) has offered around $3.50 per share for Cons Media, but is waiting on a possible bid by Kerry Stokes' Seven Group Holdings (ASX: SVW.AX). Seven already holds 24% of Cons Media.
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Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. The Motley Fool's purpose is to help the world invest, better. Take Stock is The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, while it's still available. This article contains general investment advice only (under AFSL 400691). Authorized by Bruce Jackson.