Tabcorp Holdings has an exclusivity agreement with the New South Wales government which is due to expire in September. The 12-year deal was worth A376 million (US$316.7 million) and negotiations to extend the agreement are continuing between Tabcorp, the Treasury, and the Department of Gaming and Racing. It has been suggested that NSW may consider a second casino licence, ending exclusivity for Star City.

Tabcorp acquired the Star City hotel and casino, a major entertainment complex in Sydney, from Harrah’s in 1999. In a prime position on Darling Harbour the casino houses traditional table games and the maximum 1500 gaming machines allowed. Some analysts believe that Tabcorp will be granted further exclusivity for up to 10 years as the NSW economy would probably not support another casino, but a new casino could bring as much as A$3 billion to the state.

The NSW government is keeping the possibility in play as a bargaining chip. It will hope to make additional financial gain, maybe from increasing taxes, allowing more slot machines at Star City or giving exclusive rights to certain games. At present the casino pays less tax than pubs and clubs. The negotiations underway commenced last week and neither side is commenting on progress. Plans by Tabcorp for a 5-star 300-room high roller hotel with retail space, gaming and conference facilities are due to go before the Planning Minister. (E-06.18.07)

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