ACCC on scent of Packer’s ‘secret deal’

The competition regulator is investigating an alleged secret proposal by James Packer to keep his Crown casino empire out of Brisbane if the executives of Echo Entertainment, owner of the Star, agreed to let him into the Sydney market.

Central to the investigation is an alleged statement from Mr Packer that Crown would stay out of Queensland if Echo ”behaved” itself ”vis-a-vis Sydney”.

An Australian Competition and Consumer Commission official said the investigators would look into potential breaches of competition and cartel law, following reports of a secret meeting between Mr Packer, who is the executive chairman of Crown, and Echo chairman John O’Neill, on Mr Packer’s boat on Sydney Harbour in March this year.

Investigators at the ACCC began the inquiry after an article in The Australian Financial Review on Thursday, in which Mr O’Neill says Mr Packer said Crown would not bid for a casino in Brisbane – where Echo was hoping to expand – if the owners of the Star did not hinder his desire to build a luxury casino at Barangaroo.

”James Packer categorically said that if we behaved ourselves vis-a-vis Sydney, he would stay out of Queensland,” Mr O’Neill said.

”The chairman of Crown said that he was 110 per cent confident of winning Crown Sydney at Barangaroo.”

The allegations made by Mr O’Neill are now under investigation by the regulator.

”We would always look into such serious competition law issues as those raised by some of the statements in that article,” an ACCC official said.

Competition law forbids activities such as bid rigging, when two or more competitors agree they will not genuinely compete for tenders, and market sharing, when competitors agree to divide customers or areas between themselves rather than competing with each other.

Both actions are considered cartel conduct, and could be subject to criminal penalties, including up to 10 years in jail.

Crown has disputed Mr O’Neill’s account of the meeting, which it is understood was attended by Mr O’Neill, Mr Packer, Echo chief executive John Redmond and former federal sports minister Mark Arbib, who is advising Mr Packer on the Barangaroo casino proposal.

A spokesman for Crown said: ”Mr Packer refutes the claims made by Echo, saying they are untrue.”

At the time of the meeting, Mr Packer had a 10 per cent stake in Echo, which he sold in May. News of the ACCC’s inquiry follows last week’s decision by the NSW government to end Echo’s casino monopoly in Sydney by backing Crown’s plans for Barangaroo. It was favoured ahead of the rival proposal to expand the Star.

The two companies are also facing a turf war in Brisbane, with competing plans to build a new casino in the central business district. Echo already owns casinos in Brisbane, Townsville and the Gold Coast.

Should the ACCC decide to pursue Mr Packer, it would be the highest-profile cartel case in Australian corporate history since its 2005 investigation of packaging giants Visy Industries and Amcor. Under the ACCC’s immunity policy, Amcor escaped penalties by co-operating with the investigation, while Visy and its late owner, Richard Pratt, were fined $36 million.

The original release of this article first appeared on the website of Hangzhou Night Net.