Michael Pascoe has a good article in the SMH on the awarding of a casino license to James Packer’s Barangaroo development. Casinos are in this sense like taxis and pharmacies. The Government regulates the number, rather than simply specifying minimum standards. So Packer will enjoy a cosy duopoly with Star Casino. As Pascoe writes
If logic was allowed into this structurally dubious situation, the arguments advanced by Packer for granting his Barangaroo licence would mean multiple new casinos should be permitted. If it’s all about plundering mug Chinese tourists, more and competing casinos would lure many more punters and provide a better product. Vegas and Macau haven’t become tourism centres because they have just two casinos. …
But in the great tradition of Australian capitalism, the last thing any big player wants is genuine competition. A monopoly is the ideal, but in field after field, it’s shown a cosy duopoly functions nicely.
My guess is that, given a choice of a rational casino policy and the existing monopoly, Packer would ditch his second licence idea in favour of the monopoly and one way or another come up with the readies to acquire Echo or its Star casino. …
Having decided that it is desirable to have a casino, there is no logic to artificially limiting the number of them. The role of government should be to determine its tax take, set the necessary probity standards and rigorously enforce them. The market then decides the viable number of operators. And all those glittering jobs and opportunities promised by Packer’s television ads can be multiplied.
Before the holy and righteous mount the barricades over such a suggestion, the bigger hypocrisy should be acknowledged: Sydney already has an army of casinos marching out through its heartland, we just chose to call them clubs, supported by the pokie-dependent pubs. The difference between a roulette wheel spun by a dealer and computerised roulette operated by a button is only a matter of aesthetics and operating expense.
New South Wales rejoices in being the state of the biggest losers in the nation of biggest losers.
The Packers are an innovative lot, although they have been very careful to build their fortune on the back of Government favours – usually to keep competitors at bay.
Kerry Packer sold the Nine Network to Alan Bond for $1.05 billion in 1987 and bought it back three years later for $250 million, saying
You only get one Alan Bond in your lifetime, and I’ve had mine.
Kerry was an inveterate gambler, famed for his generous tips and high stakes. On one occasion he was playing in Texas in a high stakes game and a Texan walked in and demanded to sit at the table, saying he was a multi-millionaire worth $20 million. Kerry Packer reportedly said
I’ll toss you for $20 million
Of course James Packer sold off Nine again in 2006 to focus on PBL’s gambling interests. James prefers to own casinos rather than play in casinos.
But Kerry and James (and before them Frank) all had the gambler’s instinct of being able to defeat their opposition by bluffing. No government has yet had the courage to call and see whether they are holding a straight flush or a busted hand. Perhaps Kerry has bluffed St Peter into handing over the keys to the pearly gates?
Apparently the gentleman worth $20 million did not take him up on the offer. Or so the story goes.
Casinos are not something I’m interested in personally, but a closed shop does seem unnecessary. On the other hand, there are unsavoury aspects to the gambling industry.
There are more critical issues if we want to talk about lessening restrictive trade.
While we’re at it, how about a realistic competitor (or more) for Foxtel in the cable TV business? Their prices are double what they should be. NBN? that’s just a bong dream.
And stop the ABC from being a publicly funded competitor for various other commercial enterprises. It’s rationale is not only passe, it’s gone right away from the spirit of the charter and is a threat to our democracy.
likewise, SBS has also outlived its reason for existing and should be canned.
Before we get too picky, we should be thankful that our governments even allow casinos. In the turgid nanny state that is modern Australia our love of a point is the last beacon of hope.
A far more egregious crime is allowing them to change the laws of Black Jack and Roulette to further favour the house.
If Packer didn’t require favoured treatment from the government do you reckon Mark Arbib and Karl Bitar would be on the payroll?
Infidel – do you mean they have added a double zero to roulette (as in the US)? So that there are 38 numbers and a bet pays 36:1 cf previously 37 numbers and the bet paying the same 36:1?
They keep adding numbers to the roulette wheels and doing stupid things like allowing Dealers to push on 22 and having continuous shuffle decks of cards.
Thank God Packer bought Burswood Casino. He’s spent a fortune and made it a desirable venue if not for punting then for entertainment.
I sometimes play poker at the Star and it is very costly (time charge and pot rake) compared to other casinos in Australia and the world. I’m quite sure competition from more casinos would lower the charges.
Unfortunately this new proposal will be a high rollers only casino, so it probably won’t bring much competition.
I miss Kerry. At the zenith of his media power he looks the self important non entities in the Senate in the eye and tells them to go away and root their boots.
This is all bullshit. It is absurd that a pub cannot run it’s own roulette wheel and poker tables.
It would also stop da eebil pokies.