Today’s Sydney Daily Telegraph story that a second casino licence will be issued in NSW “within days” is highly unlikely. It has been planted in the media as part of the intense bargaining that has been conducted for almost three months between the Iemma Government and Victoria’s Tabcorp, owner of Sydney’s Star City Casino.

Sticking point in the negotiations is the casino’s tax level. The government wants to raise the tax and is threatening to end Star City’s exclusivity as the State’s only casino operator if it doesn’t get the increase it is demanding.

Today’s report about a possible second casino at Rosehill racecourse, the Tweed Valley (just south of the Queensland border) and the Hunter Valley is designed to spook Tabcorp into accepting the higher tax rate and sign a deal for the next seven years.

If an agreement is struck, the following scenario is likely to unfold:

  1. Premier Morris Iemma announces that he won’t allow a second casino in NSW. Crowd cheers and lame-brained editorial writers praise his statesmanship etc;
  2. A Macquarie Bank-led consortium buys Tabcorp;
  3. Macquarie Bank Star City to James Packer’s PBL;
  4. Packer adds exclusive Sydney licence to his Crown casino in Melbourne, his gambling palace in Perth and his overseas operations;
  5. He obtains Sydney’s casino licence without facing a tendering process plus a licence to operate his online betting interest, Betfair. Bingo!

This is how business is done in NSW. The rich and powerful are catered for, screw the doctors and nurses.