Just over 21 years ago now, three well-connected BRW Rich Listers — Lloyd Williams, Ron Walker and Kerry Packer — were awarded the monopoly licence to operate Victoria’s first casino on a prime river-front site in the middle of the Melbourne CBD.
It was controversial from the outset.
On the day the licence was awarded, then-Liberal premier Jeff Kennett used a question from reporter Greg Hoy about problem gambling to justify indefinitely banning his ministers from appearing on The 7.30 Report.
But that was just the start.
Kennett, who was close friends with Crown’s wealthy backers, allowed the consortium to change virtually every single aspect of its winning tender. Multiplex was ditched as the builder and Bruno Grollo got the biggest construction job in Victorian history. Tasmania’s Federal Hotels was ditched as casino manager, replaced by the novices at property developer Hudson Conway. The tendered $750 million proposal was completely redesigned and finished up costing close to $2 billion.
While bidding aggressively to win a tender and then negotiating “contract variations” is standard practice in some industries, The Sunday Age sensationally revealed in August 1994 that Crown hadn’t even lodged the best financial bid in the first place. The rival Sheraton-Leighton consortium was bitter for years.
Things looked even worse when Crown spent $7000 sponsoring the university basketball team of Kennett’s 21-year-old son Edward for a trip to Darwin.
The Crown controversies ran pretty much non-stop all the way through to the 1996 Victorian election, with the Herald Sun even splashing on election morning with a story detailing some property dealings between then-Crown chairman Lloyd Williams and the government-appointed architect who recommended Crown’s bid.
But when the Kennett government was returned with a thumping majority in 1996 it seemed that “casino cronyism” wasn’t a problem for Victorian voters.
By the time the next election came around, the mood had changed. Kerry Packer’s Publishing and Broadcasting Limited had also just bought Crown after it ran into financial difficulties. When the Packers read Newspoll on the morning of the 1999 Victorian election, they rang the ALP offering to make a donation, something which they’d refused during the campaign itself when Kennett was tipped to win easily.
The shock defeat of Kennett saw the PBL share price weaken as investors contemplated a hostile royal commission into the casino tendering process and a less permissive regulatory regime. Alas, long-time Packer lobbyist Graham Richardson swung into action and James Packer sat on the head table with Steve Bracks (look for table 16 from this full guest list) at the biggest fundraiser Victorian Labor had ever held shortly after the election.
Hostile Crown critic Rob Hulls was stripped of the gaming portfolio to focus on being attorney-general, the royal commission was quietly dropped and then-ALP Victorian secretary David Feeney extracted a $100,000 donation from the Crown associates.
There isn’t time or room to delve into the plethora of other historical governance issues and allegations surrounding Crown (defamation settlements, home renovations, Grand Prix conflicts of interest etc etc), but it does explain why the Victorian media were in a lather yesterday after Lloyd Williams patted Opposition Leader Daniel Andrews on the back and said, “I’m very pleased that, you should probably know I am the executor of the Packer estate, and James is going to kick every goal he can for you”. James Packer, however, has since distanced himself from these comments, denying he would intervene in the 2014 state election.
Kerry Packer’s will reportedly prevented James from giving money to the Scientologists, but it is very difficult to see how Williams and his joint executor David Gonski could influence how Packer plays this Victorian election.
Lloyd Williams, 74, was just big-noting himself with the reference to the executor role but he knows that James Packer is furious with the Victorian government’s revenue grab which will cost Crown $250 million in an upfront licence payment next week, albeit in exchange for a lucrative 17-year licence extension, designed to boost Crown’s competitiveness as tourist destination for people throughout Australia and Asia, and to promote jobs growth.
James Packer spelt it out quite clearly at Crown’s recent AGM when he said:
“I’m sick of governments asking Crown to invest more in tourism infrastructure, employ more people and then as soon as they have a revenue problem they try and make us pay for it with total disregard for the consequences that has on our business and our staff. This is essentially sovereign risk and it’s the reason why so many large businesses are reluctant to make major investments in infrastructure and jobs.”
What Packer doesn’t understand is that he has a contract with the Victorian government to promote visitation to Melbourne.
He then arrogantly “ran through a brick wall” to prevail upon the New South Wales Parliament to allow him to build a second casino in his home city of Sydney which would drain revenue from Victoria.
This was hardly going to endear him to Victorians, and state Treasurer Michael O’Brien duly responded with a revenue grab.
The most interesting element now will be to watch how all the media oligarchs play the Victorian election. James Packer is very tight with Lachlan Murdoch but he won’t have enjoyed Mark Knight’s cartoon in the Herald Sun this morning.