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AUSTRALIA - Path now clear for James Packer's new casino at Barangaroo

IT'S the final piece of James Packer's gambling puzzle - and now Sydney will get its second casino. James Packer's Barangaroo hotel-casino development will get cabinet approval on Monday.

Shadow cabinet also gave approval to the plan yesterday, ensuring changes to casino laws to enable the proposal to pass the upper house. Opposition Leader John Robertson told Labor caucus Sydney needed a six-star casino, and a high rollers room was the only way to pay for it.

Mr Robertson has been lobbied by Packer lieutenants, former Labor powerbrokers Mark Arbib and Karl Bitar.

It is understood Premier Barry O'Farrell's cabinet will formally accept Mr Packer's "unsolicited proposal" for a hotel-casino at its meeting next Monday, and move the project on to the "detailed consideration" stage.

But former premier Morris Iemma raised concerns that Mr O'Farrell may be set to grant a second casino licence without a tender process, potentially costing the state hundreds of millions.

Mr Iemma said the government was required to put such a service out to tender, unless a proponent can prove they offer a unique service.

Conservative estimates on the cost of a casino licence put it at $200 million.

Mr O'Farrell signalled last week that Mr Packer's proposal to build a high-rollers room as part of a six-star luxury hotel at Barangaroo would be treated as an "unsolicited proposal".

Mr O'Farrell last night refused to publicly commit to putting a second casino licence out to tender.

Mr Iemma said the guidelines "are pretty clear that tender and expressions of interest are the starting point".

"For a direct deal (to occur) you have got to have some unique product or services. Is there not a market for the provision of six-star hotels?"

Mr Iemma said firms such as Accor, the Four Seasons and the Hilton were all capable of producing six-star hotels and there were casino operators other than Mr Packer.

It is understood the Packer proposal is not the first casino proposal to go before this government.

An overseas tender to build the new Sydney Convention Centre put forward a proposal to build a casino there last year but was knocked back by Infrastructure NSW.

Liberal pollster Mark Textor, who is close to Mr O'Farrell's office, has also worked with Mr Packer on his campaign against The Star casino.

Mr O'Farrell signalled, when Mr Packer first came forward with his Barangaroo proposal in February, that he was in favour of the hotel-casino, provided regulatory hurdles were cleared.

Mr Packer has already signed on with Lend Lease for the exclusive right to build a hotel in Barangaroo.

Sources indicated Mr Packer's new casino would operate from 2019, when Star's one-casino licence, worth $100 million to government, runs out.

The government has done no modelling yet on how much gaming tax Mr Packer's casino might reap, nor how many gaming tables it would contain.

A spokesman for Mr O'Farrell said last night: "An exclusivity agreement is in place that permits only one casino. No decisions have been made on a second casino licence."

It is understood shadow cabinet debated about the way in which the casino would be approved but Mr Robertson said the tourism lobby believed it's in Sydney's best interests.

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