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Barangaroo hotel needs casino, Crown says


Crown's proposed luxury hotel at the harbourside Barangaroo development in Sydney must include a casino component for it to be viable, the casino operator says.

And Crown would prefer to utilise the existing sole casino licence in NSW for the planned hotel, its chief executive Rowen Craigie said.

That licence is currently held by rival Echo Entertainment Group, which operates Sydney's The Star casino.

Crown has applied to regulators to lift its stake in Echo to 25 per cent, from its current 10 per cent interest.

"In Australia, the economics of developing five or six star luxury hotels, whether in Perth, Sydney or anywhere else, without a gaming component to cross-subsidise those economics - you're not going to see those developments in this country," Mr Craigie told reporters on Friday.

"In the last 20 years there hasn't been any luxury hotel of scale that hasn't been associated with a casino.

"We've made it clear for Barangaroo Sydney to get a six star luxury hotel, we need to have a VIP gaming component."

Crown recently signed a two-year exclusive dealing arrangement for a Barangaroo hotel development with the site's developer, Lend Lease.

Building approvals are still required from the NSW government.

Crown, which is led by executive chairman James Packer, recently launched a public campaign against Echo that resulted in the departure of its chairman John Story.

He has since been replaced by Australian Rugby Union chief executive John O'Neill.

Mr Craigie said on Friday he would be seeing if Mr O'Neill held similar views about using Echo's casino licence for the Barangaroo development.

The other option for Crown is to seek a second licence from the NSW government.

Crown on Friday posted a net profit of $513.3 million for the year to June 30, a 53 per cent increase on the previous year.

Revenue in the year to June of $2.8 billion was an increase of 17 per cent from the previous year.

Despite the revenue growth, Mr Craigie said activity at Crown's casinos in Melbourne and Perth had slowed in recent months.

Crown shares were up 13 cents, or 1.5 per cent, at $8.66 at 1302 AEST.