James Packer's Crown Ltd has ramped up its move on fellow casinos operator Echo Entertainment by seeking regulatory approval to raise its stake to 25 per cent.
Crown included the 25 per cent limit in its application to the NSW Independent Liquor and Gaming Authority and the Queensland government as part of its plan to push for an increase in its existing 10 per cent stake in Echo.
Echo's constitution restricts an entity's voting power to a maximum of 10 per cent unless the written consent of the regulator in NSW and the Queensland government is obtained.
Crown said on Wednesday that the regulators had accepted the new condition to its application but were yet to decide on whether Crown could exceed the 10 per cent ownership level.
Malaysian gambling group Genting holds a stake of about 9.88 per cent in Echo and has also applied to regulators to lift its stake above 10 per cent.
Fat Prophets analyst Greg Fraser said the fact that Crown had asked to increase its holding up to the figure of 25 per cent was "interesting".
If Genting were to aim to acquire 25 per cent also, and both companies did in fact obtain 25 per cent each, Genting and Crown acting in unison would be enough to control Echo without making a takeover bid.
However, there was nothing to indicate yet that Crown and Genting were acting or would act in unison.
Mr Fraser said Crown may not necessarily move to a 25 per cent stake immediately. It could lift its stake to 19.9 per cent - the threshold for making a full takeover bid - and then increase its stake in Echo by three per cent every six months under the "creep" provisions of the Corporations Act.
"I guess the next step is we wait for Genting to do the same. As the gambling parlance goes: 'to see your 25 and raise you something'," Mr Fraser said.
The changes to Crown's application comes after investment firm Perpetual was granted approval by the same NSW and Queensland bodies to increase its potential maximum voting power in Echo from 10 per cent to 15 per cent.
However, Perpetual had earlier notified the Australian Securities Exchange, on June 22, that it had ceased to be a substantial shareholder in Echo.
Echo operates The Star casino in Sydney, the Treasury casino in Brisbane, Jupiters Townsville and Jupiters Gold Coast.
Crown operates the Crown casino and Melbourne and the Burswood casino in Perth.
Shares in Echo were three cents higher at $4.33 on Tuesday.