Crown, Echo cleared of cartel behaviour

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Crown, Echo cleared of cartel behaviour

By Colin Kruger

The competition watchdog has dropped its investigation into allegations of cartel behaviour between James Packer’s Crown Resorts and rival Echo Entertainment saying there is insufficient evidence to support charges after a thorough investigation.

The Australian Competition and Consumer Commission (ACCC) launched the investigation in July this year after Echo chairman, John O’Neill, sensationally claimed that Mr Packer had promised to keep his casino empire out of Brisbane if rival, Echo Entertainment, supported his proposed $1.5 billion casino hotel at Barangaroo.

No evidence of wrong doing: Crown and Echo.

No evidence of wrong doing: Crown and Echo.Credit: Jessica Shapiro

‘‘The ACCC conducted a thorough investigation of the issues and concluded that there is insufficient evidence to suggest that there has been a contravention of the competition laws. On that basis, the ACCC does not intend to take any further action on the matter,’’ the commission said in a prepared statement on Tuesday.

Crown, which denied the allegations, said: ‘‘We welcome the announcement from the ACCC today,’’ and would not comment further.

Central to the investigation is an alleged statement from Mr Packer that his casino operator, Crown, would stay out of Queensland if Echo "behaved" itself "vis-a-vis Sydney".

The statement was allegedly made during a luncheon on his boat in March this year attended by Crown executive, and former Labor minister, Mark Arbib, Echo chairman John O’Neill and chief executive John Redmond.

Mr O’Neill made the allegations in July this year to Fairfax Media. This triggered the ACCC investigation on the grounds that the statement may suggest an invitation was being made to collude in the allocation of geographic markets between the two casino operators, the commission said.

The ACCC said that, while does not generally comment on its investigations, it considered it was appropriate in this circumstance due to the public nature of these serious allegations.

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The commission said it will not comment further on the matter.

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News of the ACCC’s investigation came soon after the NSW government decided to advance discussions on Crown’s Barangaroo casino plan which subsequently received government approval. This means Echo will lose its monopoly position in Sydney when the exclusivity of its licence ends in 2019.

The two companies now face a turf war in Brisbane, with competing plans to build a new casino in the city’s central business district. Echo already owns casinos in Brisbane, Townsville and the Gold Coast.

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