The gambling industry in Tasmania is a lot smaller when compared to the likes of Sydney and Melbourne and the Federal Group dominates the Tasmanian market as it owns and operates ‘Wrest Point’, the oldest casino in Australia.
The Federal Group has put forward a proposal to spend nearly $70 million to upgrade the facilities at the Wrest Point casino and give it a new look. The move was welcomed by the state government as the investment would help boost tourism and gambling revenues and prove to be a win-win situation for both the Federal Group and the state government.
While the Federal Group is more than willing to make the investment, they have thrown in a stipulation clause which has not gone down very well with the Tasmanian government. The Federal Group has exclusive rights to run casinos in Tasmania till 2023 and this exclusivity contract is due for review in 2018 to see if the government wants to extend the Federal Group’s monopoly over the Tasmanian gambling industry past 2023.
The Federal Group has made it clear that it does not want to wait till 2018 for the exclusivity contract to be reviewed but prefers for the state government to complete the review at the earliest and give them a clear decision. Greg Farrell, the Federal Group CEO and managing director stated that unless and until the company was assured of an exclusivity contract extension it would not proceed with the $70 million upgrade. The company generates more than 40 percent of its revenue from the gaming industry and most of it comes from poker machines.
In a statement, Farrel said “The redevelopment will establish Wrest Point as Australia’s greatest boutique entertainment destination; returning the focus to our prime waterfront location, with dedicated performance spaces, high quality dining outlets that champion Tasmanian produce, and recreate the excitement of casino gaming.” However, Farrel made it clear that his commitment to upgrading Wrest Point will be based on the decision of the state government.
The state government wasn’t impressed with the stance adopted by the Federal Group. Greens leader MP Cassy O’Connor put it down to ‘corporate blackmail’. State Government Treasurer Peter Gutwein stated that it was completely up to the Federal Group to decide whether they wanted to proceed or not proceed with the $70 million modification of Wrest Point and that the government would not be pressured or bullied into making a quick decision.
Gutwein stated that the government hopes the $70 million investment will go ahead irrespective of the decision as the government had time till 2023 to make a decision on this exclusivity contract and would not rush into making a decision so quickly.