Federal Group Attempts to Extend Casino Monopoly
A company called Federal Group currently has an exclusive monopoly to deliver casino games in Tasmania until the year of 2023. This was an agreement made after extensive negotiations with the Tasmanian government. Even in light of Federal Group’s monopoly a man named David Walsh has been working with government officials to gain approval for the building of the Monaco boutique casino. Because of the deed extended to Federal Group the government still needs their permission to approve the casino presented by David Walsh. It seems Federal Group has taken this opportunity to attempt extending their current monopoly deed beyond 2023. By agreeing to the Monaco casino and by promising the renovations of one of the older casinos in Wrest Point to the sum of $70 million they have requested an extension to their current deed. It should be noted that Federal Group does not have a monopoly over online casinos presently available to Australians in the state.
Currently their deed is due for review in 2018. This is 5 years prior to the expiration of their current deed, yet Greg Farrell, CEO of Federal Group, wants a decision made much sooner regarding the extension. Farrell claims that by waiting until 2018 future casino planning and development could be delayed. However, according to Federal Group they would only need six months to submit new plans and construction would only take two and half years.
Some of the current plans in the renovation include new bars and restaurants, added gaming tables and a VIP room for international guests. Federal Group claims they require an extension past 2023 to recoup planned investment in the casinos. While Farrell and Federal Group claim that these renovations are dependant on the extension of their deed the Government is hoping that the renovations take place regardless of an extension promised before the company’s review date in 2018.
After review of the plans ultimately the government did not believe they justified an extension of the current deed. Some of the statistics shared by the Greens leader Cassy O’Connor included the fact that $200 million is lost by Tasmanian citizens on poker machines every year. She believes $70 million of investment in renovations should be considered a small contribution by Federal Group.
While other political leaders may not have expressed as strong of feelings regarding the tactics of Federal Group as Cassy O’Connor it seems evident that they are mostly in agreement of calling out Federal Group’s bluff. Ultimately, there is a strong push to see if the people of Tasmania want much of the gambling sector in their state monopolized by a single corporation. While Federal Group does stand to profit off of an extension of the current deed their contributions to the tourism and gaming sector of Tasmania have been significant. As a result Tasmania’s business and tourism sectors seemed much more excited about the proposed renovations and casino investment compared to those in government.
David Walsh did not anticipate Federal Group using his proposed casino as a bargaining chip to extend their monopoly. Ultimately, David Walsh had requested the withdrawal of the casino license request from the state’s Treasurer. He has been reported saying that he has no intentions of helping enshrine Federal’s monopoly over poker machines. If he does eventually open Monaco casino it will most likely be after 2023 after Federal’s deed expires.