Federal Group Denies ‘Corporate Blackmail’ Accusation
Federal Group currently has a deed that gives them an exclusive monopoly over all gambling in Tasmania. This license is valid until the year 2023. When an effort was made by David Walsh to open a boutique casino in Tasmania, the state went to Federal Group seeking approval to extend the gambling license to David Walsh. Federal Group used this opportunity to attempt to extend their gambling monopoly even further. Besides allowing for the boutique casino proposed by David Walsh, Federal Group also announced plans to renovate one of the older casinos in Wrest Point amounting to the sum of $70 million if given an extension on their gambling monopoly.
Many politicians did not take kindly to Federal Group’s proposal. Cassy O’Connor from the Greens and also Adre Wilkie, an independent MP, both said their proposal was equivalent to “corporate blackmail.”
Cassy O’Connor made mention that over $200 million is lost by citizens of Tasmania ever year on poker machines. She feels that renovations of the Wrest Point casino should not hinge on the signing of the license extension.
Federal Group has since denied the claim that their proposal was corporate blackmail and has made it clear that their business relies heavily on licenses from the state to operate. Federal Group also made mention of their financiers and their obligation to repay those who invest in such a large project. Their intentions to renovate the Wrest Point casino rely heavily on their ability to recoup the invested capitol. They said they can’t invest such a large sum into renovations of a casino with the uncertainty of not being able to operate the casino a few months after completion.
The Federal Group proposal includes several new restaurants, additional bars, and also a VIP room for international gamblers. While the state government was impressed with the proposed renovations they still denied reviewing the exclusive license given to Federal Group until the year 2018.
While David Walsh had recently applied for a casino license in the state, he later withdrew the license application when he discovered Federal Group was using it as leverage to extend their exclusive monopoly in Tasmania. While there is still the possibility of David Walsh’s casino coming to fruition prior to the expiration of Federal Group’s exclusive license, negotiations are still early in their development.