James Packer's Claytons casino far from settled A bemusing sidelight during Barry O'Farrell's casino announcement media conference yesterday was watching how hard the NSW premier worked to not call Crown's Barangaroo casino a casino. In the usual Australian tradition, Sydney ends up with a duopoly rather than a genuinely competitive environment. Time and again it was a "VIP gaming facility" - obviously something completely different. The next word game will be re-defining what "guarantee," "limit" and "commitment" really mean. An artist's impression of James Packer's new hotel-plus-'VIP gaming facility' at Barangaroo. Aside from the house winning, the one sure thing about James Packer's Barangaroo "VIP gaming facility" is that what Sydney eventually gets from this chronically flawed process won't be what David Murray's committee outlined yesterday. Like the Tour de France, there's big difference between winning stage three and the eventual outcome. All that really happened yesterday was Echo's Star monopoly being bumped into the ditch. The government's grand announcement of a $1 billion state revenue guarantee, the higher and flat tax rate, the number and nature of tables and the size of the building itself all add up to just another negotiating position for Crown. Oh it sounds nice and feeds the chooks in Packer's overwhelming media cheer squad, but there are many more stages yet to play out. David Murray's committee made much of Crown's Melbourne track record in its decision to give Packer the nod, so let's use Crown's Melbourne track record as a guide. This is from the latest edition of Australian Gambling Statistics, the official scorecard for Australia's gambling habit: Crown Casino table games expansion: On 16 December 2009, the Ninth Variation to the Casino Management Agreement with Crown Casino was ratified by the Victorian Parliament. Under the Ninth Variation, the tax rate on electronic gaming machines was increased by 1.72% each year for the next six years. At the same time, the Casino licence was amended so that the maximum number of gaming tables available for gaming at any one time at the casino was increased from 350 to 400. In addition, up to 100 poker tables are also allowed at any one time, enabling the casino to operate a maximum of 500 gaming and poker tables. The Ninth Variation also defined fully automated gaming tables as table games and limited the number of fully automated tables to 200 multi-terminal stations (excluding poker). Yes, nine variations and still counting as Victorian parliaments of both colours have accommodated Crown's evolving desires. Among other things, Crown has enjoyed creep on both tables and poker machine numbers, a reduction in high-roller tax, broken a licence condition on building a second hotel tower and had the $73 million fine for that waived. First capture the government, then steadily bend it to your will. The NSW government and opposition were both captured from the first expression of James Packer's desire to have a Sydney casino. Sorry, a "VIP gaming facility." The original intent of the unsolicited proposal pathway was twisted to allow Crown's specious claim to special status through having a limited exclusive hotel contract with Lend Lease. Premier O'Farrell comparing that with Transurban's ownership of existing toll roads when considering an F3-M2 link is laughable. Murray's committee has done its allotted job of picking one winner from the two options before it - but the flawed nature of the process means it was a severely limited choice, a merely either-or decision. Crown successfully manipulated the system from the outset to avoid going to tender against the world's top casino operators for Sydney's second "VIP gaming facility" licence. That in itself makes a joke of the announced key determinant in going with Crown - the benefits of competition. Murray's committee gave Crown the nod because it would add "competitive tension" to the Sydney VIP gambling market, but the competitive tension for the licence itself was artificially restricted to a two-horse race and that race's outcome was decided by wanting to have two runners. And, in the usual Australian tradition, Sydney ends up with a duopoly rather than a genuinely competitive environment. Two airlines, two supermarket giants, two big breweries, two cardboard box companies - they tend to have a way of living with each other. If Murray's committee was serious about the importance of competition, the new licence would have been wide open to it and the number of new licences would have been at least up for discussion. What Crown skilfully scuttled was the opportunity for a genuine review of what New South Wales" optimum gambling industry might be. The state is awash with opportunities for mugs to lose money - close to world's worst practice when it comes to pokies - without a serious appraisal of how it all fits together. If two "VIP gaming facilities" will do wonders for attracting Asian gamblers, three or four or five could do better again, provide even more employment and building opportunities. What a wonderful chance to bring Manly into the 21st century with a couple of six-star hotels. No, that's too far from the airport - Botany Bay could be remade into our very own boardwalk empire. Is it efficient to go with the Packer promise to import Barangaroo workers from Penrith when high rollers could be helicoptered there? A Panthers VIP gaming facility - how the west could be won. But Mr Packer wouldn't like that so it won't happen. As to the various "expert opinions" hired by the players in this game, the usual rule applies - consultants come up with the answers and arguments those paying them want to receive. Broader public scrutiny has already been by-passed and will continue to be as part of the open-slather possible with an "unsolicited proposal." As to the media's watchdog role, Crikey's Glenn Dyer has pointed out that James Packer arguably has more comprehensive media connections than his father ever enjoyed without the inconvenience of having to own any: his best mate runs Channel 9, another good mate is a Murdoch who also chairs Ten Network, his closest lieutenant is on the Seven board and the ratbaggery of Sydney shock jocks are all well inside the tent. Doesn't leave much. And about the only dissenting voices tend to be anti-gambling campaigners who miss the point: not only have the horses long-since bolted, the farm is over-run by brumbies. The question should be how the state might make the optimum use of them, rather than selectively granting pet food franchises to a few powerful mates. Michael Pascoe is a BusinessDay contributing editor