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(FURTHER AMENDMENT) BILL PETITION Iona Primary School PAPERS CASINO

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(FURTHER AMENDMENT) BILL PETITION Iona Primary School PAPERS CASINO STATE TAXATION (FURTHER AMENDMENT) BILL Thursday, 11 November 1993 COUNCIL 937 Thursday,l1 November 1993 CASINO (MANAGEMENT AGREEMENT) BILL Second reading The PRESIDENT (Hon. B. A. Chamberlain) took Hon. HAD DON STOREY (Minister for Tertiary the chair at 12.3 p.m. and read the prayer. Education and Training) - I move: STATE TAXATION (FURTHER That this Bill be now read a second time. AMENDMENT) BILL In his report on the establishment of casinos in Introduction and first reading Victoria, Mr Xavier Connor considered it was important that there be a bipartisan approach to the Received from Assembly. establishment of a casino. In keeping with this suggestion, in introducing legislation for casinos into Read first time on motion of Hon. R. M. HALLAM the Parliament the previous government gave an (Minister for Regional Development). undertaking that the management agreement to be entered into between the proposed casino operator PETITION and the State should be subject to ratification by Parliament. Iona Primary School In introducing amendments to the Casino Control Hon. R. S. IVES (Eumemmerring) presented a Act in the last sittings this government gave a petition from certain citizens of Victoria praying similar undertaking. The Bill meets those that Iona Primary School be allowed to remain commitments. open (120 signatures). THE PREFERRED APPLICANT'S BID Laid on table. As honourable members are aware, the Victorian PAPERS Casino Control Authority has chosen Crown Casino Ltd as the preferred applicant for the Melbourne Laid on table by Clerk: casino. Crown, a Melbourne-based consortium comprising Hudson Conway Ltd, Carlton and Adult, Community and Further Education Board - United Breweries Ltd and Federal Hotels Ltd, was Report, 1992-93. the unanimous choice of the authority. Anti-Cancer Council - Report, 1992-93. The Crown Casino design sets out to create an authentic extension of Melbourne as a living city Director of Public Prosecutions Office - Report, catering to the entire community. The complex will 1992-93. provide world-class entertainment and recreational facilities at Yarrabank, attracting Victorians and Judicial Studies Board - Report, 1991-92. people from interstate and overseas to our city, thereby further revitalising Melbourne. The design Nursing Council- Report, 1992-93. includes: Post-Secondary Education Commission - Report, the extension of the popular Southbank 1992-93. promenade from Queen's Bridge to Clarendon Street; Radiation Advisory Committee - Report for the year ended 30 September 1993. a striking 2-hectare roof top garden which will stretch over the Kingsbridge overpass; and State Training Board - Report, 1992-93. development of Queensbridge Square as a major Totalizator Agency Board - Report for the year ended gateway to the city. 31 July 1993. CASINO (MANAGEMENT AGREEMENT) BILL 938 COUNCIL Thursday. 11 November 1993 The casino itself will have views of the river, a The decision by the Victorian Casino Control significant innovation, as most casinos are fully Authority to nominate Crown was the culmination enclosed. Other features of the complex include: of one of the most thorough evaluation processes ever undertaken in Australia for a major public a five-star 360-room hotel providing spectacular project. The authority set about the process of views of the river, city and Port Phillip Bay; selecting a licensee for the Melbourne casino by using a consultative evaluation process. 15 restaurants and 20 bars offering a choice of themes; Expressions of interest for the licence were sought within Australia and overseas and the authority a sports club including tennis courts, swimming narrowed the field down to three applicants. It then pool, gymnasium and fitness centre; engaged in a regular cycle of consultation with the applicants to ensure that they understood the an eight-screen multiplex cinema; and requirements of the brief and had the opportunity to test out ideas with the authority before committing an array of public spaces for entertainment to them. The strategy was to maximise the design including an ice-skating rink and an enclosed quality and the financial offer of each of the bids in Ferris wheel. order to give the authority a choice of the best possible submissions. The casino itself will have 200 gaming tables and 2400 gaming machines when it is expected to The authority developed and strictly enforced a commence operations in June 1996. The temporary protocol to ensure the integrity of the selection casino in the Galleria at the World Trade Centre is process. The basis of this protocol was that the expected to open in mid-I994. It will have 130 tables ultimate assessment of applicants' submissions was and 1300 gaming machines. made by the authority members based on the recommendations of: The integrated casino, hotel and entertainment 1. the financial advisory panel coordinating complex will cost about $750 million to develop and financial, legal and commercial issues; should create 5000 jobs during construction, employ 3600 people and generate about 15 000 indirect 2. the development and siting advisory panel jobs - a big vote of confidence in Victoria and one coordinating the design, engineering and which will give added impetus to Victoria's planning issues; and economy. 3. the probity division, which investigated whether applicants were suitable persons The total value of premium payments offered by having regard to character, honesty and Crown Casino Ltd is $262 million plus the value of integrity. offsite works to be paid for by Crown such as improvements to Queensbridge Square, Whiteman The integrity of the process was further preserved and Clarendon streets and access ramps to by maintaining confidentiality within each of the Kingsway which are estimated to cost $23 million. panels and maintaining absolute confidentiality of These items are in addition to the tax revenue the probity investigations. In this way the outlined later. assessment of the development and siting panel, for example, was not influenced by the assessments THE SELECTION PROCESS being made in other areas. In providing for the establishment of casinos in Government officials have been involved in the Victoria, the Parliament enacted legislation for a process in order to resolve questions of government system of licensing casinos with the aims of policy on the basis of the authority providing ensuring their management and operation remained relevant information without identifying the free from criminal influence while promoting applicant to which the information referred. tourism, employment and economic development in Applicants also consulted with various government the State. The Casino Control Act established the agencies on a confidential basis to resolve technical Victorian Casino Control AuthOrity for these queries on provision of government infrastructure purposes as an independent body appropriately free and services in the Yarrabank and galleria areas. from political interference. CASINO (MANAGEMENT AGREEMENT) BILL Thursday, 11 November 1993 COUNCIL 939 The authority selected the preferred applicant based Clauses 23 and 24 of the agreement refer to on a balanced assessment of submissions across a exclusivity rights for the company. Exclusivity broad range of criteria including: applies for: the probity, honesty and integrity of the applicant the whole of the State during the period of six companies, their management, staff and years from the date the casino licence is granted; associates; and the capacity of the applicants to manage the those parts of the State within 150 kilometres gaming in an efficient and honest manner; from the Melbourne casino during the period of 12 years from the date the licence is granted. design, including imagery in the Melbourne context, fit with urban planning principles, The latter period may be extended by up to 12 internal layout and security and surveillance months if the casino is required to close because it is features; destroyed by events outside the company's control, providing the company acts diligently to reinstate facilities offered including public entertainment the casino. In addition, the State agrees to restrict the and open spaces; number of gaming machines for 12 years from the date the licence is granted to a maximum of 105 in traffic and parking arrangements; any venue within 100 kilometres of the casino and a total of 45000 throughout the State. benefits to the State including taxation revenues, employment and tourism; Clauses 21 and 22 provide for payments to the State including: financial viability; and $200 million on the granting of the licence; capacity of the applicants to develop the project within the nominated timetable. a casino supervision and control charge to cover the authority's costs of $5 million for each THE MANAGEMENT AGREEMENT financial year until 30 June 1997; I turn now to the management agreement. The a casino tax of 20 per cent of gross gaming agreement is one of a suite of agreements involving revenue which will increase to 21.25 per cent from the State, the authority, financiers, builders and 1 July 1997 when the casino supervision and operations managers which have been or are to be control charge ceases; entered into establishing the rights and obligations of all parties to the casino project. a community benefit levy of 1 per cent of gross gaming revenue; Under the management agreement Crown is required to build the temporary casino in the a super casino tax where gross gaming revenue in galleria and adjacent areas at the World Trade any financial year exceeds $500 million (indexed); Centre and the Melbourne Casino to an international and quality at Yarrabank in accordance with the approved development proposal and the timetable an additional $2.4 million each month set out in the agreement. The casinos cannot open commencing on 1 July 1994 for two years, being for business unless they have been completed as the estimated life of the temporary casino. determined by the State's nominated representative and the authority. Liquidated damages of $50 000 a Clauses 25 and 26 set out termination provisions.
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