Australia likely to cancel Christmas Island casino lease

Australia likely to cancel Christmas Island casino lease

CANBERRA (Dow Jones): The Australian government said yesterday it expects to begin a process of canceling Christmas Island Resort Pty. Ltd.'s lease on an A$80 million casino resort on the island, and resuming ownership of the property.

The government Tuesday canceled the company's license to operate a casino on the island, which is located off the southern coast of the Indonesian island of Java, after it failed to meet debts of around A$3 million.

Christmas Island Resort is 90 percent-owned by Indonesian businessman Robbie Sumampow, with the remaining stake held by Western Australia state property developer Frank Woodmore.

A spokesman for Australia's Territories Minister Alex Somlyay said revocation of the company's lease over the resort likely will begin soon.

The resort is sited in government-held land that is leased to Christmas Island Resort, he said.

Somlyay's spokesman told Dow Jones Newswires the government hasn't been approached by anyone interested in taking out an operating license over the casino.

Australian businessman Kerry Packer, who controls Publishing & Broadcasting Ltd. has in the past shown an interest in operating the casino.

Anyone interested in applying for a license would go through the normal probity checks, the spokesman said.

The casino closed in April, plunging the island into economic collapse with 300 casino workers collectively owed more than $2 million in unpaid wages and redundancies.

The Age newspaper earlier this month reported inquiries into Indonesian businessmen with links to deposed President Soeharto had stopped Sumampow sending millions of dollars out of Jakarta to pay the debts.

Effects of the casino closure on Christmas Island's economy had been "quite considerable," the spokesman said.

The company also owes money to the Christmas Island Power Authority, National Jet Systems Group, and Christmas Island Travel Pty. Ltd..