SYDNEY, Australia — The New South Wales state government today canceled a contract for Harrah's to build and operate the world's biggest casino in Sydney because of allegations linking the American casino with organized crime figures.
The state government had signed a 45-day interim agreement in June with the consortium of Harrah's and Australian builder Hooker Corp. Ltd. to construct a $366-million casino at Sydney's Darling Harbor in time for the nation's bicentennial celebrations in 1988.
But after the agreement was signed, the state learned that Harrah's was under investigation by both the FBI and New Jersey gaming control authorities for allegedly using organized crime figures to arrange deals with the Teamsters union.
In its defense, Harrah's released a report by New York lawyer Peter Brown, saying the allegations were not "supportable by credible evidence."
The big American casino operator also had offered to voluntarily withdraw as manager of the Sydney casino if U.S. investigations did not find in Harrah's favor.