Shares in Echo Entertainment have plunged to an all-time low after the casino operator lost out to James Packer’s Crown on plans for billion dollar luxury projects in Sydney.

Crown shares, on the other hand, soared.

Mr Packer’s proposal to build a $1.3 billion resort and VIP-only casino at the harbourside Barangaroo development was favoured by the NSW government over Echo’s rival $1.1 billion plan to expand The Star.

The decision advances Crown’s proposal to the third and final stage of an approval process.

Echo will still hold an exclusive casino licence in Sydney until 2019, and has vowed to focus on maximising value from its recently redeveloped The Star.

But it is likely to face competition from Crown if Mr Packer’s plans for a high roller gaming facility come to fruition.

Shares in Echo dropped 15 cents, or 5.15 per cent, to $2.76 on Friday, well under their previous record low of $2.81.

The share price had already dropped by 4.3 per cent ahead of the NSW government’s decision on Thursday, most likely on media reports Crown had been favoured.

The company was listed on the ASX in June 2011, after demerging from Tabcorp.

Crown shares gained 39 cents on Friday, or 3.2 per cent, to $12.60.

They hit an all-time high of $13.51 in May.