I agree, there are others more central. Most of the fireworks happen around the river and in the parks along the river, so if you find a hotel around there you will still have an awesome time. You will be able to see the fireworks great from a point around the river or at Federation Square, plus then you can go to a bar or club in the city afterwards if you want. Yes there are bars and stuff at the casino but if you change your mind and want to go to a different place it's a long walk. Keep in mind also that on NYE in Melbs at least a million people pack into an area the size of one square kilometre, so if you aren't comfortable with crowds and you'd rather see the fireworks from your room, you might want to choose a hotel with a good view (which is any hotel within a block from the river, in my opinion).
If I could give one other bit of advice, too, it would be to choose and book asap...I was under the impression everything booked out by this time of year so I wouldn't wait too much longer before deciding.