James Packer Goes All In with New Vegas Resort
James Packer’s gambling company – Crown Resorts Limited – has recently acquired the site that was formerly occupied by New Frontier Casino on the Las Vegas strip. A deal was struck whereby Packer’s gambling company agreed to pay $280 million for this new investment. The proposed new casino resort will be built by 2018 and is expected to occupy 34.6 acres of territory on the famed Las Vegas strip. Crown Resorts Ltd will work in partnership with the former president of Wynn Las Vegas, Andrew Pascal. This new initiative will be the third such attempt that Crown Resorts Ltd has made in Las Vegas. The two previous offerings failed to take off, including Cannery Casino Resorts LLC and Fontainebleau Resorts LLC. James Packer views this investment opportunity as a way to move beyond London, Melbourne and Perth to the gambling mecca of Las Vegas.
Las Vegas Expected to Boost Appeal for VIP Players
Crown Resorts Limited has been looking to Las Vegas to bolster its portfolio of casino offerings. This is especially important to the group’s VIP clients from Asia who like to fly to multiple gambling destinations around the world. The site for the new hotel and casino is approximately 1 mile away from The Flamingo, towards the north end of the Las Vegas strip. James Packer is confident that this latest attempt to capitalise on the gambling market in Las Vegas will bear fruit. However, Crown’s track record in Las Vegas is nothing to be proud of. Prior to the financial crisis, the company invested AU$792 million for a 20% share of the Fontainebleau Casino Resort. Several other investments were made in Harrah’s Entertainment Inc, Stations Casino Group as well as LVTI LLC. By 2009, all of those investments had degraded down to 0.
Crown Resorts Ltd bets Big on Vegas while Macau Declines
In much the same fashion, Crown Resorts Ltd has not received any earnings from its $320 million investment for a 24.5% stake in Cannery Casino Resorts LLC. This establishment is also located towards the northern end – just off the Las Vegas strip – towards the Stratosphere Hotel and Casino. Around the world, Crown Resorts Ltd has also been hit by declining revenues in Macau. In the second quarter of 2014, revenues dropped by 3.6 percentage points to $3.56 billion. These figures are in line with the general trend taking place in Macau as a result of the Chinese crackdown on corruption on the mainland and surrounding territories.
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