“Where Kerry liked to play in casinos, James likes to own them.” — BRW Rich List editor, 2006
The chips keep falling into place for James Packer, Australia’s third richest person. His casino and gambling juggernaut, Crown Limited, recently had its $1.5 billion Barangaroo proposal in Sydney approved by the O’Farrell government in controversial circumstances, but it is only the latest in a long line of gambling operations around the world.
Packer’s personal stake in Crown is 49.9%, just short of an absolute majority in order to avoid consolidating it into his private company. Following the rise in the price of Crown shares thanks to the Barangaroo deal, Packer’s $6 billion fortune reportedly received a healthy boost of $250 million.
Crown has existing or planned facilities on four continents — operating in Australia, Macau, Sri Lanka, the United Kingdom, the United States and the Philippines. In 2011-12, the ever-expanding empire recorded a net profit of $513.3 million, with 11,300 employees on the books. World domination is evidently no mean feat, however, as Packer has seen other ambitions in Canada, Russia, Singapore and the US fall flat.
View The many jewels of Packer’s Crown: A visual guide in a larger map
Packer copped an $80 million loss as a result of abandoning a stake in Echo Entertainment, owner of Sydney’s Star casino, but in the next few years he will add to his already sizeable international portfolio. Sydneysiders can relate to the recent and divisive approval by the Sri Lankan government for a $400 million project in downtown Colombo, due in 2016. Despite significant local opposition to the proposal, Packer and his business partner were also gifted with 10 years of tax breaks, worth hundreds of millions of dollars.
A facility under construction in Manila is due to be completed in 2014, and Crown is expanding its operations in the UK and Macau with new casinos to be opened in the next few years.
Crown’s diminutive presence in Las Vegas has been troubled. Packer made a series of investments in large and ultimately unsuccessful projects when the global financial crisis was in its early stages. Crown Las Vegas was a proposal for the tallest building on the famed strip and was to be constructed at a cost of $5 billion. Crown, with a 37.5% holding, and its partners ended the project after it faced regulatory barriers and deemed it wasn’t a”commercially viable contract”, suffering a loss of $44 million. The company also poured $333 million into the $2.9 billion Fontainebleau Las Vegas, just down the road, an investment completely written off when the plans were scrapped in the face of debilitating financial pressures. Packer is also facing legal proceedings in the Nevada Supreme Court over his involvement.
Back at home, the Barangaroo facility is slated for a 2019 launch. The deal is a windfall for the NSW government, worth $1 billion in the first 15 years, and a lot more for the son who has well and truly stepped out of his father’s shadow.
Crikey is committed to hosting lively discussions. Help us keep the conversation useful, interesting and welcoming. We aim to publish comments quickly in the interest of promoting robust conversation, but we’re a small team and we deploy filters to protect against legal risk. Occasionally your comment may be held up while we review, but we’re working as fast as we can to keep the conversation rolling.
The Crikey comment section is members-only content. Please subscribe to leave a comment.
The Crikey comment section is members-only content. Please login to leave a comment.