James Packer to Crikey: I should have driven Sportsbet’s multibillion-dollar rise

First up, let’s all wish Lachlan Murdoch a very happy 51st birthday for yesterday. Born in Wimbledon Hospital on September 8 1971, Rupert’s eldest boy isn’t the only billionaire mogul who reads Crikey.

His long-time mate James Packer might be cruising the Mediterranean on his $250 million boat, but when our little newsletter publishes a gambling story, he’s very quick to provide unsolicited feedback, as was noted in this August 19 piece.

After another gambling missive related to the AFL’s latest media rights deal went live in Wednesday’s edition, sure enough, the phone dinged at 7.30am yesterday with an email-to-text response from the cashed-up billionaire.

The key point Packer wanted to make was that under his watch, between 2005 and 2021, Crown Resorts had driven more than $12 billion in investment into three Macau casinos and its three Australian casinos in Sydney, Melbourne and Perth.

When compared with what other gambling outfits such as Dublin-based Sportsbet, pokies billionaire Bruce Mathieson and casino rival Star Entertainment had “put back”, Packer reckons the comparison was “not even close”.

Packer is pretty punchy when it comes to media coverage, bemoaning the fact that we journalists “all miss the woods for the trees” and that “no one ever mentions” Crown was awarded the employer of the year award three times by the federal government. There you go, James, we mentioned it!

He’s also annoyed that the newspapers controlled by Nine’s managing director of publishing, former Joe Hockey staffer James Chessell, have still not properly covered the Flower Drum dinner he shared with Peter Costello and then victorian gaming minister Michael O’Brien on February 13, 2011.

While O’Brien has publicly declared that Costello, who he once worked for as a staffer, had never lobbied him on anything when serving in the Victorian Parliament, Packer suggests that journalists should directly ask O’Brien precisely what the three of them discussed over dinner that night.

The other interesting comments by Packer related to the success of Sportsbet and the proximity of Australian casino companies to the late businessman Stanley Ho, a notorious figure who was the original casino king of Macau with long-rumoured links to organised crime.

“Lawrence [Ho, Stanley’s son] and I spent $US900 million to buy Wynn’s spare licence to be independent of Stanley Ho,” Packer wrote.

Indeed they did, as you can see in this 2006 Fairfax coverage, but as the NSW gaming regulator’s Crown inquiry later revealed, the Lawrence Ho equity in the Melco-Crown Macau joint venture was originally backed by some of Stanley’s wealth, including access to land in Macau. When Packer tried to sell Lawrence Ho a 20% stake in Crown in 2019 for $1.8 billion, it was a combination of the Stanley Ho connection and Nick McKenzie’s Nine coverage that sparked the appointment of former judge Patricia Bergin to conduct a detailed public inquiry. From that point, there was no coming back for James Packer as a casino mogul.

Packer clearly now acknowledges the probity issues around Stanley Ho and effectively backs up this recent ABC investigative piece on 7.30 pointing to the Stanley Ho connections that Star Entertainment has brought in to help fund its enormous Queen’s Wharf casino development in Brisbane.

“Star in Queensland is in business with Stanley Ho’s direct partners at SJM,” Packer writes.

Packer also admits to another significant business “failing” — that it wasn’t him and Crown that built up the enormously profitable Sportsbet operation “making close to $1 billion per year now, and putting nothing back into society”.

While Packer did establish CrownBet as an online sports-focused bookmaker in a joint venture with sports gambling pioneer Matthew Tripp, in late 2017 he foolishly agreed to sell Crown’s 62% stake to the Tripp interests for $150 million. Tripp then immediately flipped it to Canada’s Stars Group, which went on to buy William Hill’s Australian operation and then merge with Sportsbet’s Irish parent, Flutter Entertainment — effectively rolling four competing online bookmakers into one dominant, foreign-owned giant in the Australian market.

Rather than throwing $2.2 billion at its Barangaroo project in Sydney, Crown Resorts would have been a lot better off focusing on its digital gambling business and leading the consolidation, rather than exiting a crowded market.

As for Sportsbet’s extraordinary marketing spend, Packer now warns that “media companies are all becoming addicted to their ads”.

That’s certainly what seems to be the case with the AFL, Seven and Foxtel, which are all highly reliant on Sportsbet’s revenue-generating ability as the “official AFL wagering partner” and Australia’s biggest gambling advertiser.

Flutter now has a market capitalisation of $30 billion and the Murdoch-controlled Fox Corp is one of its 10 largest shareholders. Another big Flutter shareholder is Will Vicars, the Sydney-based billionaire and fund manager who advised Packer’s sister Gretel when she successfully pushed for a $1 billion-plus payout from her brother in 2016.

Talk about wheels within wheels.