• Subscribe
  • Magazines
  • About
  • Contact
  • Advertise
Sunday 27 July 2025
  • zh-hant 中文
  • ja 日本語
  • en English
IAG
Advertisement
  • Newsfeed
  • Mag Articles
  • Video
  • Opinion
  • Tags
  • Regional
    • Africa
    • Australia
    • Cambodia
    • China
    • CNMI
    • Europe
    • Hong Kong
    • India
    • Japan
    • Laos
    • Latin America
    • Malaysia
    • Macau
    • Nepal
    • New Zealand
    • North America
    • North Korea
    • Philippines
    • Russia
    • Singapore
    • South Korea
    • Sri Lanka
    • Thailand
    • UAE
    • Vietnam
  • Events
  • Contributors
  • SUBSCRIBE FREE
No Result
View All Result
IAG
  • Newsfeed
  • Mag Articles
  • Video
  • Opinion
  • Tags
  • Regional
    • Africa
    • Australia
    • Cambodia
    • China
    • CNMI
    • Europe
    • Hong Kong
    • India
    • Japan
    • Laos
    • Latin America
    • Malaysia
    • Macau
    • Nepal
    • New Zealand
    • North America
    • North Korea
    • Philippines
    • Russia
    • Singapore
    • South Korea
    • Sri Lanka
    • Thailand
    • UAE
    • Vietnam
  • Events
  • Contributors
  • SUBSCRIBE FREE
No Result
View All Result
IAG
No Result
View All Result

Crown investors continue to pay for Packer’s ambition

Newsdesk by Newsdesk
Sun 15 Mar 2009 at 16:00
Print Friendly, PDF & Email

Shareholders in James Packer’s gaming company, Crown, are continuing to pay for the adventures of Mr Packer and his managers in the tanking US gambling sector.

Crown has revealed an expensive way of getting off a rather nasty hook and postponing the high-priced purchase of casinos in Nevada and a racetrack and gaming palace in Pennsylvania. (Soruce , COMSEC).

The US vendors and Crown have announced the termination of an earlier $US1.75 billion deal to by a company called The Cannery, which owned the casinos in Las Vegas and the Meadows racetrack complex: the cost, a $US50 million break fee paid by Crown to Millennium Gaming and an affiliate of Oaktree Capital Management, the vendors of the casinos.

In its place a new deal that might not even happen, but which gives Crown a lower priced shot at the deal if it does.

In fact it could end up with a bit of a silver lining, if Crown and Mr Packer are lucky enough to ride out the slump in US gaming which seems to be deepening.

Now Crown seems to have bought itself time, a cheaper price and the possibility of a cheaper exit strategy than previously revealed.

They could end up with just under 25% of the Cannery group for the payment of around $US390 million, if the recast full purchase doesn’t proceed.

And that is considerably cheaper than the original $US1.75 billion price which Crown seemed on the hook for.

Crown’s deal to pay around $US400 million ($617 million) to save the company from having to go ahead with the original $US1.75 billion US casino deal was a face-saver for Crown and the vendors and was liked by local investors who pushed Crown shares up 13% on Friday to $5.90.

The new deal gives Crown three options: a minority 4% stake (if the regulator in Nevada or Pennsylvania rejects its application), a 24.5% stake, or full control within two years with a minimal break fee.

If regulators don’t approve the new deal, Crown will be forced to pay a total of $US290 million made up of break fees and the price of a compulsory 4% holding.

Provided regulators in Nevada and Pennsylvania approve the deal Crown can pay a total of $US370 million to delay the settlement of its purchase of the three US casinos for as long as two years.

Of this, $US320 million will remain in an escrow account ready to be converted into a 24.5% stake in the company, when market conditions improve. In many ways it’s like an option arrangement.

The worth of waiting was underlined over the weekend when it became known that the much larger Harrahs casino group is now warning of the dangers of bankruptcy.

According to a funding document released on Friday and reported on Bloomberg, Harrah’s, which had $24.1 billion of long-term debt at the end of September 2008, said it’s at risk of following suit.

“We cannot assure you that our business will generate sufficient cash flow from operations, or that we will be able to draw under our senior secured credit facilities or otherwise, in an amount sufficient to fund our liquidity needs,” Harrah’s said in the document. The casino company last month sought to borrow the remaining $740 million available in its $2 billion revolving bank line,” Bloomberg reported.

And the problems in Las Vegas of falling gambling revenues is not going away.

Casino proceeds on the Las Vegas strip fell 15% to $US510.4 million in January, according to a report from Nevada’s Gaming Control Board last week.

More importantly it was the 13th straight month of declines in winnings in January. Statewide, Nevada reported $US908.6 million in revenues, down 14.6% compared with January 2008.

The $US908.6 million win in January was the amount left in casino accounts after gamblers had bet $US12.3 billion during the month, including $US9.6 billion in poker machine bets and the rest on table games. The betting total is down about 3% over the year to January.

RelatedPosts

Revolving Door

Fri 17 Feb 2012 at 03:21

MPEL issues statement on Nasdaq-HK joint listing

Wed 30 Nov 2011 at 04:22

MPEL net revenue up 45% year on year in third quarter 2011

Fri 11 Nov 2011 at 02:27

MPEL net revenue up 67% year-on-year in 2Q 2011

Thu 25 Aug 2011 at 04:09
Load More

The announcement reveals the settlement of a developing argument between the sellers and Crown, which emerged into the daylight after an attempt by some parties to the Crown camp to withdraw the applications for approval by the Pennsylvania Gaming Control Board.

It later turned out that the mystery party was James Packer’s sister Gretel, and three trusts believed to be linked to her children and herself and holdings in Mr Packer’s private company.

Millennium Gaming last month threatened to sue Gretel Packer over her application, and said it would claim a “significant” amount, believed to be more than $US1 billion if she succeeded withdrawing her application for clearance and this ended up terminating the deal. The Americans had suggested in media comments that Ms Packer’s application and those from the trusts was an attempt by Crown and James Packer to wriggle out of the increasingly onerous deal.

The deal had been approved in Nevada. Pennsylvania was poised to announce its decision on whether Crown can be licenced and hadn’t ruled on Ms Packer’s application, or those from the trusts. It was claimed that she was uncomfortable with the level of scrutiny in the probity hearings, but she had been questioned by investigators for both Nevada and Pennsylvania before the application to withdraw was made.

The approval process starts all over again.

In the recent Crown interim profit statement, there were write offs and losses of $547 million in non-cash items. These were mainly the writing down of the value of gaming assets in the US (Las Vegas), the UK and Canada.

So the losses are now over $600 million.

But Crown says its debt will only be $A600 million once the various parts of the latest deal are sorted out.

Tags: MPEL
Share1Share
Newsdesk

Newsdesk

The IAG Newsdesk team comprises some of the most experienced journalists in the Asian gaming industry. Offering a broad range of expertise, their decades of combined know-how spans multiple countries across a variety of topics.

Current Issue

Editorial – An inconvenient truth

Editorial – An inconvenient truth

by Ben Blaschke
Fri 27 Jun 2025 at 15:21

It’s understandable that political observers, academics and members of the public in greenfield jurisdictions would express caution around the legalization...

Light & Wonder’s Siobhan Lane

Light & Wonder’s Siobhan Lane

by Ben Blaschke
Fri 27 Jun 2025 at 15:19

Siobhan Lane, Light & Wonder’s highly experienced CEO of Gaming, speaks to Inside Asian Gaming about the company’s ongoing transformation...

Honesty is the best policy

Honesty is the best policy

by Ben Blaschke
Fri 27 Jun 2025 at 14:13

The Thailand Entertainment Complex Roundtable brought industry stakeholders, politicians and supporters of the government’s Entertainment Complex Bill face to face...

Sri Lanka’s casino industry

Sri Lanka’s casino industry

by Shaun McCamley
Fri 27 Jun 2025 at 13:36

Industry veteran Shaun McCamley delves into the complex history of Sri Lanka’s casino industry at a time when the country...

Evolution Asia
Your browser does not support HTML5 video.
Aristocrat
GLI
Nustar
SABA
Mindslot
Solaire
Hann
Tecnet
NWR
Jumbo
568Win

Related Posts

Winds of change

Belle Corp’s share in City of Dreams Manila gaming revenue down 18% in 1H25

by Newsdesk
Sat 26 Jul 2025 at 08:39

Philippines real estate firm Belle Corp saw its share in gaming revenue from City of Dreams Manila fall by 18% year-on-year to Php772.3 million (US$13.5 million) in the first half of 2025, reflecting the challenges currently being faced by Manila’s...

DigiPlus to enter South Africa’s online sports betting market

DigiPlus to enter South Africa’s online sports betting market

by Newsdesk
Sat 26 Jul 2025 at 08:37

Philippines gaming technology firm DigiPlus Interactive Corp has announced plans to further expand internationally by entering the South African online sports betting market. The company said in a Friday statement that it would file license applications with the Western Cape...

Uncertain future for POGO industry suppliers as PAGCOR says operations in “status quo” for now

Maybank: Threat of total ban on Philippines online gaming is real, more clarity from President Marcos likely Monday

by Ben Blaschke
Fri 25 Jul 2025 at 12:34

Malaysian investment bank Maybank has warned that the threat of a total ban on the Philippines’ domestic online gaming, or eGames, sector is real given that political noise is similar to before recent bans on eSabong and POGOs. While Maybank...

MGTO says no apparent impact on visitor numbers from limitation on provision of free snacks in Macau casinos

Macau visitor arrivals rise 13.3% year-on-year to 2,891,003 in June

by Pierce Chan
Fri 25 Jul 2025 at 05:45

According to data from Macau’s Statistics and Census Service (DSEC), a total of 2,891,003 visitors arrived in Macau in June, representing a year-on-year increase of 13.3%. Mainland China remained the primary source of visitors to Macau in June, with 1,995,627...

Your browser does not support the video tag.


IAG

© 2005-2024
Inside Asian Gaming.
All rights reserved.

  • SUBSCRIBE FREE
  • NEWSFEED
  • MAG ARTICLES
  • VIDEO
  • OPINION
  • TAGS
  • REGIONAL
  • EVENTS
  • CONSULTING
  • CONTRIBUTORS
  • MAGAZINES
  • ABOUT
  • CONTACT
  • ADVERTISE

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In

Add New Playlist

No Result
View All Result
  • Subscribe
  • Newsfeed
  • Mag Articles
  • Video
  • Opinion
  • Tags
  • Regional
  • Events
  • Contributors
  • Magazines
  • Advertise
  • Contact
  • About
  • Home for G2E Asia

© 2005-2024
Inside Asian Gaming.
All rights reserved.

  • English