News broke earlier today of the sale of Crown London (the former Aspinalls casino) by Crown Resorts to Wynn Resorts. The machinations and moves in the global integrated resort and gaming industry never seem to end and 2025 is off to a flying start with this one!
Transactions such as these are usually pretty much a zero-sum game. We often look back some years later and with the benefit of hindsight easily determine who was the winner and who was the loser from the transaction.
But I think this might be one of those rare occasions where there genuinely are two winners. The illusive “win-win transaction”.
Why? Well, let’s take a look at the current situation of these two companies.
First, Crown. I am writing this in Melbourne, and I had the pleasure of visiting Crown Melbourne – the home base of Crown Resorts – just two days ago. This is a property very much in need of some TLC (if you’re under 35, google it). While Crown has recently launched a new restaurant, Marmont, which it claims offers a “California-inspired vibe”, the rest of the property is pretty much unchanged from the Crown I used to frequent almost daily back in the ancient times – the 1990s and early 2000s. Having now won its license back, the focus at Crown becomes actually making some profit for newish owner Blackstone.
That’s going to require two things: investment and focus. The former is relatively easy. Set aside some money and use it to revamp Crown Melbourne, and potentially Crown Perth. New restaurants, new spaces, new vibe (California-inspired and otherwise). Bring things into the 2020s, and ready for the 2030s. There’s no need to do so with Crown Sydney, given the relative modernity of that property. The latter item – focus – is a bit more ethereal. Time to ditch anything extraneous and concentrate the Crown brains trust on the core assets of the business. Back to basics. Focus on the fundamentals.
And to Crown’s credit, this they have been doing. For example, they’ve sold their former stake in restaurant chain Nobu, which could have been argued to have been a bit of a flight of fancy by former owner James Packer back in 2015 – far headier days. Similarly, Crown’s acquisition of Aspinalls (as it was back then) in 2011 was really a bit of a “nice to have”, rather than a “have to have”.
Crown has suffered endless travails over the past five years or so: the Finkelstein Royal Commission, Packer personal problems, loss of licence, fines, settlements with regulators, its former relationship with Asian junkets, AML woes, a revolving boardroom door, multiple job slashes, media and public hatred, endless operational restrictions, the list goes on and on.
After all this, it’s clear that Crown isn’t going to have much of an international business for the foreseeable future, if ever. Sure, it will get the odd international player visiting Melbourne or Sydney for other reasons, but it certainly won’t be a gaming destination of choice for the globe-trotting VIP player.
So, Crown doesn’t really need Aspinalls, er, Crown London (old habits die hard). The advantage of building a player list in the UK isn’t such an advantage any more. And does Crown need the distraction of a small but exclusive high-end property in a time zone 9, 10 or 11 hours behind Melbourne (depending on the time of year)? No.
Now, let’s consider this from Wynn’s point of view. This deal also makes a lot of sense. As we all know, Wynn Resorts has been granted a license for its upcoming integrated resort on Al Marjan island at Ras Al-Khaimah (RAK) in the UAE. This is the first-ever IR in the Middle East and super exciting news for the global IR industry. More IRs in the Middle East are already being touted – particularly in Abu Dhabi and Dubai.
Historically, where have wealthy casino-going Arabs traditionally gone to gamble? That’s right, London! Think of the player list that Wynn Resorts could inherit with the purchase of a small but exclusive high-end property, such as, er, I don’t know – Aspinalls! And it’s not just about the player list, but Wynn staff can start to learn cultural sensitivities, player preferences, and much more, in preparation for the “main game” in RAK, when it opens two or three years from now. There’s nothing like hitting the ground running when launching a new business.
On top of this, the acquisition further “internationalizes” Wynn Resorts. Right now, Wynn has properties in Las Vegas and Boston, both in the US, and the Macau SAR. Picking up a property in a third country, and especially a second liberal western democracy like the UK, adds further gravitas to the company, enhancing its chops for other bids around the world. Did someone say Thailand? Even another tilt at Japan one day, far in the future?
My congratulations to Crown Resorts CEO David Tsai and Wynn Resorts CEO Craig Billings. Assuming the sale price was fair and reasonable, I suspect you both won with this one.
