Crown Casino Dismisses Las Vegas Sands Sale Rumors

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Crown Casinos’ share price rose on the back of rumours that the casino operator’s majority shareholder James Packer was engaged in talks with Las Vegas Sands’ Sheldon Adelson.

Calvin Ayre reports that Crown’s shares rose nearly three per cent on Monday to close at A$9.90, a peak the operator hasn’t hit since mid-2020 and when regulatory problems truly began in earnest.

On January 2, it was reported that Packer’s $200 million yacht, in which he spent the bulk of the year hiding from COVID-19 on the high seas, spent the final days of 2020 parked alongside another superyacht owned by none other than Sheldon Adelson.

The paper noted that there’d been “tenders between both vessels going back and forth,” sparking speculation that Adelson was discussing the sale of Packer’s nearly 37 per cent stake in Crown.

However, a Packer flack dismissed talk that the two casino titans had any contact during their boats’ prolonged proximity.

The idea of such discussions isn’t so daft, given it was only last May that Sands was reportedly kicking Crown’s tyres, and that Sands recently confirmed it’s considering unloading its US properties in Las Vegas, where Packer unsuccessfully tried to establish a Crown presence.

As such, there may not necessarily be any fire here, but things are getting smoky.

Packer’s video testimony at the New South Wales inquiry into a litany of compliance failures at Crown Melbourne led to further speculation that Packer will need to reduce his holdings to preserve Crown’s NSW future.

And that NSW future currently looks bleak.

The flashy new Crown Sydney opened last December but NSW regulators declined to approve any gambling operations at the property pending the inquiry’s final report, due in February.

With Australia and China currently feuding, Crown Sydney’s capacity to attract Chinese VIP gamblers appears extremely limited for the foreseeable future.

Crown’s future in Victoria is almost as uncertain after state regulators announced they were advancing a scheduled licence review for Crown Melbourne by two years.

The property is among the state’s biggest employers, so while the state isn’t likely to shut the casino down, it could put pressure on Crown to cede ownership and management to some fresh faces.

Crown Sydney opens with little fanfare

Restaurants, bars and a six-star hotel at Crown Sydney opened in late December, but without the pomp or fanfare imagined when the 275 metre tower was first proposed eight years ago.

The Brisbane Times reported in December that the high-roller gaming rooms that underpinned the project’s viability remain firmly shut, with serious questions about if and when they will open.

The NSW gambling regulator blocked the $6.5 billion ASX-listed giant from commencing gaming operations in December after its failures to prevent money laundering at its Melbourne and Perth casinos and other probity issues were revealed during a public inquiry into the group.

Crown’s casino licence now hinges on former Supreme Court judge Patricia Bergin’s findings from the year-long investigation into the group, which was triggered by a series of reports, with the recommendations due by February 1.

Crown could lose the licence completely, or have strict conditions imposed.

Changes to Crown’s management and board could be required and Packer may have to sell down some of his 36 per cent holding in Crown to lessen what counsel assisting the inquiry called his “deleterious” influence.

But even if Crown keeps its licence, there are questions about whether Crown Sydney is viable in its current form or if the city’s tallest building could become a white elephant.

The risk, according to gaming industry experts, is that even after Australia’s international borders reopen the Chinese high rollers that were a vital part of the Barangaroo business plan are unlikely to return.

“The international VIP market is pretty much gone,” says David Green, an industry consultant who has worked with casinos and gambling regulators.

“These people won’t put their heads up again while the mainland Chinese authorities are as belligerent and antagonistic towards gaming as they are now.”

William Brown

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