James Parker, the former chairman of Australia-based Crown Resorts, one of the biggest gaming operators down under, had a long term goal to enter the U.S. market that was to be realised with the completion of Alon Las Vegas project.
However, due to changes in the company’s long term strategies, primarily to refocus back on its domestic market, it was decided that international assignments had to be pulled, thereby abandoning the Alon Las Vegas project. This decision came as a huge disappointment for Packer, who once said that “you can’t be in the gaming industry and not have a special reverence for Las Vegas.” This is now the second time Parker has failed to make a play for Las Vegas. The first failure was thanks to the 2008 financial crisis which resulted in Packer losing nearly $2 billion on casino investments in the U.S.
Crown Resorts announced last December that it would no longer pursue the Alon casino project on the Las Vegas Strip, and is looking to sell the 34.6 acre piece of land, of which they own 18.4 acres, that sits directly across from Wynn Las Vegas and Encore, and just north of Fashion Show mall, for $400 million. The remaining 16.2 acres comes part of the package through a lease from its previous owners, the Elardi family.
Helping to list the property is realty firm, CBRE Group, who recently executed the Las Vegas Raiders’ land acquisition.
John Knott, the man who leads the global gaming group at CBRE, was very excited to partner up with Crown Resort and to list what he claims to be “the most exciting properties to become available in Las Vegas in a long time”.
Formerly occupied by the New Frontier resort, was purchased in 2007 for $1.2 billion by a group of investors from Israel, looking to develop the site into a luxury resort dubbed “Plaza Las Vegas”. The project failed to come to fruition after having knocked down the New Frontier resort, and instead, was sold to Crown Resorts for an estimated $280 million during the foreclosure process.
Though the asking price of $400 million, which is 33% more than the original purchase price, seems high at first, Knott believes that the asking price is in line with the current real estate prices in Las Vegas. Also, gaming analysts believes there is still room for another mega casino resort in Las Vegas and whoever ends up acquiring the site will have a high chance of success at developing and marketing another mega Casino resort in Las Vegas.
Vacating The Asia Market
As part of the whole shifting focus on domestic market, Crown Resorts also pulled out of the Asia market after having disposed all its stake in Asian casino developer Melco Resorts and Entertainment Ltd. The US$987 million proceeds from this deal is to be used to reduce company debt. This along with the eventual sale of the Las Vegas site will mark the complete disposal of all of the company’s international investments.
Welcoming Back Ex Chairman
Original chairman, James Packer, distanced himself from the company and resigned his post back in August 2015. There are now reports that Packer is looking to get back on the Crown board and take up the post as a director. Crown Resorts has confirmed that it has acquired all the necessary regulatory approvals to welcome back its old chairman back to the board.