Packer Allegedly Meets with Adelson, Fuels Crown Sale Rumor

An encounter in the French Caribbean further fueled speculation Crown Resorts’ major shareholder James Packer is looking for the way out of the company, seeking to cash in on his 36% stake in the casino and hospitality operator.

Multi-Million Yachts Docked Beside Each Other

James Packer celebrated New Year’s Eve on board of his $200 million super boat IJE, but right next to his boat was docked another one, 92-meter long Queen Miri, owned by Las Vegas casino tycoon Sheldon Adelson, and that boat encounter sparked rumors a deal for the Australian’s stake in Crown Resorts might have been discussed.

Considering the mountain of troubles which fell on Crown Resorts after the New South Wales (NSW) inquiry into its casino license suitability, selling out his stake might be the only viable option for Packer, and Adelson is certainly someone who is always on the lookout to add value to his multi-billion empire.

Crown in Cold Regulatory Waters

Besides that Crown’s new AU$2.2 billion casino resort near Sydney was forced to start operations without its core, the VIP casino, as the Independent Liquor and Gaming Authority (ILGA) ordered a delay until February 1, when the final inquiry report is submitted, the inquiry findings attracted unwanted regulatory attention towards other Crown properties.

Despite that the Victoria Commission for Gambling and Liquor Regulation (VCGLR) stated its intent not to act solely on the inquiry recommendations and also wait until the final report submission, the regulatory body in Victoria decided to bring forward by 2 years Crown’s gaming license in the state, and the 7th review is now pending on the appointment of a dedicated sessional commissioner to lead it.

Earlier, also prompted by the NSW inquiry findings, the Australian Transaction Reports and Analysis Centre (AUSTRAC) initiated a probe into Crown Resorts’ dealings with high net worth individuals (HNWIs) and politically exposed persons (PEPs), to pile further misery on the casino operator. By that time the inquiry dealt in detail with Crown’s junket partners allegedly linked to Chinese organized crime, including Suncity.

China Moved to Cut Access to Its Residents

But the most serious blow to Crown Resorts’ business plan for its Crown Sydney casino resort came from Chinese authorities, as the country recently incriminated any organization efforts related to gambling trips outside of its borders, putting provisions through the law amendment of up to 10 years in prison for violations.

The move effectively eliminated junkets and cut Crown’s supply to Chinese high-rollers, leaving it to scramble for compensation from the local gambling market. The law amendment also impacted the other participant in the alleged encounter, Sheldon Adelson, due to his large exposure to the gambling market in Macau.

LVS Materially Impacted, Looking to Sell Strip Properties

The coronavirus outbreak implications on the casino industry worldwide did not pass by the Forbes 2020 Billionaire Top 30 member and the casino giant owned by the mogul posted disappointing Q3 earnings report, yet chairman and CEO Adelson and his management team kept the upbeat tone regarding the industry recovery timeline.

Optimism is one thing, realism another, and soon there were speculations that Sheldon Adelson was looking to offload all of Las Vegas Sands (LVS) Strip properties, seeking around $6 billion from a potential buyer. Later on, some gaming analysts suggested the proposition would not go short of interest, throwing Caesars Entertainment and Tilman Fertitta’s Golden Nugget as the usual suspects.

Sheldon Adelson has repeatedly stated in the past that his company was always looking to buy value, and if a deal with Packer was discussed, it remains to be seen whether his and Packer’s business evaluations have found common ground.

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