‘Ups, downs, challenges’: Packer praises Crown as US giant Blackstone takes reins -
June 24, 2022

By Colin Kruger

James Packer has acknowledged Crown’s “ups and downs and challenges” as he ended his 23-year relationship with the casino business with a $3.3 billion cheque from new owners Blackstone.

Packer praised what the company had achieved during his tumultuous ownership, especially with Crown’s Barangaroo casino in Sydney.

“There have been ups and downs and challenges, but today’s final sale to Blackstone is confirmation that we have built one of the country’s best tourism, entertainment and leisure companies. And I am extremely proud of that, thank you to everyone at Crown,” he said.

“It’s exciting to think of Crown’s next chapter and I am confident Blackstone will take good care of the company.”

Blackstone has yet to commit to an opening date for the all-important Barangaroo casino operation, but the US investment giant has flagged further investment in the business, which is still working with regulators to retain its casino licences in Australia.

Blackstone executive Chris Tynan said the group would now sit down with Crown executives to determine what investments were needed to transform Crown’s properties into world-class entertainment destinations as tourism rebounds from COVID.

“We’re very excited about the prospect of further investment into all three of the assets the Crown has in the stable,” Tynan said.

He flagged hospitality, and specifically new restaurant brands, as well as room refurbishments as part of its plan, with the Melbourne flagship operation the main target.

“Melbourne is the biggest opportunity that we see. It’s a phenomenal asset,” Tynan said.

“We definitely envisage being able to utilise our global reach to bring some brands and concepts and expertise in hospitality and in integrated gaming to really refurbish and optimise what’s here.”

Crown chief executive Steve McCann said the biggest opportunity for the new owners was to continue the remediation work needed to retain its casino licences in Sydney, Melbourne and Perth.

“We can’t lose sight of the fact that there’s still work to do over the next couple of years,” he said of the remediation work needed after Crown was found to be unfit to hold a licence in every jurisdiction in which it operates following damning inquiries into its conduct.

“That’s what’s going to be the single biggest driver of value,” he said.

A series of reports by The Age, The Sydney Morning Herald and 60 Minutes into Crown’s affairs in July 2019 triggered inquiries that led to Crown being deemed unsuitable to hold its casino licences and questioned Packer’s influence over Crown’s operations.

Crown received a provisional licence to operate the Barangaroo casino this week.

McCann and Tynan said the gaming operations were a crucial part of making the Barangaroo resort viable, but the loss of high rollers from China following the arrest of Crown employees in 2016 had not changed their confidence in Crown’s ability to attract these VIP gamblers over the longer term.

“The way that international VIP clients are going to need to interact with Crown in the future will be different from what it was historically, that’s one small aspect of a much broader plan that Blackstone and Crown are hopefully going to work on together in the future,” Tynan said.

McCann said the ban on junket operators helped reduce the costs of the VIP business and the turnover it needed to get a viable return from its gaming operations.

“We don’t need to get anywhere near the revenue or turnover levels that we used to have to drive similar business outcomes,” he said.

(The Sydney Morning Herald)