Cosmopolitan not for James Packer
September 10, 2013 3:08 AM
by Phil Hevener
The struggling Cosmopolitan will probably not be sold to Australian billionaire James Packer anytime soon, at least not for anything approaching the three to four billion dollar figure mentioned in last week’s widely circulated Internet account.
The Gaming Control Board had not received any notification several days ago that such a deal is in the process of being signed, sealed and delivered.
“We’ve heard the same rumor,” Control Board Chairman A.G. Burnett told me, “but no one has filed anything with us.”
Not that anyone would be surprised to see Packer acquire a property somewhere along the Strip corridor. He’s come close in the past, but as veterans of the business know the deals that look good over lunch can crash and burn by the end of the day.
“I can see Packer wanting to have a Las Vegas place, but the Cosmo deal does not make any sense unless it gets put together with some creative thinking.” This from a gaming industry veteran who has watched Packer and his late father Kerry come and go in Las Vegas over the years.
What did he mean by creative?
“Maybe something that has Packer taking over the casino if the bank (Deutsche) is willing to keep the hotel. The Cosmo has a lot of the nice bells and whistles that would appeal to Packer’s Asian customers, people who like occasional trips to Las Vegas.”
Packer previously came close to buying the Frontier from Phil Ruffin seven or eight years ago, back before it went to the Israeli group that had plans to build a Las Vegas version of New York’s Plaza. On another occasion, Packer also had plans to acquire Cannery Resorts, but the “great recession” of the last few years brought all the deal making to a temporary halt.
My source speculates that if Packer is intent on making a Las Vegas acquisition he could make a “far more attractive deal” by going after Carl Icahn’s unfinished Fontainebleau or, perhaps, offering to take New York-New York off MGM’s hands.
Packer is one of the major casino owners in Macau and Australia and a Las Vegas resort would enhance efforts to attract wealthy players from Pacific Rim countries.
AC a Wynner? Is Steve Wynn serious about Atlantic City? I put the question to a veteran executive who is familiar with Wynn’s shifting feelings about the nature of business in Atlantic City.
“There’s no question Steve would be great for Atlantic City. When he commits himself to something he can’t help but spend at least a billion dollars but, frankly, I would be very surprised if he does anything there.”
Wynn is too busy elsewhere, he argues, to give Atlantic City and the possibilities associated with Internet gaming more than passing attention. Still, if there is a significant future benefit to being in Atlantic City the time to act is now rather than later when a lot of doors may have been closed because of agreements involving other companies.
Internet licenses are, of course, available only to Atlantic City casino owners or to those who are partnered with an owner. Several dozen companies have already filed preliminary paperwork with the Division of Gaming Enforcement.
Yes, the time to act is now.
Wynn is currently fighting for one of the Massachusetts casino licenses and it may be months before the outcome of his competition with Caesars World for a Boston area license is known.
But there are other factors. Among them: Wynn gets impatient with the politics that can be polluting factors in domestic gaming expansion efforts. He can be quick to move on when it becomes apparent political tides have turned against him or bureaucratic attitudes are giving him unbearable headaches.
He did that in Louisiana, Michigan and Pennsylvania.
I recall Wynn explaining his decision to return to Atlantic City in the mid-1990s with plans for a resort complex in the marina area. He credited his CFO at the time – that was Dan Lee – for convincing him that it made sense to build in New Jersey where the political and business climates were friendly than to continually deal with a variety of hostile forces and high tax rates in other jurisdictions.
Could be that he is replaying some of that thinking and likes the way it feels as New Jersey’s gaming industry evolves toward whatever its future will look like. He certainly could not find a more understanding group of lawmakers than those who have been quick to jump when Gov. Christie urges them in one direction of another on behalf of gaming’s interests.
“I think Steve would be very warmly received in New Jersey,” confided a source familiar with thinking at the top levels of business and government.”
Wynn’s previous public attitude to Internet gaming has been to sort of shrug and say that he was kind of lukewarm on the subject, but that the company would certainly have an “oar in the water” on behalf of shareholders.”
He has always been tuned to the nuances of changing business and political scenes.
Phil Hevener has been writing about the Nevada gaming business for more than 30 years. He can be reached at PhilHevener@GamingToday.com.