Cannery sale to Crown on Nevada docket

Dec 9, 2008 5:04 PM
Gaming Insider by Phil Hevener |

What has controversial Macau casino magnate Stanley Ho got to do with Australia’s Crown Ltd. deciding to buy Las Vegas-based Cannery Resorts for $1.75 billion?

The answer: Nothing … probably, but that’s for Nevada’s Gaming Control Board and eventually, the Nevada Gaming Commission to decide.

Whatever the answer, the question will get lots of attention when Crown’s key officials appear before the Control Board in early January for the Board’s review of the Cannery deal. 

Current Cannery owners do not appear to be an issue. They are the plain vanilla, good guy owners of two Cannery casinos, the operators of the Rampart Casino and a Pennsylvania slot operation.

It’s the associations of the company that proposes to pay them a lot of money that have been getting heavy duty attention. Whatever the outcome of this hearing it may have ramifications elsewhere because Crown is also a nearly 20 percent investor in the Las Vegas Fontainebleau.

Look for a drama that may sound much like Pansy Ho’s appearance two years ago before the same two Nevada regulatory bodies. At that time Stanley’s daughter was proposing to partner with MGM in a Macau casino. The deal got Nevada’s blessing and the casino opened in December 2007.

There are unofficial indications at least one Board member may have been leaning toward a vote against Pansy Ho and MGM. It never happened that way. The Board gave the venture its 3-0 approval. The Commission voted 5-0 for approval.

Lawrence and Pansy are two of Stanley’s 17 children. Their mother was his second wife. Pansy is the managing director of her father’s Shun Tak Holdings. Lawrence is the chief executive at Melco, another of Stanley’s creations. The two of them have gotten a good deal of media attention whenever stories turn to the likely identity of the heir apparent to the businesses developed by the 87-year-old billionaire who controlled Macau casinos during the decades when no one quarreled with the notion that there were unsavory influences running rampant.

Crown is headed by James Packer the son of the late Kerry Packer who traveled life’s fast lane as a larger than life high-roller for a number of years. Kerry was a familiar figure in Las Vegas casinos where he went to the limit with his wagers, winning or losing millions during many of his Las Vegas visits. The younger Packer has been making a name for himself in the casino business as another kind of high-roller. He wants to own casinos and he will be questioned about the nature of his Macau partnership with Lawrence, who serves as co-chairman and CEO of Melco Crown Entertainment.

Melco began life some 80 years ago as the Macau Electric Light Company and Stanley Ho built it into a Hong Kong-based powerhouse.

Pansy’s relationship with her father remains an unresolved issue in New Jersey where officials seem to have misplaced the report that examines the suitability of New Jersey licensee MGM climbing into licensee into a Macau casino deal with Pansy Ho.

Stanley stepped away from Melco and installed Lawrence in Melco’s top post shortly after Packer bought a Macau sub-concession from Steve Wynn for $900 million in 2006. The first thing Packer did was turn the sub-concession (otherwise known as the right to operate a casino) over to the Crown-Melco joint venture.

Presto: the two sons of very accomplished and colorful entrepreneurs were in the Macau casino business.

Did Stanley sit back, proud father that he was, and brag to friends about all his son had accomplished with, well, just a wee bit of help from dear old Dad? Does Dad maybe lean on his son from time to time, suggesting it might be a sound idea if he did this or that?

Do Dad’s alleged connections with an allegedly long list of interesting characters and business deals over a long period of years have anything to do with the strategies being charted by the joint venture now known as Melco Crown Entertainment?

And just what might all of this, or any of it, have to do with Crown’s plans for the Cannery casinos that are now 58 percent owned by partners Bill Paulos and Bill Wortman, and the private equity firm known as Oaktree Capital Management?

It’s easy to imagine those current Cannery principals twitching inwardly even while they perhaps struggle to project images of dealmakers remaining cool and calm under pressure as gaming officials look for possible problems in this $1.75 billion payday. They do not appear to have a problem, but the mental images associated with getting a big check to the bank can cause a bit of tension.

As far as other aspects of this proposed transaction go, the Cannery owners have probably been congratulating themselves on being able to tumble into this deal during the moments, figuratively speaking, before the economy headed south in a big way.